Gerald Bittner v. Daniel E. Nelson

Gerald Bittner v. Daniel E. Nelson, et al.		CASE NO. 111CV200099
DATE: 22 August 2014	TIME: 9:00	LINE NUMBER: 4

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.

1987) 201 Cal.App.3d 467, 472 n.1der of an individual’ any privacy objections should be set aside. pposed to policies held by thOn 22 August 2014, the motion of Plaintiff Gerald Bittner to compel further responses to interrogatories and requests for production of documents, to deem matters admitted and for monetary sanctions was argued and submitted. Plaintiff also requests the Court take judicial notice of five documents. Defendants Daniel E. Nelson, Global Cinema Distribution, LLC, California Film Investments, LLC, Golden Leaf Pictures, and Lava Entertainment Holdings, LLC did not file formal opposition to the motion.[1] Defendants’ former counsel, Lucia MacDonald, filed a late opposition to the monetary sanctions as to her.

I. Background.

This matter arises out of alleged fraud and breach of contract claims. Plaintiff Gerald Bittner alleges that Defendant Dan Nelson and Joel Nelson, through several corporate identities, induced Mr. Bittner to enter into a contract with them, stating that if Mr. Bittner invested with the Nelsons, they would recoup his investment upon release of a feature film. Mr. Bittner alleges he never received any money back.

Plaintiff served each Defendant with discovery on 29 April 2014. Responses were due 29 May 2014. However, Plaintiff agreed to an extension until noon of 13 June 2014, conditioned that Defendants’ responses were due on that date via e-mail and mail and that these responses were verified by e-mail and mail. This extension was confirmed by Defendant’s counsel.

At 8:38 p.m. on 13 June 2014, Defendants, except for Defendant California Film Investments, served unverified responses, including objections, on Plaintiff. After Plaintiff addressed its perceived issues with Defendant’s responses, Plaintiff asked for verified code-compliant responses by 23 June 2014.

On 20 June 2014, Defendants emailed Plaintiff a document captioned “Verification of Dan Nelson” purporting to verify all responses on behalf of all parties. However, Dan Nelson’s verification did not speak to his authority to bind the business entity Defendants and was therefore defective, except as to him. On 25 June 2014, Defendants served another verification where Dan Nelson identified himself as a former manager of three of the business entity Defendants.

After further unfruitful meet and confer attempts, Plaintiff filed the instant motions on 25 July 2014. Lucia MacDonald, former counsel for Defendants, filed an opposition only for sanctions as to her on 13 August 2014. Plaintiffs filed a reply on 15 August 2014.

II. Lucia MacDonald’s Opposition.

Opposition to a motion must be filed at least nine court days prior to the hearing. Code Civ. Proc. §1005(b). A court may refuse to consider a late-filed opposition, in its own discretion. Cal. Rules of Court, rule 3.1300(d).

The hearing on this matter is 22 August 2014. Opposition to this motion was to be filed by 11 August 2014. Ms. MacDonald’s Opposition was filed on 13 August 2014. The opposition is late.

Ms. MacDonald’s Opposition addresses solely the sanctions Plaintiff seeks against her. Because sanctions are intended to be remedial, rather than punitive, see e.g., Kahn v. Kahn (1977) Cal.App.3d 372, 381, it is in the Court’s interest to ensure that the remedy is appropriate, but that individuals who had no part in creating the discovery problem not be punished. The Court can only do this analysis with Ms. MacDonald’s brief. For this reason, the Court will treat Ms. MacDonald’s opposition as though it were timely filed and consider any arguments made in that document.

III. Plaintiff’s Request For Judicial Notice.

A party may compel the Court to take judicial notice of a matter, provided it gives sufficient notice to the other party to allow it to challenge the request, and provides the Court enough information to enable it to take judicial notice of the matter. Cal. Evid. Code §453. Matters which may be judicially noticed include facts or propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy. Cal. Evid. Code §452(h). Records of this court, or other courts are also subject to permissive notice. Cal. Evid. Code §452(d).

Plaintiff requests that the Court take judicial notice of ten documents and facts.

