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 Jimboy’s Marketing, Inc. (“JMI”) to its (1) special interrogatories, set two;

(2) request for admissions, set one; (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 collectively valued at approximately $3 million. JNA paid JMI less than $100,000 at the time in the form of cash and the assumption of some of JMI’s obligations. The remainder of the purchase price was to be paid over time in the form of concessions to JMI-related franchisees and payments to be made under a Management and Administrative Services Agreement (“MASA”). The MASA is an exhibit to the Transition Agreement and required JMI to provide JNA with management and administrative services in exchange for compensation.

In 2016, JNA gave JMI notice that it intended to terminate the MASA. JMI subsequently filed suit against JNA. Three causes of action remain: breach of contract (regarding the MASA), reformation, and declaratory relief (concerning the parties’ respective rights and duties under the Transition Agreement, including the MASA).

The parties dispute under what circumstances the MASA could be terminated. JMI asserts the MASA automatically renewed each year and could only be terminated if JMI defaulted in the performance of its duties, JNA provided notice of default, and JMI failed to cure the default. JNA maintains it had the option not to renew the MASA after the second year, which it chose to do in advance of the MASA’s anticipated renewal in August 2016.

On or about June 4, 2018, JNA served JMI with form interrogatories set two (“FIs”); special interrogatories, set two (“SIs”); requests for admission, set one (“RFAs”); and

request for production of documents, set two (“RFPs”). Following JMI’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, JMI was given until August 10, 2018 to respond to the discovery requests. On July 30, 2018, JMI served responses to the referenced discovery. JNA believed many of JMI’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. 12-16, which concern JMI’s declaratory relief cause of action. For example, SI No. 12 states: “Identify what ‘rights and duties of’ PLAINTIFF JMI and DEFENDANT JNA require a ‘judicial determination’ with respect to the TRANSITION AGREEMENT.” (JNA’s Notice of Lodgment ISO Mot. to Compel Further Reponses to SIs, Ex. A.) In response to each of the referenced SIs, JMI stated the same objection: “Objected to on the grounds that the information requested is not yet known or available to JMI.” (Id., Ex. B.) Other than the objection, no response was provided.

JNA argues JMI’s objection is “evasive” and JMI’s responses “fail[] 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 [JMI’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.)

JMI opposes the motion. However, its opposition does not specifically address the SIs or the single objection stated in response thereto. Instead, JMI 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 JMI’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, JMI’s responses to JNA’s SIs Nos. 12-16 are inadequate. As an initial matter, JMI’s “objection” is not a proper objection. Further, to the extent the “objection” is construed as a response, it is incomplete. JNA asked JMI to provide foundational information concerning its declaratory relief cause of action based upon allegations JMI made in the Third Amended Complaint. (See Third Am. Compl. ¶ 53.) The responsive information is presumably available to JMI or sources under its control, especially given the age and procedural stage of this action. And if the information is somehow not within JMI’s knowledge, JMI 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, JMI 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 one

JNA moves to compel further responses to RFAs Nos. 1-7, 10-12, 15-25, 30-32, 38, 40, 42-49, and 57, arguing JMI’s objections thereto are evasive and improper and JMI has failed to give code-compliant responses.

JMI objected to the referenced RFAs on the grounds that the information sought is irrelevant and not reasonably calculated to lead to the discovery of admissible evidence and/or that the subject of the RFA is not in controversy in this action. No response was provided to the RFAs other than the objections.

JNA contends:

“With the goals of trial expedience and evaluating JMI’s causes of action, JNA has formulated Request for Admissions Nos. 1-7, 10-12, 15-25, 30-32, 38, 40, 42-49, and 57 to shed additional light on the following matters/areas of potential evidence, all of which are currently in dispute:

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

b) JNA’s relevant defenses;

c) the authenticity of relevant documents;

d) contractual interpretation of the relevant language;

e) valuation of the consideration involved in the Transition Agreement;

f) the events leading up to the signing of the Transition Agreement;

g) the relationship of the involved parties;

h) JNA’s termination of the Transition

Agreement;

i) JMI’s claimed statutory penalties and damages; [and]

j) admissibility of potential extrinsic evidence.

