Case Number: EC065517 Hearing Date: March 06, 2020 Dept: E

MOTION FOR TERMINATING SANCTIONS

Date: 3/6/20

Case: G’s Properties, Inc. et al. v. Alice Marysol Ortiz, et al. (EC065517)

TENTATIVE RULING:

On September 20, 2019, the Court granted defendant/cross-complainant Alice Marysol Ortiz’s motion to compel the deposition of plaintiff G’s Properties, Inc.’s Person Most Knowledgeable (“PMK”). (Cohon Decl. ¶ 20 & Ex. J.) In granting the motion, the Court was explicit in its Order that “G’s Properties, Inc. is ordered to designate and produce witness(es) to appear for deposition and to give testimony . . . as to the matters requested in the notice of deposition served June 5, 2019.” (Ex. J.) The Court further ordered such deposition take place on November 20, 2019 at 10:00 a.m., with the deposition to be completed no later than December 6, 2019.

On November 20, 2019, after arriving late to the Court-ordered deposition (and with his client’s witness Rodney Gleicher showing up much later), counsel for plaintiff G’s Properties, Inc. insisted that defendant’s counsel set forth the subject matters he would question Gleicher about at the outset of the deposition, even before the standard admonitions could be given. (Cohon Decl. ¶¶ 29-30 & Ex. L.) Defendants’ counsel indicated he would address the deposition topics when the deposition notice was before the witness. (Cohon Decl. ¶ 30 & Ex. L.) In response, plaintiff’s counsel reasserted his position, demanding: “You need to tell me what topics you’re asking questions – you’re going to ask a question on, so we can tell you who the designated witness is.” (Ex. L at p. 7.) When defense counsel did not instantly oblige, plaintiff’s counsel then took the position that he would listen to one more question before deciding whether to suspend unilaterally the Court-ordered deposition. (Ex. L. at p. 8.) Next, defense counsel posed the innocuous question of whether Gleicher had previously been deposed, and counsel for plaintiff thereafter decided to end the deposition, stating: “I’m suspending the deposition because we have not had the opportunity to designate a witness to the particular topic that you’ve – listed in the deposition. Let’s go.” (Ex. L. at p.8.)

Plaintiff was not entitled to suspend the deposition. CCP § 2025.230, as well as the Court’s September 20, 2019 order, imposed on plaintiff and its counsel, not defendants’ counsel, the obligation “to designate and produce witness(es) . . . as to the matters requested in the notice of deposition.” (Ex. J.) Plaintiff and its counsel had ample opportunity from September 20, 2019 to November 20, 2019 to determine which witness or witnesses should be produced for deposition in compliance with the Court’s Order and the Discovery Act. The Court finds that plaintiff and its counsel acted in bad faith by, among other things: (1) failing to submit to the Court-ordered deposition; (2) failing to identify and produce an appropriate witness or witnesseses on the identified topics; (3) feigning an inability for Gleicher to submit to any questions, even though he was the only witness produced; (4) insisting, without legal authority or reasoned explanation, that the deposing party was obligated to list the topics for questioning at the outset of the deposition, when the topics were set forth in the deposition notice; and (5) ultimately ending the deposition unilaterally without making any good faith attempt to participate. Indeed, upon reading the deposition transcript (Ex. L), the Court concludes plaintiff and its counsel had no intention to submit to the Court-ordered deposition of plaintiff’s Person Most Knowledgeable and engaged in conduct and the assertion of fabricated and/or unsupported reasons to suspend the deposition in a willful attempt to avoid compliance with the Court’s Order. The events of November 20, 2019, constitute yet another unfortunate misuse of the discovery process by plaintiff and its counsel in a series of misuses of the discovery process over the course of this litigation.