Plaintiff seeks the Court take judicial notice of several pleadings and other documents within the Court’s file for this case. These documents include the Notice of Demurrer that Defendants filed to Plaintiff’s Second Amended Complaint, Plaintiff’s Third Amended complaint, Defendants’ Answer to the Third Amended Complaint, Defendants’ Cross-Complaint against Cross-Defendant Gerald Bittner, and a Request for Dismissal of several Defendants’ Cross-Complaints.

The Court typically takes note of its own file for the case matters it hears. It believes that these documents are relevant and necessary to a proper understanding of the case before it. For that reason, the Court will take judicial notice of these documents.

Plaintiff requests the Court take judicial notice of the fact that no Defendant has filed a motion for protective order or relief from waiver of objections. For the same reason the Court takes note of its file, it also takes note of absences in its file. The Court will take judicial notice of the fact that no Defendant has filed a motion for a protective order as to its discovery responses, nor filed a motion seeking relief from waiver of objections.

Plaintiff requests the Court take judicial notice of two Nevada statutes and one Nevada Supreme Court case. One of the Defendants is, or was, a Nevada business entity. The two cited statutes and the Nevada Supreme Court case relate to how Nevada treats its revoked and dissolved business entities. Because of how California law treats foreign terminated corporations, these statutes and case law are relevant and important for the Court to note. The Court will take judicial notice of these statutes and case law.

The Court also takes judicial notice of the fact that Defendants have not sought a protective order or relief from waiver of its objections as it regards its discovery obligations. The Court also takes judicial notice of Nevada Revised Statutes Sections 86.361 and 86.155 and notice of case AA Primo Builders, LLC v. Washington (Nev. 2010) 245 P.3d 1190.

III. Analysis.

A. Meet and Confer

Each of the motions to compel further responses imposes a requirement on the moving party to meet and confer prior to bringing the motion. Code of Civ. Proc. §§ 2030.300(b), 2031.310(b)(2). A meet and confer declaration must show a reasonable and good faith attempt at an informal resolution as to each issue addressed in the motion. Code Civ. Proc. § 2016.040. The standards to determine whether a declaration demonstrates a reasonable and good faith attempt at informal resolution include the size and complexity of the litigation, the history of the litigation, the nature of the dispute, and the nature of the discovery requested. See Stewart v. Colonial W. Agency, Inc. (2d Dist. 2001) 87 Cal.App.4th 1006, 1016.

The Court has reviewed the correspondence between parties regarding these matters. The tone between the parties was professional and appeared to attempt to come to a resolution without court intervention. The Court finds that the attempts at informal resolution were reasonable and in good faith as to all of the matters below. All meet and confer obligations were met.

B. Motion to Compel Further Responses to Interrogatories

Parties have the right to propound interrogatories upon opposing parties seeking responses answered under oath. Code Civ. Proc. § 2030.010(a). These interrogatories can seek information regarding the facts relating to the cause of action, contentions of the opposing party, or to facts, witnesses, or writings upon which the contention is based. Code Civ. Proc. § 2030.010(b). A proper response includes a statement, under oath, that contains the answer to the information sought. Code Civ. Proc. § 2030.210(a)(1). The party, if appropriate, may exercise a right to respond with the production of a document. Code Civ. Proc. § 2030.210(a)(2). Alternatively, the party may provide an objection to the interrogatory. Code Civ. Proc. § 2030.210(a)(3). An interrogatory response must contain at least one of these, but may contain a combination of two or all three. Code Civ. Proc. § 2030.210(a). Responses shall be as complete and straightforward as possible. Code Civ. Proc. § 2030.220(a). If the respondent does not have personal knowledge that would sufficiently answer the interrogatory, the response must indicate such. Code Civ. Proc. § 2030.220(c). Barring an extension, a party has 30 days to respond to interrogatories. Code Civ. Proc. §§2030.260(a), 2030.270(a). An untimely response waives all objections. Code Civ. Proc. §2030.290(a).

A party may make a motion to compel further responses to interrogatories if it believes the other party provided evasive or incomplete answers to particular interrogatories. Code Civ. Proc. § 2030.300(a); Rules of Court, rules 3.1110(a), 3.1112(d)(3). This motion must include a memorandum of points and authorities. Cal Rules of Court, rules 3.1112(a)(3), 3.1113(a). The motion must also be accompanied by a declaration stating certain facts that demonstrate good cause for production. Code Civ. Proc. §2031.310(b)(1). Additionally, a Separate Statement including the text of the discovery sought to be compelled, the responses given, a statement of the legal reasons for further responses and an explanation of other definitions is required. Rule of Court 3.1345(a),(c). The motion must be filed within 45 days of a verified response or a supplemental verified response. Code Civ. Proc. §2030.300(c).

