2016-00194586-CU-BC

Jimboy’s Marketing Inc vs. Jimboy’s North America LLC

Nature of Proceeding: Motion to Compel Plaintiff’s Further Responses to Admissions, Set

Filed By:

Defendant Jimboy’s North America, Inc. (“JNA”) moves to compel further responses from Plaintiff Bellagrace, Inc. (“BGI”) to its (1) special interrogatories, set two; (2) request for admissions, set two; (3) form interrogatories, set two; and (4) request for production of documents, set two. JNA’s motions are GRANTED as follows.

Background

For many years, Plaintiff Jimboy’s Marketing, Inc. (“JMI”) acted as an area franchisor for Jimboy’s Tacos restaurants under a Master Franchise Agreement with non-party Jimboy’s Tacos, Inc.

JNA is the successor to Jimboy’s Tacos, Inc. In 2012, JMI and JNA entered into a Transition Agreement, in which JMI assigned to JNA 38 franchised restaurants and

other assets.

Plaintiff Bellagrace, Inc. (“BGI”) is the franchisee owner of Jimboy’s Store #115.

The dispute between BGI and JNA arises out of BGI’s franchise agreement with JMI, which had a 15 year term with two options to renew for additional periods of 5 years per renewal (“Franchise Agreement”).

BGI’s Franchise Agreement for Jimboy’s Store #115 was one of the franchises assigned by JMI to JNA in the Transition Agreement.

On February 1, 2016, JNA sent BGI a termination notice for Jimboy’s Store #115. Following termination, BGI filed suit against JNA. Three causes of action remain: breach of contract (the Franchise Agreement), violation of Business & Professions Code section 20025 (failure to provide sufficient notice of intention not to renew a franchise), and declaratory relief (concerning the parties’ respective rights and duties under the Franchise Agreement).

JNA asserts the termination was proper due to BGI’s refusal to comply with corporate franchise directives discussed in letters JNA provided BGI in 2013 and 2014. JNA asserts BGI’s franchise was terminated as a result of said non-compliance.

On or about June 4, 2018, JNA served BGI with form interrogatories set two (“FIs”); special interrogatories, set two (“SIs”); requests for admission, set two (“RFAs”); and request for production of documents, set two (“RFPs”). Following BGI’s receipt of these discovery requests, the parties stipulated to continue the trial date and discovery deadlines. The Court subsequently granted the continuance and reset trial to commence on March 18, 2019. Pursuant to the parties’ stipulation, BGI was given until August 10, 2018 to respond to the discovery requests. On July 30, 2018, BGI served responses to the referenced discovery. JNA believed many of BGI’s responses were insufficient, and a meet and confer process followed.

JNA now moves to compel further responses to its SIs, RFAs, FIs, and RFPs. JNA also requests monetary sanctions in the amount of its attorney fees and filing fees incurred in bringing the motions. Although filed as four separate motions to compel, the Court addresses these discovery disputes in a single ruling.

Special Interrogatories, Set Two

JNA moves to compel code-compliant responses to SIs Nos. 8-12, which concern BGI’s declaratory relief cause of action. For example, SI No. 8 states: “Identify what ‘rights and duties of’ PLAINTIFF BGI and DEFENDANT JNA require a ‘judicial determination’ with respect to the FRANCHISE AGREEMENT.” (JNA’s Notice of Lodgment ISO Mot. to Compel Further Reponses to SIs, Ex. A.) In response to each of the referenced SIs, BGI stated the same objection: “Objected to on the grounds that the information requested is not yet known or available to BGI.” (Id., Ex. B.) Other than the objection, no response was provided.

