Case Name: Alfred Shahgholian v. Yama Marifat., et al.

Case No.: 17CV320512

Motion for an Order Compelling Further Responses to Special Interrogatories and Imposing Monetary Sanction

Factual and Procedural Background

In or about May 2017, defendants Yama Marifat and Marifat Family, LLC (collectively, “Marifat”) entered into a written agreement (“Agreement”) with Wayan Asefi (“Asefi”) for the purchase, remodel, and re-sale of real property located at 1940 Hicks Avenue in San Jose (“Subject Property”). (Second Amended Complaint (“SAC”), ¶¶5 and 16.) The Agreement was a partnership enterprise and contained two main components. (SAC, ¶17.) The first component was a service agreement wherein Asefi was to perform, or cause to be performed, certain work upon the Subject Property to improve its condition for re-sale. (SAC, ¶18.) The second component was a partnership and/or joint venture between Asefi and Marifat wherein the two were to share in the profits, if any, of the re-sale of the Subject Property it if were to sell above a certain price. (SAC, ¶19.) Specifically, Asefi was to have a 30% share in all profits should the Subject Property be re-sold for an amount in excess of $2,250,000. (SAC, ¶19.)

Following completion of the work contemplated in the Agreement, the Subject Property sold for a price of $2,600,000 on or about September 1, 2017. (SAC, ¶21.)

On September 12, 2017, by a second written agreement, Asefi made a complete assignment of his rights under the Agreement to plaintiff Alfred Shahgholian (“Shahgholian”). (SAC, ¶¶7 and 22.)

On October 31, 2017, Asefi received a check in the amount of $21,000 representing only a portion of the 30% share of the sale price in excess of $2,250,000 to which Asefi was entitled to receive at the time of the assignment. (SAC, ¶23.)

Marifat breached the Agreement by failing to make any of the payments required under either the service or joint venture component of the Agreement. (SAC, ¶28.)

On December 14, 2017, plaintiff Shahgholian filed a complaint against Yama Marifat for breach of contract.

On June 26, 2018, plaintiff Shahgholian filed a first amended complaint adding defendant Marifat Family, LLC, but continuing to assert a single cause of action for breach of contract.

On June 4, 2019, plaintiff Shahgholian filed the operative SAC against defendants Marifat now asserting causes of action for:

(1) Breach of Contract
(2) Accounting
(3) Unjust Enrichment

On July 1, 2019, defendant Yama Marifat, individually, filed an answer to the SAC. [The court record reflects the rejection of a filing by defendant Marifat Family, LLC on or about July 12, 2019 on the basis that defendant Marifat Family, LLC has not paid first paper filing fees of $435. The court presumes defendant Marifat Family, LLC attempted to file an answer.]

Discovery Dispute

On May 24, 2019, plaintiff Shahgholian served special interrogatories (“SI”), set two, on defendant Marifat Family, LLC.

On June 28, 2019, defendant Marifat Family, LLC served Defendant’s Response to Plaintiff’s Special Interrogatories, Set Two, on plaintiff Shahgholian.

On July 24, 2019, plaintiff Shahgholian’s counsel sent a meet and confer letter to defendant Marifat Family, LLC’s counsel seeking supplemental responses to SI, set two, numbers 63 – 65.

On July 29, 2019, defendants’ counsel responded stating defendant Marifat Family, LLC is “unable to supplement the responses already provided.”

As of August 30, 2019, no supplemental responses have been provided.

On August 30, 2019, plaintiff Shahgholian filed the motion now before the court, a motion to compel defendant Marifat Family, LLC’s further response to plaintiff Shahgholian’s SI, set two, numbers 63 – 65.

I. Plaintiff Shahgholian’s motion to compel defendant Marifat Family, LLC’s further response to SI, set two, numbers 63 – 65 is GRANTED.

A. Legal standard.

“On receipt of a response to interrogatories, the propounding party may move for an order compelling a further response if the propounding party deems that any of the following apply: (1) An answer to a particular interrogatory is evasive or incomplete. (2) An exercise of the option to produce documents under Section 2030.230 is unwarranted or the required specification of those documents is inadequate. (3) An objection to an interrogatory is without merit or too general.” (Code Civ. Proc., §2030.300, subd. (a).)

The objecting party bears the burden of justifying any objections raised. (Kirkland v. Superior Court (2002) 95 Cal.App.4th 92, 98.) A response to an interrogatory must be “as complete and straightforward as the information reasonably available to the responding party permits.” (Code Civ. Proc., § 2030.200, subd. (a).)

B. Merits.

SI, number 63, asks, “State the total amount of PROFITS YOU earned on YOUR purchase and re-sale of the PROPERTY. (The term “PROFITS” or “PROFIT SHARE” is used in this interrogatory and all those that follow shall mean the financial gain, more specifically, the amount earned and the amount spent in buying the PROPERTY.)

SI, number 64, asks, “State the amount of PROFITS YOU earned on YOUR purchase and re-sale of the PROPERTY prior to any payment of PROFIT SHARE to PRO Builders Construction.”