A valid motion to compel further responses requires showing specific facts demonstrating good cause justifying the discovery sought. Cal. Code Civ. Proc. § 2030.300(b). Good cause is demonstrated by the moving party showing 1) relevance to the subject matter, for example how the information in the documents tends to prove or disprove an issue in the case; and 2) specific facts justifying discovery, for example, why the information is necessary for trial preparation or would prevent surprise at trial. Brown & Weil, Civil Procedure Before Trial, § 8:1495.6 [citing Kirkland v. Superior Ct. (2002) 95 Cal.App.4th 92, 98]. Additional facts demonstrating there is no alternative source for the information is important, but not essential in every case to demonstrate good cause. Brown & Weil at § 8:1495.6.

1. Form Interrogatories

Plaintiff served each Defendant with Set One Form Interrogatories on 29 April 2014. Plaintiff also served a set of Special Interrogatories on 29 April 2014. These responses were due 29 May 2014. However, Plaintiff agreed to an extension until noon of 13 June 2014, conditioned that Defendants’ responses were due on that date via e-mail and mail and that these responses were verified by e-mail and mail. This extension was confirmed by Defendant’s counsel.

Defendants’ most recent supplemental response consisted of the updated verifications sent on 25 June. The instant motion was filed 25 July, well within the 45 day deadline. The motion is timely.

Defendants’ responses to the Form Interrogatories were late by eight hours and thirty-eight minutes. Objections to the interrogatories, including privilege were waived.

2. Global Cinema Distribution Nevada’s responses.[2]

Global Cinema Distribution Nevada (referring to the Nevada form of Global Cinema Distribution, LLC) makes several general objections in its response. While they are all waived, the Court wants to address one in particular: Global Cinema Distribution Nevada asserts that it does not exist.

It claims that it does not exist because its status is revoked under Nevada law and asserts California Corporations Code Section 2010, the California corporate dissolution and survival statute, does not apply to Nevada corporations under Greb v. Diamond Intern. Corp. (2013) 56 Cal.4th 243, 272. While Greb does indeed state this, it also states that the laws of the jurisdiction that formed the business entity do apply. Id.at 266-67.

Nevada’s corporations law treats revoked entities similarly to those entities who dissolve. See AA Primo Builders, LLC v. Washington (Nev. 2010) 245 P.3d 1190, 1195-96. Nevada Revised Statute 86.505 specifies that actions that remedies and causes of action may be prosecuted within 2 years of dissolution if the plaintiff should have learned of the facts leading to those causes of action prior to dissolution, or 3 years of dissolution for any other cause of action.

Global Cinema Distribution Nevada never identified its non-existence as a defense in its Answer, and the fact that it counterclaimed against Plaintiff further points to its existence.

Additionally, while Dan Nelson may not have authority to bind Global Cinema Distribution Nevada, his statement signed under penalty of perjury that he was a manager at least as late as 2010, provides evidence to Global Cinema Distribution Nevada’s existence at least to that time. This means that Global Cinema Distribution Nevada existed as an entity who can sue or be sued at least until 2012. The instant suit was brought in 2011. Global Cinema Distribution Nevada’s objection is not only non-meritorious, it is potentially deceptive.

Plaintiff’s motion to compel further responses to Plaintiff’s Form Interrogatories, Set One from Global Cinema Distribution Nevada is GRANTED. Global Cinema Distribution Nevada shall serve a code-compliant response verified by a current officer or other individual who has the authority to bind the company without objection within 20 days of the date of this order.

3. Dan Nelson’s Responses.

The Court has reviewed Plaintiff’s Separate Statement and determines that Dan Nelson’s objections are waived and that his responses are evasive or deceptive.