JNA argues BGI’s objection is “evasive and fails to meet the standards and requirements set out by the Code of Civil Procedure.” (JNA’s Mem. P.&A. ISO Mot. to Compel Further Responses to SIs 4:25-26.) JNA states:

“It is clear that [BGI’s] responses are insufficient and fail to meet any of the criteria laid out by [Code of Civil Procedure section § 2030.220] subsection[s] (a)-(c). [JMI] not only failed to provide a factual statement or response, but it also failed to indicate that it had made ‘a reasonable and good faith effort to obtain the requested information.’ For these reasons, the responses must be amended as a matter of law.”

(Id. at 5:7-11.)

BGI opposes the motion. However, its opposition does not specifically address the SIs or the single objection stated in response thereto. Instead, BGI argues generally that all of JNA’s discovery requests (SIs, FIs, RFAs, and RFPs) are not reasonably calculated to lead to the discovery of admissible evidence and are unreasonably cumulative, duplicative, and/or burdensome. Since these objections were not stated in BGI’s responses to the SIs, they are waived. (Scottsdale Ins. Co. v. Super. Ct. (1997) 59 Cal.App.4th 263, 272-274.)

“An interrogatory may relate to whether another party is making a certain contention, or to the facts, witnesses, and writings on which a contention is based. An interrogatory is not objectionable because an answer to it involves an opinion or contention that relates to fact or the application of law to fact, or would be based on information obtained or legal theories developed in anticipation of litigation or in preparation for trial.” (Code Civ. Proc., § 2030.010, subd. (b).)

“The party to whom interrogatories have been propounded shall respond in writing under oath separately to each interrogatory by any of the following:

(1) An answer containing the information sought to be discovered.

(2) An exercise of the party’s option to produce writings.

(3) An objection to the particular interrogatory.”

(Code Civ. Proc., § 2030.210, subd. (a).) “Each answer in a response to interrogatories shall be as complete and straightforward as [possible].” (Code Civ. Proc., § 2030.220, subd. (a).)“If the responding party does not have personal knowledge sufficient to respond fully to an interrogatory, that party shall so state, but shall make a reasonable and good faith effort to obtain the information by inquiry to other natural persons or organizations, except where the information is equally available to the propounding party.” (Id. at subd. (c).)

A “consequence of the duty to attempt to obtain information is that ‘I don’t know’ or ‘Unknown’ are insufficient answers to matters presumably known to the responding party.” (Weil & Brown, Cal. Practice Guide: Civ. Procedure Before Trial (The Rutter Group 2018) ¶ 8:1061.) “The responding party must make a reasonable effort to obtain whatever information is sought; and if unable to do so, must specify what information is unavailable and what efforts he or she made to obtain it.” (Ibid. [citing Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 782].)

Applying the referenced standards, BGI’s responses to JNA’s SIs Nos. 8-12 are

inadequate. As an initial matter, BGI’s “objection” is not a proper objection. Further, to the extent the “objection” is construed as a response, it is incomplete. JNA asked BGI to provide foundational information concerning its declaratory relief cause of action based upon allegations BGI made in the Third Amended Complaint. (See Third Am. Compl. ¶ 54.) The responsive information is presumably available to BGI or sources under its control especially given the age and procedural stage of this action. And if the information is somehow not within BGI’s knowledge, BGI must state its efforts to obtain the information.

Accordingly, JNA’s motion to compel further responses to its SIs is GRANTED. No later than November 12, 2018, BGI shall serve further verified responses in accordance with the above and in compliance with Code of Civil Procedure (“CCP”) sections 2030.210, et seq.

Request for Admission, set two

JNA moves to compel further responses to RFAs Nos. 4-69 and 72-85, arguing BGI’s objections thereto are evasive and improper. JNA asserts:

“With the goals of trial expedience and evaluating BGI’s causes of action, JNA . . . formulated [RFAs] Nos. 4-69 and 72-85 to shed additional light on the following matters/areas of potential evidence, all of which are currently in dispute:

a) BGI’s complained factual allegations and causes of action;

b) JNA’s relevant defenses;

c) the authenticity of relevant documents;

d) BGI’s compliance with JNA’s corporate directives;

e) JNA’s termination of the franchise agreement with BGI; and

f) BGI’s claimed statutory penalties and damages.