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

(JNA’s Mem. of P.&A. ISO Mot. to Compel Further Responses to RFAs 7:1-18.)

JMI opposes the motion essentially arguing that JNA’s RFAs are irrelevant because the case comes down to an interpretation of the MASA (specifically under what circumstances it could be terminated), and no language in the MASA supports JNA’s position on the issue. JMI states “[w]hen the parties agree that the MASA accurately reflects their agreement, the resolution of the case is primarily a judicial

function.” (JMI’s Opp’n 9:13-17.) JMI then provides authority and argument concerning

principles of contract interpretation to support its reading of the MASA.

The strength of the parties’ respective positions on the merits of the case is not at issue in this motion. This is a discovery motion, not a motion for summary judgment. “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.) Relevance is not measured by the Court’s view of the case’s merits.

Accordingly, the Court overrules JMI’s relevance and “not in controversy” objections to the referenced RFAs. To the extent JMI stated additional objections in its responses to the RFAs, the Court does not address those objections because JMI did not raise them in its opposition. (See Coy v. Super. Ct. (1962) 58 Cal.2d 210, 220-221 [if a timely motion to compel has been filed, the burden is on the responding party to justify an objection].)

Further, to the extent JMI raised new objections to the RFAs in its opposition, the Court does not address those objections since they have been waived. (See Scottsdale Ins. Co., supra, 59 Cal.App.4th at 272-274.)

For the stated reasons, JNA’s motion to compel further responses to its RFAs is GRANTED. No later than November 12, 2018, JMI 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. 1-7, 10-12, 15-25, 30-32, 38, 40, 42-49, and 57.

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, JMI: 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 JMI 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]ssuming the Court agrees that the associated [RFAs] pertain to relevant and controverted matters in dispute, [JMI] 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, JMI’s responses to JNA’s RFAs were insufficient. Therefore, JMI’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 RFAs Nos. 1-7, 10-12, 15-25, 30-32, 38, 40, 42-49, and 57 is GRANTED. No later than November 12, 2018, JMI shall serve further verified responses in accordance with the above and in compliance with Code of Civil Procedure sections 2030.210, et seq.

The Court notes JNA also moved to compel further responses to its FIs, No. 17.1, as related to RFAs Nos. 33, 34, and 50-54. If this was intentional, the motion is denied as to JMI’s response regarding these RFAs because JNA’s motion to compel further responses to RFAs did not concern these RFAs.

Request for Production, set two

JNA moves to compel further responses to its RFPs Nos. 8-15, which concern JMI’s claimed statutory, general, and special damages. For example, RFP No. 12 states, “Provide any and all documents evidencing Plaintiff JMI’s claim for future ‘compensatory damages.’ For the purpose of this Request, ‘compensatory damages’ is defined as used in California Civil Jury Instruction No. 350.” (JNA’s Notice of Lodgment ISO Mot. to Compel Further Responses to RFPs, Ex. A, at p. 4.)

JMI 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 JMI’s relevance objection is “completely without merit” since the subject RFPs “are limited to JMI’s claimed . . . damages . . . . Assuming JMI still wishes to pursue damages of any kind, these [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 JMI “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 [JMI] 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, [JMI] 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 JMI’s damages. “Once good cause was shown, the burden shifted to [JMI] to justify [its] objection[s].” (Kirkland v. Super. Ct. (2002) 95 Cal.App.4th 92, 98.) JMI has failed to do so here. Although JMI opposes the motion, its opposition does not specifically address JNA’s RFPs or its objections thereto.

For the stated reasons, JNA’s motion to compel further responses to RFPs 8-15 is GRANTED. No later than November 12, 2018, JMI shall serve further verified responses in accordance with the above and in compliance with Code of Civil Procedure sections 2031.210, et seq.

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 JMI 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.)