An example of Mr. Nelson’s questionable responses is demonstrated by his response to Form Interrogatory 2.5. This interrogatory asks for Mr. Nelson’s residential addresses for the past 5 years. Mr. Nelson stated that he resided at his present address for the past 5 years. However, Plaintiff has provided documentation that Mr. Nelson’s purported address is a mailbox at a Santa Clara Postal Annex, a location that offers mailboxes for rent. Mr. Nelson’s answer is clearly deceptive as it is highly unlikely that he lives in a mailbox, no matter how large it is. Mr. Nelson’s other responses are similarly questionable.

Plaintiff’s motion to compel further responses to Plaintiff’s Form Interrogatories, Set One from Defendant Dan Nelson is GRANTED. Dan Nelson shall serve a verified, code-compliant and non-evasive response without objection within 20 days of the date of this order.

4. Golden Leaf Pictures’ Responses.

Golden Leaf Pictures’ (“Golden Leaf’s”) responses were verified, under oath, by Dan Nelson as manager on 25 June 2014. However, the interrogatories that Plaintiff challenges as to Golden Leaf Pictures ask, essentially, what type of business Golden Leaf is. Golden Leaf indicates that it is not a limited liability company, corporation, partnership or joint venture. However, it also indicates that it previously did business under the name Lava Entertainment Holdings, LLC, which indicates that Golden Leaf is, or was, either a limited liability company or masquerading as one. Further, the fact that Dan Nelson identifies himself as a current manager of Golden Leaf, but a former manager of Lava Entertainment Holdings, LLC, in spite of the fact that Golden Leaf previously did business as Lava Entertainment Holdings, LLC, means that these responses are disingenuous. The responses also indicate that answers are made subject to objections that have been waived. Golden Leaf’s responses are evasive and incomplete.

Plaintiff’s motion to compel further responses to Plaintiff’s Form Interrogatories, Set One, as to Golden Leaf Pictures is GRANTED. Golden Leaf Pictures shall serve verified, code-compliant, non-evasive responses without objection on Plaintiff within 20 days of the date of this order.

4. Lava Entertainment Holdings, LLC responses

As a former manager, Dan Nelson’s verification is ineffective. Because the responses were served late, all objections are waived. As appears the case with the other responses, Lava Entertainment Holdings, LLC’s responses appear evasive or deceptive.

Plaintiff’s motion to compel further responses to Plaintiff’s Form Interrogatories, Set One as to Lava Entertainment Holdings, LLC is GRANTED. Lava Entertainment Holdings, LLC shall service code-compliant, non-evasive responses without objection verified by a current officer or other individual with the ability to bind it within 20 days of the date of this order.

5. California Film Investments, LLC’S Responses.

As a former manager, Dan Nelson’s verification is ineffective. Because the responses were served late, all objections are waived. As appears the case with the other responses, California Film Investments, LLC’s responses appear evasive or deceptive.

Plaintiff’s motion to compel further responses to Plaintiff’s Form Interrogatories, Set One as to California Film Investments, LLC is GRANTED. California Film Investments, LLC shall service code-compliant, non-evasive responses without objection verified by a current officer or other individual with the ability to bind it within 20 days of the date of this order.

B. Special Interrogatories.

The Court has reviewed Mr. Nelson’s responses to the Special Interrogatories, Set One. Because responses were not received in a timely manner all objections are waived. As a result, at the very least, all responses that indicate that they are subject to objections, including privilege, are incomplete.

1. Special Interrogatory No. 13

Special Interrogatory 13 seeks all facts supporting Mr. Nelson’s cross-complaint allegation that Plaintiff Bittner received a personal guarantee from Mr. Nelson through the threat of physical violence and harassment. Mr. Nelson points to “representations” as one facet of those facts. “Representation” by itself is insufficient because it is unclear what the representation is. In this respect, Mr. Nelson needs to provide a further response.

2. Special Interrogatory No. 22

Special Interrogatory 22 seeks all facts supporting Mr. Nelson’s cross-complaint allegation that around February 2010, Plaintiff Bittner inquired about investment opportunities in connection with a particular feature film. Mr. Nelson references representations and discussions but does not go into detail about what those representations or discussions actually were. Mr. Nelson must provide a further response.

3. Special Interrogatory No. 67

Special Interrogatory 67 seeks information related to Mr. Nelson’s allegation of conspiracy between Plaintiff and Plaintiff’s “agent” to harm Mr. Nelson. Defendant’s response listed only objections. The response referenced that it would “respond as follows”, but no further language followed. This is clearly not a sufficient response. It must be supplemented.

