Mediaboost Ltd v. Hart		CASE NO. 114CV263099
DATE: 19 December 2014	TIME: 9:00	LINE NUMBER: 22

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 18 December 2014.  Please specify the issue to be contested when calling the Court and counsel.

On 19 December 2014, the motion of Defendant /Cross Complainant motion to compel Plaintiff to compel further responses to his request for production of documents, set one, and for monetary sanctions was argued and submitted.

Plaintiff did not file formal opposition to the motion.[1]

All parties are reminded that “[a] motion concerning interrogatories, inspection demands, or admission requests must identify the interrogatories, demands, or requests by set and number.”  Rule of Court 3.1345(d).  While the notice of the motion does identify the set number, the better practice is to include the same in the title of the notice of the motion.

1. Statement of Facts.

The complaint was filed on 1 April 2014.

In the complaint, Mediaboost alleges that Tal Hart (“Hart”) and Matas worked for Mediaboost, and throughout their employment, misappropriated Mediaboost’s assets and funds; and that Compile is the alter ego of Hart and Matas.  Mediaboost asserts causes of action for: (1) breach of duty of loyalty and constructive fraud (against Hart, Answering Defendants, defendant Telnet, and Does 1-20 [collectively, “Defendants”]); (2) breach of contract (against Hart); (3) breach of contract (against Matas); (4) breach of fiduciary duty (against Defendants); (5) conversion (against Defendants); (6) intentional misrepresentation (against Matas); (7) intentional misrepresentation (against Hart); and (8) unfair competition in violation of the UCL (against Defendants).

In the answer, Answering Defendants deny each allegation in the complaint, and assert the following affirmative defenses: (1) failure to state a claim for relief; (2) failure to mitigate damages; (3) statute of limitations; (4) waiver; (5) collateral estoppel/res judicata; (6) unclean hands; (7) laches; (8) conduct of others; (9) avoidable consequences; (10) privilege/justification; (11) failure to exhaust statutory requirements; (12) failure to exhaust administrative/contractual remedies; (13) excused performance; (14) failure/lack of consideration; (15) adequate remedy at law; (16) setoff and recoupment; (17) Fair Responsibility Act of 1986, Civil Code sections 1431-1431.5 (also known as Proposition 51); (18) standing; (19) failure to state a claim under the UCL; (20) not appropriate for treatment as representative action; (21) no malice; and (22) additional affirmative defenses.

The cross-complaint of Matas was filed on 30 April 2014.

In his cross-complaint,Latas alleges the following:  Pursuant to a written contract (“Employment Agreement”) approved by the board of Mediaboost’s parent company, nonparty Mediaboost, Ltd. (Israel) (“Parent Company”), Matas worked as Mediaboost’s CEO, and Mediaboost agreed to pay his salary, travel expenses, and—should it terminate him without “justifiable cause”—severance pay.  Parent Company decided to sell Mediaboost, and Mediaboost and Parent Company executed a contract (“Carveout Agreement”) whereby Matas and certain employees who continued to work for Mediaboost would receive a bonus if the acquisition or merger occurred during or within 6 months after their employment.  In November 2012, Trend and/or Burstein acquired Mediaboost, Mediaboost terminated Matas without justifiable cause on November 29, 2012, Burstein subsequently became Mediaboost’s CEO, and Mediaboost merged with Trend on February 6, 2013.  Cross-Defendants concealed the date of the merger/acquisition, and Burstein—on Mediaboost’s behalf—threatened to take adverse action against Matas if he refused to release Mediaboost from the Carveout Agreement, and ultimately took such adverse actionMediaboost failed to pay Matas his bonus, severance pay, and travel expenses, and failed to immediately pay him for his unused paid leave

1. Discovery Dispute.

On 12 August 2014, Defendant/Cross Complainant served his request for production of documents.  Plaintiff /Cross Defendant timely responded but the propounding party deemed responses to be inadequate.

This motion was filed on 18 November 2014.

III.     Analysis.

1. “Meet and Confer.”

The declaration of Greg Groeneveld alleges that on the October 2014, he attempted to “meet and confer” with counsel for Plaintiff/Cross Defendant by sending a letter dated in October 2014 which included the 92 page Separate Statement which is appended to the current motion.  Plaintiff’s counsel responded with “Yes, let’s discuss the responses and protective order we’d like.”  (Moving papers, declaration of Greg Groeneveld, Exhibit E.) Defense counsel wrote back in a letter dated 23 October 2014 said he would wait an additional week for follow-up before filing the motion to compel further responses. (Moving papers, declaration of Greg Groeneveld, Exhibit F.)

In the meet and confer, both sides disgusts the creation of a protective order concerning the documents that were to be produced.  While Defense counsel solicited an explanation for the need for a protective order, none was forthcoming from Plaintiff.