Before turning to the appropriate sanction, the Court first pauses to address plaintiff’s explanations for its conduct. Plaintiff contends that setting forth the topics at the outset of the deposition was necessary here, because the Court had previously rejected G’s Properties’s position that Gleicher rightly refused to answer questions by counsel for Bank of Hope at a prior deposition on the ground such questions concerned matters purportedly not identified in the Notice of Deposition. It is not altogether clear how this argument explains or justifies plaintiff’s conduct with respect to this Court-ordered deposition, because the reasonable and appropriate response to questioning outside the scope of the deposition notice or the deponent’s knowledge was for Gs Properties to object to such questions as they were posed and not to cancel the deposition outright before it could even begin. Moreover, even assuming plaintiff were correct in its position that review of the deposition topics was warranted or required at or near the beginning of the deposition, the transcript demonstrates that defense counsel did not refuse to set forth the topics. Rather, defense counsel stated that he would set forth the topics when the deposition notice was in front of him and the witness. (Ex. L at p. 6 [“[W]e’ll deal with it when I have the deposition notice in front of me and in front of the witness”].) Plaintiff instead takes the position that it had a right to dictate the sequence of the deposition and could suspend the deposition if it did not track plaintiff’s preferred sequencing. Plaintiff cites, and the Court is aware of, no authority to support plaintiff’s position. Indeed, as the deposing party, logically it was largely within the discretion of defense counsel to determine in what order he would raise particular topics and ask certain questions.

In her motion, defendant/cross-complainant Ortiz seeks terminating sanctions for plaintiff’s misuse of the discovery process. Recognizing the seriousness of such sanctions and the limited circumstances in which they should be imposed, the Court finds they are warranted here. “A decision to order terminating sanctions should not be made lightly. But where a violation is willful, preceded by a history of abuse, and the evidence shows that less severe sanctions would not produce compliance with the discovery rules, the trial court is justified in imposing the ultimate sanction.” (Mileikowsky v. Tenet Healthsystem (2005) 128 Cal. App. 4th 262, 279-80.) No intermediate sanctions, such as issue or evidence sanctions, are required. A court is not required to impose sanctions in a graduated fashion, but may apply “the ultimate sanction” against a party who has persisted in refusing to comply with discovery obligations. (Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 793.) “The unsuccessful imposition of a lesser sanction is not an absolute prerequisite to the utilization of the ultimate sanction . . . .” (Scherrer v. Plaza Marina Coml. Corp. (1971) 16 Cal. App. 3d 520, 524.)

Here, terminating sanctions are appropriate. There is a long history of abuse of the discovery process on the part of plaintiff and plaintiff’s counsel since 2017, resulting in numerous orders compelling further responses to discovery and further answers at deposition. (Cohon Decl. ¶¶ 4-9 & Exs. A-G; Rasheed Decl. ¶¶ 3-6 & Exs. B, C, H, I.) Notably, plaintiff does not dispute the assertion by defense counsel that approximately $42,000 in monetary sanctions for prior discovery violations generally remains unpaid by plaintiff and plaintiff’s counsel. (Cohon Decl. ¶ 3; Cohon Reply Decl. ¶ 6.) Given plaintiff’s and plaintiff’s counsel’s failure to pay monetary sanctions, and, more importantly, the obvious conclusion that the imposition of monetary sanctions has had no apparent effect on deterring plaintiff’s and its counsel’s discovery violations over the years, the Court is convinced that lesser sanctions would not be effective in procuring compliance now. The Court has additionally considered defendant’s alternative request for the lesser sanction of an issue or evidence sanction, but the Court finds that the only meaningful issue or evidence sanctions commensurate with the conduct to be addressed (e.g., barring the testimony of Gleicher and/or other G’s Properties’ officers, directors, employees or agents, or deeming established certain issues set forth in Ortiz’s notice of motion) would essentially impede plaintiff’s ability to prove its claims and defenses as to effectively amount to a terminating sanction.