4. Special Interrogatory No. 90

Special Interrogatory 90 seeks the identification of all documents related to Mr. Nelson’s claim of damages due to negligence. Defendant states that he does not have knowledge sufficient to respond fully and identifies no documents. This is contrary to a previous form interrogatory response that identified some documents. This is not a sufficient response.

Plaintiff’s motion to compel further responses to Special Interrogatories, Set One is GRANTED. Dan Nelson shall serve a verified, code-compliant response, without objection, within 20 days of the date of this order.

C. Motion to Compel Further Responses to Document Requests

A valid motion to compel further responses requires showing specific facts demonstrating good cause justifying the discovery sought. CCP § 2031.310(b)(1). Good cause is demonstrated by the moving party showing 1) relevance to the subject matter, for example how the information in the documents tends to prove or disprove an issue in the case; and 2) specific facts justifying discovery, for example, why the information is necessary for trial preparation or would prevent surprise at trial. Brown & Weil, Civil Procedure Before Trial, § 8:1495.6 [citing Kirkland v. Superior Ct. (2002) 95 Cal.App.4th 92, 98]. Additional facts demonstrating there is no alternative source for the information is important, but not essential in every case to demonstrate good cause. Brown & Weil at § 8:1495.6. Unless an extension has been granted in writing, this motion must be filed within 45 days of service of the verified responses. Code Civ. Proc. §2031.310(c), Standon Co. v. Superior Ct. (4th Dist. 1990) 225 Cal.App.3d 898, 902.

Upon a showing of good cause, the burden falls on the responding party to justify any objections made to the document disclosure. Brown & Weil at §8:1496 [citing Kirkland 95 Cal.App.4th at 98] If only an item or category of an inspection demand is objectionable, the response shall contain a statement of compliance, or representation of inability to comply with respect to the remainder of that item or category Code Civ. Proc. § 2031.240 (a). When objecting to a request for production, either in full or in part, the grounds for that objection must be fully set forth. Code Civ. Proc. § 2031.240(b)(2). If the objection is based on a privilege, or based on the attorney work-product rule, the specific privilege invoked, or the work-product rule must be expressly asserted. Code Civ. Proc. § 2031.240(b)(2). Additionally, for any demand deemed partly or fully objectionable, the response shall identify, with particularity, any document, thing, tangible land or electronically stored information within the objectionable category that would be responsive to the request. Code Civ. Proc. § 2031.240(b)(1). This identification is the so-called “privilege log”. Code Civ. Proc. § 2031.240(b)(1); see also Hernandez v. Superior Ct. (2003) 112 Cal.App.4th 285, 291. A “privilege log” is used to provide parties and the Court a means to evaluate the merits of the objection. Hernandez, 112 Cal.App.4th at 292.

Finally, the motion must include a separate statement. Cal. Rules of Court 3.1345(a)(3).

A proper response to a discovery request will indicate that the responding party

1) agrees to comply fully with all conditions of the demand and that the party will produce what is demanded, that the items are in the custody of the responding party and there is no objection. Code Civ. Proc. §2031.220;

2) The party will partially comply, identifying what will be produced and that they are in the custody or control of the party, that the party is unable to comply with a portion of the demand, and state the reasons why full compliance is impossible. Ibid; or

3) Provide an objection and state that compliance is not possible, provide the grounds for the objection, and if privilege is the ground for objection, provide a log of documents that are being withheld on the ground of privilege. Code Civ. Proc. §2031.240(a).

Plaintiff prefaced each reason in its separate statement with language identifying the requested documents’ relevance and why the information is necessary. The Court finds that these statements demonstrate sufficient good cause for each discovery item requested.

1. Global Cinema Distribution Nevada’s responses

Global Cinema Distribution Nevada made the same objection that it does not exist as referenced supra. For the same reasons, that objection is non-meritorious. Global Cinema Distribution Nevada’s response was served late, waiving all objections. Because Dan Nelson identified himself as a former manager, he lacked authority to bind Global Cinema Distribution Nevada. Therefore, all responses are unverified.