Because each request is directly related to a material issue, or issues, in dispute, BGI’s objection of relevancy holds absolutely no merit, and [JNA] is entitled to code-compliant responses. As to BGI’s claims that the subject requests are not in controversy, such a claim is, frankly, baseless. Each of the areas of highlight remain[s] in dispute.”

(JNA’s Mem. of P.&A. ISO Mot. to Compel Further Responses to RFAs 6:1-14.)

BGI raised the same two objections in response to each of the referenced RFAs: (1)

the information sought is irrelevant and not reasonably calculated to lead to the discovery of admissible evidence, and (2) the subject of the RFA is not in controversy in this action. (JNA’s Notice of Lodgment ISO Mot. to Compel Further Reponses to RFAs, Ex. B.) No response was provided to the RFAs other than the objections.

BGI opposes the motion arguing there “no matter in controversy any longer” because “[t]he only issue in this case . . . was whether the term of [the] franchise agreement was 15 years (as JNA contended), or whether [it] provided two five-year options to extend its term[,]” and JNA conceded in an April 9, 2018 letter that the Franchise Agreement provided two five-year options to extend the term. (BGI’s Opp’n 8:16-23, 9:5-21, 12:23-13:3.) BGI further argues the RFAs are unreasonably burdensome, oppressive, and cumulative and that the number of RFAs propounded is unwarranted under CCP section 2033.040. (Id. at 2:7-16, 12:15-13:3.)

The Court only addresses the two objections raised in BGI’s responses to the RFAs since any other objections have been waived. (See Scottsdale Ins. Co., supra, 59 Cal.App.4th at 272-274.)

JNA replies, inter alia, counsel’s statements made in the April 9, 2018 letter are inadmissible under Evidence Code sections 1152, subdivision (a) and 1154 because they were statements made in connection with settlement discussions. (JNA Reply 5:13-25.) JNA states, “[s]uch statements are certainly not evidentiary admissions . . . as [BGI] seem[s] to argue in [its] opposition[].” (Id. at 5:25-26.)

CCP section 2017.010 provides in relevant part: “Any party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action . . . if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence. Discovery may relate to the claim or defense of the party seeking discovery or of any other party to the action.” “In the context of discovery, evidence is ‘relevant’ if it might reasonably assist a party in evaluating its case, preparing for trial, or facilitating a settlement.” (Glenfed Dev. Corp. v. Super. Ct. (1997) 53 Cal.App.4th 1113, 1117.)

CCP section 2033.010 concerns the use of requests for admission. It states: “Any party may obtain discovery within the scope delimited [in the Civil Discovery Act] by a written request that any other party to the action admit the genuineness of specified documents, or the truth of specified matters of fact, opinion relating to fact, or application of law to fact. A request for admission may relate to a matter that is in controversy between the parties.”

Each response to a request for admission must “be as complete and straightforward as the information reasonably available to the responding party permits” and shall:

“(1) Admit so much of the matter involved in the request as is true, either as expressed in the request itself or as reasonably and clearly qualified by the responding party.

(2) Deny so much of the matter involved in the request as is untrue.

(3) Specify so much of the matter involved in the request as to the truth of which the responding party lacks sufficient

information or knowledge.”

(Code Civ. Proc., § 2033.220, subd. (a), (b).) If the responding party “gives lack of information or knowledge as a reason for a failure to admit all or part of a request for admission, that party shall state in the answer that a reasonable inquiry concerning the matter in the particular request has been made, and that the information known or readily obtainable is insufficient to enable that party to admit the matter.” (Id., subd.
(c).)