Defendant Marifat Family, LLC responded to SI, numbers 63 and 64, with the same response: “Objection. This request as phrased is vague and ambiguous as the defined term “PROFIT” and “PROFIT SHARE” is contradictory as it regards both an amount earned and amount spent. Subject to the foregoing: The Responding Party is unaware of the total amount spent to renovate the Property. As such, the Responding Party has no knowledge of the total profit earned on the purchase and re-sale of the Property.”

SI, number 65, asks, “State the amount of PROFIT SHARE YOU paid to PRO Builders Construction.”

Defendant Marifat Family, LLC responded to SI, number 65, with the following response: “Objection. The information sought in this discovery request is equally available to the propounding party. Further, this request as phrased is vague and ambiguous as the defined term “PROFIT” and “PROFIT SHARE” is contradictory as it regards both an amount earned and amount spent. Subject to the foregoing: The Responding Party paid twenty percent (20%) of the net profits over $2,250,000 to Pro Builders Construction.”

In moving to compel further responses, plaintiff Shahgholian contends defendant Marifat Family, LLC’s responses to the above SI are evasive or incomplete. In opposition, defendant Marifat Family, LLC contends it has provided all relevant and available information and that plaintiff has all the information necessary to determine whether full payment in accordance with the Agreement has been made. In making these arguments, defendant asserts a number of factual statements including the following: “Although the contract set a final walk through date of June 15, 2016, ongoing issues occurred at the Property which pushed back completion time and increased costs. …Defendants issued to ProBuilders a check for $15,000 on October 6, 2017, with a memo stating ‘1940 Hicks Contract Payment.’ Not only was this check cashed by ProBuilder but Asefi followed up receipt of the check by emailing Yama Marifat on October 25, 2017 stating ‘Per my instruction, please credit the amount required to close linden from my proceeds out of Hicks’ (emphasis added). … As the 20% profit was to be applied to another account owed to the Defendants by Asefi, all that remained due under the contract was for the remaining contract debt to be paid. As such, on November 1, 2017, the Defendants issued a check to Pro Builders Construction in the amount of $21,000 with a memo stating: ‘Final payment 1940 Hicks Ave. Contract.’”

These factual assertions reflect knowledge of costs, dollar amounts paid, and an understanding of calculations in determining the dollar amounts paid. Based on these factual assertions, the court finds defendant Marifat Family, LLC’s responses to SI, set two, numbers 63 – 65 to be evasive or incomplete. Defendant Marifat Family, LLC cannot assert that it has “no knowledge” in light of these factual assertions. The court also finds it evasive for defendant Marifat Family, LLC to state, in its formal response, that it “paid twenty percent (20%) of the net profits over $2,250,000 to Pro Builders Construction,” when defendant Marifat Family, LLC identifies actual dollar amounts and an undefined credit in opposing this motion.

Defendant Marifat Family, LLC’s assertion that plaintiff Shahgholian already has the necessary documents from which to derive a response to the SI at issue is not a proper basis for refusing to provide a substantive response. “A party may use multiple methods to obtain discovery and the fact that information was disclosed under one method is not, by itself, a proper basis to refuse to provide discovery under another method.” (Irvington Moore, Inc. v. Superior Court (1993) 14 Cal.App.4th 733, 738 – 739.)

Accordingly, plaintiff Shahgholian’s motion to compel defendant Marifat Family, LLC’s further response to SI, set two, numbers 63 – 65 is GRANTED. Defendant Marifat Family, LLC shall provide a further verified response, in compliance with the Code of Civil Procedure, to plaintiff Shahgholian’s SI, set two, numbers 63 – 65, within 20 calendar days from notice of entry of this order.

C. Sanctions.

“The court shall impose a monetary sanction … against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel a further response to interrogatories, 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., §2030.300, subd. (d).)

Defendant Marifat Family, LLC objects to the imposition of sanctions in this case by asserting that it acted with substantial justification and by asserting that plaintiff Shahgholian did not make reasonable efforts to meet and confer in good faith, sending only a single meet and confer letter. A reasonable and good faith attempt at informal resolution requires that the parties present the merits of their respective positions with candor, specificity, and support. (Townsend v. Super. Ct. (1998) 61 Cal.App.4th 1431, 1435, 1439.) The level of effort at informal resolution which satisfies the “reasonable and good faith attempt” standard depends upon the circumstances of the case. (Obregon v. Super. Ct. (1998) 67 Cal.App.4th 424, 431.)

Although the court would prefer the parties to engage in more effort at informal resolution, the court finds a minimal effort was made. Defendant Marifat Family, LLC did not act with substantial justification in refusing to supplement its responses to the SI at issue and, consequently, sanctions are warranted. However, the court finds the amount requested unreasonable. Plaintiff Shahgholian’s request for sanction is GRANTED, in part. Defendant Marifat Family, LLC shall pay $560 to plaintiff Shahgholian within 20 calendar days of notice of entry of this order.

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