The unverified responses themselves typically include language to the effect of non-privileged responsive documents have been produced by other individuals. First, because objections are waived, including privilege, this leads to the conclusion that other documents exist. Second, a code-compliant response must reference the efforts taken to comply with the request, especially when the response indicates that the responding party will produce nothing. Third, the response must identify the responsive documents that were previously produced, if any.

Global Cinema Distribution Nevada’s responses are ineffective. An order to compel further responses is appropriate.

Plaintiff’s motion to compel further responses to its Request for Production of Documents, Set One from Global Cinema Distribution Nevada is GRANTED. Global Cinema Distribution Nevada shall serve a code-compliant response, without objection, verified by an officer or other individual who has the ability to bind the company within 20 days of the date of this order.

2. Dan Nelson’s responses

Dan Nelson’s responses follow two patterns: Either a series of boilerplate objections followed by a statement that all documents have been produced, or a series of objections with no other substantive response.

Because all objections, including privilege, have been waived, the responses with no response other than objections are clearly defective. The statements that all documents have been produced are not complete because they do not speak to efforts taken to uncover other documents, or to identify those documents previously produced. As a result, an order to compel further responses is appropriate.

Plaintiff’s motion to compel further responses to its Request for Production of Documents, Set One from Dan Nelson is GRANTED. Dan Nelson shall serve a verified, code-compliant response, without objection, within 20 days of the date of this order.

3. Golden Leaf Pictures’ responses

Golden Leaf Pictures’ responses follow the same pattern as those of Global Cinema Distribution Nevada’s. Golden Leaf asserts that it ceased existence and that non-privileged documents have been produced by others. As noted, supra, objections, including privilege, are waived. Golden Leaf Pictures’ responses are defective.

Plaintiff’s motion to compel further responses to its Request for Production of Documents, Set One from Golden Leaf Pictures is GRANTED. Golden Leaf Pictures shall serve a verified, code-compliant response, without objection, within 20 days of the date of this order.

4. Lava Entertainment Holdings, LLC responses

As explained, supra, Dan Nelson’s verification as a former manager is ineffective to bind Lava Entertainment Holdings, LLC. Therefore, no response has been verified as to Lava Entertainment Holdings, LLC.

As Lava Entertainment Holdings, LLC’s response was untimely, all objections were waived.

The pattern of responses from Lava Entertainment Holdings, LLC matches that of Golden Leaf Pictures and Global Cinema Distribution Nevada. For the same reasons, an order to compel is appropriate.

Plaintiff’s motion to compel further responses to its Request for Production of Documents, Set One from Lava Entertainment Holdings, LLC is GRANTED. Lava Entertainment Holdings, LLC shall serve a code-compliant response, without objection, verified by an officer or other individual with the authority to bind the LLC within 20 days of the date of this order.

5. California Film Investments, LLC responses

As explained, supra, Dan Nelson’s verification as a former manager is ineffective to bind California Film Investments, LLC. Therefore, no response has been verified as to California Film Investments, LLC.

As California Film Investments, LLC’s response was untimely, all objections were waived.

The pattern of responses from California Film Investments, LLC matches that of Golden Leaf Pictures and Global Cinema Distribution Nevada. For the same reasons, an order to compel is appropriate.

Plaintiff’s motion to compel further responses to its Request for Production of Documents, Set One from California Film Investments, LLC is GRANTED. California Film Investments, LLC shall serve a code-compliant response, without objection, verified by an officer or other individual with the authority to bind the LLC within 20 days of the date of this order.

D. Motion to Have Matters Deemed Admitted

A party may move to have requests deemed admitted if the party serves no response or a late response. Code Civ. Proc. §2033.280(b). There is no deadline to file a motion to deem requests for admissions admitted, aside from before the discovery cut-off date. Code Civ. Proc. §§2024.020, 2033.280(b).

The responding party may avoid having the responses deemed admitted by serving a response that is in substantial compliance with the discovery code’s requirements to properly answer requests for admission and the failure to serve a response was the result of mistake, inadvertence, or excusable neglect. Code Civ. Proc. §2033.280(a).

Plaintiff seeks to have matters deemed admitted for the sets of Requests for Admission propounded on Defendants Global Cinema Distribution Nevada, Lava Entertainment Holdings, LLC, and California Film Investments, LLC. As referenced, supra, Dan Nelson signed a verification under penalty of perjury with the statement that Mr. Nelson was a former manager of these entities. As a former employee, Mr. Nelson lacks the authority to bind these entities, and therefore the verifications were ineffective.