The Court overrules BGI’s objections to the referenced RFAs. The reasons for JNA’s termination of the Franchise Agreement are disputed by the parties; contrary to BGI’s position, the length of the Franchise Agreement’s term is not the only issue in the case, and BGI has not presented any admissible evidence to demonstrate the parties have narrowed by agreement or admission the issues to be litigated. Accordingly, JNA’s RFAs appear reasonably calculated to lead to the discovery of admissible evidence. The subject RFAs concern multiple topics, including: the authenticity of documents, JNA’s termination of the Franchise Agreement, and BGI’s compliance with JNA’s corporate directives. For example, RFA No. 7 asks BGI to admit “Attachment 4 is a true and correct copy of Jimboy’s Tacos New Restaurant Specification Guide provided to Plaintiff BGI on September 19, 2014.” (JNA’s Notice of Lodgment ISO Mot. to Compel Further Reponses to RFAs, Ex. A, at p. 3 [emphasis and use of all caps omitted].) And RFA No. 15 requests BGI to admit “Plaintiff BGI’s Jimboy’s Store #115 did not take any steps to comply with the standards outlined by the Franchise Compliance Letter following receipt [thereof].” (Ibid. [emphasis and use of all caps omitted].)

For the stated reasons, JNA’s motion to compel further responses to its RFAs is GRANTED. No later than November 12, 2018, BGI shall serve further verified responses in accordance with the above and in compliance with Code of Civil Procedure sections 2033.210, et seq.

Form Interrogatories, set two

JNA moves to compel further responses to its FIs, No. 17.1, as related to its RFAs Nos. 4-69 and 72-85.

FI No. 17.1 is served in conjunction with requests for admission and asks the responding party to provide the following information for any response to a request for admission that is not an unqualified admission:

(a) state the number of the request;

(b) state all facts upon which you base your response;

(c) state the names, ADDRESSES, and telephone numbers of all PERSONS who have knowledge of those facts; and

(d) identify all DOCUMENTS and other tangible things that support your response and state the name, ADDRESS, and telephone number of the PERSON who has each DOCUMENT or thing.

Here, in response to FI No. 17.1 as related to the referenced RFAs, BGI: identified the RFA, objected to the interrogatory on the grounds it is irrelevant and not reasonably calculated to lead to the discovery of admissible evidence in response to subpart (b), identified the president of BGI in response to subpart (c), and identified the Complaint and exhibits attached thereto in response to subpart (d). (JNA’s Notice of Lodgment ISO Mot. to Compel Further Reponses to FIs, Ex. B.)

JNA argues, “[a]summing the Court agrees that the associated [RFAs] pertain to relevant and controverted matters in dispute, [BGI] is required to provide an additional response to Form Interrogatory No. 17.1 . . . for reach response to [the RFAs] that is or remains anything but an unqualified denial.” (JNA’s Mem. P.&A. ISO Mot. to Compel Further Response to FIs 5:6-9.)

The Court agrees. As discussed above, BGI’s responses to JNA’s RFAs were insufficient. Therefore, BGI’s responses to FI No. 17.1 as it relates to these RFAs are also deficient.

For the stated reasons, JNA’s motion to compel further responses to FI No. 17.1 as it relates to the referenced RFAs is GRANTED. No later than November 12, 2018, BGI shall serve further verified responses in accordance with the above and in compliance with Code of Civil Procedure sections 2030.210, et seq.

Request for Production, set two

JNA moves to compel further responses to its RFPs Nos. 3-13, which concern BGI’s claimed statutory, general, and special damages. For example, RFP No. 4 states, “Provide any and all documents evidencing Jimboy’s Store #115’s operating revenue from January 1, 2016.” (JNA’s Notice of Lodgment ISO Mot. to Compel Further Responses to RFPs, Ex. A, at p. 4.) RFP No. 7 states, “Provide any and all documents evidencing [BGI’s] ‘resalable current inventory’ at the time it received the notice of termination dated February 1, 2016. For the purpose of this Request, ‘resalable current inventory’ is defined by its use in Business and Professions Code section 20035.” ( Ibid.)