1. Motion to Compel Further Responses.

A party propounding a request for production of documents may move for an order compelling further responses if it deems that an objection in the response is without merit. (Code Civ. Proc., § 2031.310, subd. (a).) A motion for an order compelling further responses to the request for production of documents “shall set forth specific facts showing good cause justifying the discovery sought by the inspection demand.” (Code Civ. Proc., § 2031.310, subd. (b)(1).)

On a motion to compel further responses to requests for production of documents, it is the moving party’s burden to demonstrate good cause for the discovery sought.  This requires showing: (1) relevance to the subject matter and (2) specific facts justifying discovery.  (Kirkland v. Sup. Ct. (2002) 95 Cal. App. 4th 92, 98.  Glenfed Develop. Corp. v. Superior Court (1997) 53 Cal.App.4th 1113, 1117.)  Once a showing of good cause is made, the burden shifts to the opposing party to justify his or her objections. (See Kirkland v. Superior Court (2002) 95 Cal. App. 4th 92, 98.)

If Plaintiff felt that a protective order was needed, it should have carried the laboring war in accomplishing the task.

This Court has reviewed the Separate Statement in support of the motion.  There is no evidence to contradict anything stated in the declaration of defense counsel or in the Separate Statement.[2]

The motion of Defendant /Cross Complainant Matas to compel Plaintiff/Cross defendant Mediaboost Ltd. to compel further responses to his request for production of documents, set one, is GRANTED.  Plaintiff/Cross Defendant is to provide further responses to the request for production within 20 days of the filing of this Order.

Responding party/Plaintiff may assert any privilege that was otherwise timely asserted but Plaintiff must provide a privilege log in support of all claims of privilege.

The parties are to meet and confer on an appropriate protective order.

1. Monetary Sanctions.

Defendant/Cross complainant makes a request for monetary sanctions.  The request is not code compliant.

A court’s authority to award monetary sanctions arises from statutory authority, and not from the court’s own inherent authority. Trans-Action Commercial Investors, Ltd. v. Firmaterr (Jelinek) (1st Dist. 1997) 60 Cal.App.4th 352, 366. This authority is restricted because the Legislature has seen fit to establish such limitations. Jelinek, 60 Cal.App.4th at 371. See also Bauguess v. Paine (1978) 22 Cal.3d 626, 638-39.  It is the responsibility of the moving party to provide authority for any proposition, including sanctions. See Quantum Cooking Concepts, Inc. v. LV Assoc., Inc. (2d Dist. 2011) 197 Cal.App.4th 927, 934.

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.”

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.

Section 2023.030 authorizes a court to impose the specified types of sanctions, “[t]o the extent authorized by the chapter governing any particular discovery method or any other provision of this title.” This means that the statutes governing the particular discovery methods limit the permissible sanctions to those sanctions provided under the applicable governing statutes.”  New Albertsons, Inc. v. Superior Court (Shanahan) (2d Dist. 2008) 168 Cal.App.4th 1403, 1422.  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. The party must cite to the statutory authority that awards sanctions for a particular discovery method (e.g., Cal. Code Civ. Proc. 2030.290, 2031.310, etc.). See Quantum Cooking Concepts, Inc. v. LV Assoc., Inc. (2d Dist. 2011) 197 Cal.App.4th 927, 934.

Code of Civil Procedure, § 2031.310(c) and 2031.320(b) apply only when the party against whom the sanctions are sought “unsuccessfully makes or opposes” a discovery motion.  Here, Plaintiff did not file opposition and therefore sanctions are inappropriate under these sections.  Since no opposition was filed, the correct citation of authority would have been Rule of Court 3.1348(a) which states: “The court may award sanctions under the Discovery Act in favor of a party who files a motion to compel discovery, even though no opposition to the motion was filed, or opposition to the motion was withdrawn, or the requested discovery was provided to the moving party after the motion was filed.”

The request for monetary sanctions is DENIED.

 

 

 

 

 

 

 

1. Order.

The motion of Defendant /Cross Complainant Matas to compel Plaintiff/Cross defendant Mediaboost Ltd. to compel further responses to his request for production of documents, set one, is GRANTED.  Plaintiff/Cross Defendant is to provide further responses to the request for production within 20 days of the filing of this Order.

Responding party/Plaintiff may assert any privilege that was otherwise timely asserted but Plaintiff must provide a privilege log in support of all claims of privilege.

The parties are to meet and confer on an appropriate protective order.

The request for monetary sanctions is DENIED.

 

 

________________­­­____________ 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] (See Ghanooni v. Super Shuttle (1993) 20 Cal. App. 4th 256, 262 (“However, she produced no counterdeclaration supporting this argument. Therefore, the court’s finding as to reasonable expenses is supported by the uncontradicted evidence.”)