Defendants’ responses included objections. While objections can constitute a response, see Korea Data Sys. Co. v. Sup. Ct. (4th Dist. 2997) 51 Cal.App.4th 1513, 1516, that is not the standard for a motion to have matters deemed admitted. Objections were waived due to Defendants’ lack of timely reply, and therefore any objections raised mean that a response is not in substantial compliance with the discovery code’s requirements.

Plaintiff’s motion to have matters deemed admitted in Request for Admissions, Set One is GRANTED as to Defendants Global Cinema Distribution Nevada, Lava Entertainment Holdings, LLC, and California Film Investments, LLC.

E. Request for Monetary Sanctions

Plaintiff makes a request for monetary sanctions. The request is code-compliant.

In support of the request for sanctions, Plaintiff cites Code of Civil Procedure Sections 2013.010, 2023.030(a), 2030.300(b), 2030.300(d), 2031.310(h), 2031.320(b), 2033.280(a), 2033.280(b), 2033.210(a), and California Rule of Court, rule 3.1348(a).

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.

California Rule of Court, rule 3.1348(a) is appropriate for each request for monetary sanction as it applies to Defendants. This rule allows the Court to grant sanctions to a prevailing party, even when the opposing party has filed no opposition to the motion.

The other sections cited by Plaintiff are appropriate as it applies to Ms. MacDonald, since they speak to unsuccessfully opposing a motion.

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.” See Cal. Rules of Court, rule 2.30.

The Court may impose monetary, evidentiary, contempt or terminating sanctions where a party is engaging in conduct that is a misuse of the discovery process. See Code Civ. Pro. § 2023.030. Misuses of the discovery process include but are not limited to:

(e) Making, without substantial justification, an unmeritorious objection to discovery. (f) Making an evasive response to discovery. Code Civ. Pro. § §2023.010(e),(f).

The California Code of Civil Procedure states that the Court shall impose monetary sanctions in many different situations. See Code Civ. Pro. § 2030.300(d) (Imposing monetary sanctions for a motion to compel further responses to interrogatories); Code Civ. Pro. § 2033.280(c) (Imposing monetary sanctions for delay or failure to respond to a request for admission); Code Civ. Pro. § 2031.310(d) (Imposing monetary sanction against losing party for motion to compel further responses to inspection demand)

However, where the Court “finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust” no monetary sanctions shall be imposed. (Code Civ. Proc. § 2031.060(h)). Where there are no opposition papers filed, the proper source of authority for monetary sanctions is Rule of Court 3.1348(a) as there has been no failed opposition.

In determining the amount for monetary sanctions the determination of a reasonable attorney’s fee involves multiplying the time spent and reasonable hourly compensation of each attorney involved in the presentation of the case. Serrano v. Priest (1977) 20 Cal.3d 25, 48-49. Sanctions should be awarded only for expenses actually incurred. See Tucker v. Pacific Bell Mobile Services (1st Dist. 2010) 186 Cal.App.4th 1548, 1551. Sanctions are intended to be remedial in nature, not punitive. See Kahn v. Kahn (1977) 68 Cal.App.3d 372, 381.

Plaintiff states that he seeks monetary sanctions against each Defendant and against Defendants’ counsel, Lucia MacDonald.

1. Sanctions against Lucia MacDonald

Ms. MacDonald contends that sanctions against her are inappropriate because all delays were the fault of the party and not of counsel. She cites Manuel, In re Estate of Dorothy (2010) 187 Cal.App.4th 400 for the proposition that the Court cannot impose sanctions against an attorney because counsel did not advise the party to evade discovery. Her citation is inapt because Manuel was analyzing Code of Civil Procedure Section 2033.420, which speaks to awarding cost of proof for denying Requests for Admission. However, Section 2033.420 specifically does not refer to sanctions against counsel, and thus the Court is baffled as to why Ms. MacDonald would cite such a case.