BGI responded to each of the referenced RFPs by objecting on the grounds that the RFP is “irrelevant . . . and not reasonably calculated to lead to the discovery of admissible evidence” and that the RFP is “overly broad, unduly burdensome and oppressive.” (JNA’s Notice of Lodgment ISO Mot. to Compel Further Responses to RFPs, Ex. B, at pp. 2-3.)

JNA argues BGI’s relevance objection is “completely without merit” since the subject RFPs “are limited to BGI’s claimed . . . damages . . . . Assuming BGI still wishes to pursue damages of any kind, the [RFPs] are certainly relevant and require a code-compliant response.” (JNA’s Mem. P.&A. ISO Mot. to Compel Further Reponses to RFPs 5:20-24.) Concerning the “overly broad, unduly burdensome and oppressive” objections, JNA states BGI “fails to identify how or why these requests fall under these objections.” (Id. at 5:25-26.) JNA also states “the requested documents are internal in nature” and JNA “has no way of accessing the[] documents through [other] means.” ( Id. at 6:5-6.) JNA concludes, “assuming [BGI] still intends to claim damages, something [it] will be required to prove at trial, [JNA] is certainly entitled to the requested documents. If no such documents exist, [BGI] is required to state as much

in [its] response as is required by the Code of Civil Procedure.” (Id. at 6:6-9.)

The Court agrees. “In the . . . context of a request to produce documents, a party who seeks to compel production must show ‘good cause’ for the request [citation] — but where, as here, there is no privilege issue or claim of attorney work product, that burden is met simply by a fact-specific showing of relevance. [Citation.]” (Glenfed Dev. Corp., supra, 53 Cal.App.4th at 1117 [footnote omitted].) JNA satisfied that showing as the RFPs at issue concern BGI’s damages. “Once good cause was shown, the burden shifted to [BGI] to justify [its] objection[s].” (Kirkland v. Super. Ct. (2002) 95 Cal.App.4th 92, 98.) BGI has failed to do so here. Although BGI opposes the motion, its opposition does not specifically address JNA’s RFPs or its objections thereto. (See, e.g., BGI’s Opp’n 11:3-6 [discussing burdensome and oppressive objections in the context of all of JNA’s discovery being irrelevant because “the only issue . . . is whether the Franchise Agreement . . . provided a single 15-year term . . . or whether it provided two five-year options to extend the 15-year term”].)

For the stated reasons, JNA’s motion to compel further responses to RFPs 3-13 is GRANTED. No later than November 12, 2018, BGI shall serve further verified responses in accordance with the above and in compliance with Code of Civil Procedure sections 2031.210, et seq.

BGI’s Continuance Request

BGI requests in its oppositions to JNA’s four discovery motions that the hearing on the motions be continued until December 10, 2018, because BGI has a pending motion for summary adjudication which could moot the subject discovery.

BGI’s request for a continuance is unsupported by authority and is denied.

Request for Monetary Sanctions

JNA requests monetary sanctions in connection with each motion to compel comprising four hours of attorney fees for bringing the motion at the rate of $325 per hour, the $60 filing fee, and the prorated amount of $243.75 per motion for its single reply.

Sanctions in the total amount of $3,815.00 (representing reasonable attorney fees of 2 hours of per motion at $325/hr, the $60 filing fee per motion, and the prorated amount of $243.75 in attorney fees per reply) shall be paid by BGI to JNA’s counsel no later than November 30, 2018. (See Code of Civ. Proc., §§ 2030.300, subd. (d); 2031.300, subd. (c); and 2033.290, subd. (d).) If sanctions are not paid by the due date, JNA may submit a formal order for enforcement purposes. (Newland v Super. Ct. (1995) 40 Cal.App.4th 608, 610.)

This minute order is effective immediately. No formal order or other notice is required. (Code Civ. Proc., § 1019.5; Cal. Rules of Court, rule 3.1312.)