In concluding that terminating sanctions are appropriate and necessary, the Court is mindful that, after plaintiff suspended the deposition, that same afternoon, counsel for plaintiff emailed opposing counsel about re-scheduling the deposition. (Cohon Decl. Ex. M at p. 11-12 [11/20/19 Francisco email at 1:58 PM].) Over a series of emails between counsel, plaintiff’s counsel made statements that he wanted to cooperate with defense counsel and that he was interested in re-scheduling the deposition. But he also conditioned the re-scheduling of a deposition on the same terms that led to his cancellation of the Court-ordered deposition in the first place. (Cohon Decl. Ex. M at p. 7 [12/2/19 Francisco email at 7:53 PM (“If you will indicate the subject on which you intend to ask questions, G’s Properties is ready designate a PMQ. If you will agree to that, we can promptly re-schedule the deposition”)].) As discussed, above, requiring that condition is indefensible. Nearly two months later, plaintiff’s counsel sent an email purporting to lift the condition. (Cohon Decl. Ex. M at p. 1 [1/13/20 Francisco email at 8:26 AM (“My client is now willing to designate PMQ for each of the subject categories prior to the deposition”).]) In context, the Court finds that delayed offer both hollow and disingenuous. As discussed above, plaintiff was under an obligation to designate and produce an appropriate PMK per the Court’s Order on September 20, 2019, as well as pursuant to CCP § 2025.230. Thus, plaintiff’s offer to follow the law and this Court’s Order four months later is relatively meaningless. Furthermore, plaintiff’s offer came on the heels of defense counsel making clear the defense would seek more serious sanctions for plaintiff’s and its counsel’s conduct. (Cohon Decl. Ex. M at p. 4 [1/9/20 Cohon email at 12:25 PM (“[M]onetary sanctions have not persuaded you to comply with discovery or court order . . . . At its essence, this is a dispute between you and your client on the one hand and the Court, and it is time to bring it to that forum”)].) Based on the history and pattern of discovery abuses, the Court finds that plaintiff’s counsel’s late offers are more consistent with attempting to create a record to appear cooperative for purposes of opposing a sanctions motion (see Francisco Decl. ¶¶ 15-18 & Ex. A) than genuinely attempting to be cooperative.

Finally, even though defendant did not state the grounds for the motion in the opening paragraph of the notice of motion as is required by Cal. Rule of Court 3.1110(a), an omission in the notice may be overlooked if the supporting papers make clear the grounds for the relief sought. (Luri v. Greenwald (2003) 107 Cal.App.4th 1119, 1125.) The purpose of the requirement to the state the grounds for relief in the notice of motion is to cause the moving party to “sufficiently define the issues for the information and attention of the adverse party and the court.” (Ibid.) The memorandum of points and authorities supporting the motion thoroughly sets forth the grounds for terminating sanctions.

For all of the foregoing reasons, pursuant to CCP § 2025.450(h), the motion for terminating sanctions is GRANTED. Plaintiff G’s Properties, Inc.’s claims asserted in the operative complaint, namely, the Third Amended Complaint, filed May 16, 2017, are hereby DISMISSED WITH PREJUDICE. As for Ortiz’s Cross-Complaint, filed March 7, 2017, cross-defendant G’s Properties, Inc.’s Answer thereto, filed April 12, 2017 is STRICKEN and default is entered against G’s Properties, Inc. as to the Cross-Complaint.

Further, pursuant to CCP § 2025.450(h), the Court awards monetary sanctions for costs and fees incurred in connection with the suspended deposition on November 20, 2019, and preparation of the instant motion for sanctions. Finding the requested sanctions are overstated, the Court reduces each parties’ request for sanctions consisting of attorney’s fees by half. Accordingly, plaintiff G’s Properties, Inc. and plaintiff’s counsel of record are ordered to pay $16,686.10 in monetary sanctions, for which they are jointly and severally liable, payable to defendants’ counsel as follows: (1) $2,187.50 to Bank of Hope (2) $2,756.25 to Pat’s Liquor, Inc.; and (3) $11,742.35 to Alice Marysol Ortiz, Henry Ortiz, and Ortiz Tire, Inc. ($11,165 attorney fees + $61.65 motion fee + $515.70 deposition cost).