Next, Ms. MacDonald states that Code of Civil Procedure Section 2023.030(a) prevents the Court from awarding sanctions against her because it requires a finding that an attorney advised conduct resulting in the misuse of discovery. Ms. MacDonald’s argument is intriguing and raises questions about how much the attorney-client privilege protects attorneys because inquiries into the advice provided to clients is so highly protected as a matter of law. Those questions do not need to be answered to resolve this motion.

The Court notes that Ms. MacDonald’s request to withdraw was filed over a week after the instant motions were filed. If matters were as Ms. MacDonald contends, such a request to withdraw should have been made long before the instant motion, the moment Ms. MacDonald had suspicions as to the veracity of her clients’ statements. She apparently made no inquiry into Mr. Nelson’s association with the Defendant business entities, especially as to his authority to bind them, since she submitted the verifications to Plaintiff.

Regardless of how the Court feels about attorneys throwing their clients under the bus, the fact remains that Ms. MacDonald, at the very least, made unmeritorious objections to discovery. See Food 4 Less Supermkts., Inc. v. Superior Ct.(2d Dist 1995) 40 Cal.App.4th 651, 657 (objections are based on the legal analysis of counsel, not the party). Plaintiff has also provided documentation that demonstrates that Ms. MacDonald made statements, such as indicating having the possession of responsive documents, and later retracting those statements. These are discovery abuses and are sanctionable.[3] Thus any sanctions appropriate against Defendants in this matter are also appropriate against counsel.

2. Monetary Sanctions

Plaintiff seeks sanctions against Defendants and Defendants’ counsel. Plaintiff’s counsel, Ms. Orr, indicates she bills at a rate of $235.00 per hour. She also indicates that her legal assistant bills at $100.00 per hour. These are both normal billing rates within Santa Clara County.

Ms. Orr declares that she spent 12.1 hours meeting and conferring attempting to avoid filing this motion. Because meeting and conferring is a prerequisite to filing, it is not considered a cost incurred to file the motion. As a result, these hours are not reimbursable.

Ms. Orr declares that she spent 58.4 hours preparing the papers for the motion itself as well as Ms. Orr’s legal assisting spending 10.1 hours (equivalent approximately to 4.2 hours at Ms. Orr’s rate). The Court would like to note that it appreciates the thoroughness of each motion. However, much of the language used was duplicative across the motions, sometimes just changing the discovery item name while leaving the rest of a paragraph intact. The Court believes that 30 hours of time at Ms. Orr’s rate is a more appropriate assessment. This accounts for the very thorough and lengthy Separate Statement, the Declaration, the Exhibit compilation, and the three motions, including notice and memoranda.

Plaintiff’s request for monetary sanctions against Defendants and Defendants’ counsel is GRANTED IN PART. Defendants and Defendants’ counsel shall pay $7050.00 to Plaintiff’s counsel within 20 days of the date of this order.

IV. Conclusion and Order

Plaintiff’s request the Court take judicial notice is GRANTED. The Court takes judicial notice of Defendants’ Demurrer to the Second Amended Complaint, Plaintiff’s Third Amended Complaint, Defendants’ Answer to the Third Amended Complaint, Defendants’ Cross-Complaint, and several Cross-Plaintiffs’ Request for Dismissal. The Court also takes judicial notice of the fact that Defendants have not sought a protective order or relief from waiver of its objections as it regards its discovery obligations. The Court also takes judicial notice of Nevada Revised Statutes Sections 86.361 and 86.155 and notice of case AA Primo Builders, LLC v. Washington (Nev. 2010) 245 P.3d 1190.

____________________________

DATED:

_________________________________________________

HON. SOCRATES PETER MANOUKIAN

Judge of the Superior Court

County of Santa Clara

[1] “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).

[2] While not required by code or rule of court, if Plaintiff needs to file further motions with lengthy separate statements covering a multitude of issues, the Court would appreciate tabs for the different sections. It makes it easier for the Court to review the merits of the motion before it to not have to constantly flip through hundreds of pages that look substantially the same for particular responses.

[3] The Court notes that Ms. MacDonald makes an offer to have the Court view in camera certain documents purporting to be communications between Ms. MacDonald and her clients. The Court declines the invitation to break attorney-client privilege held by Ms. MacDonald’s clients. The Court suggests Ms. MacDonald review the requirements and limitations the attorney-client privilege imposes on counsel.

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