Case Name: Mike Payne & Associates, Inc. v. The Namm Group d/b/a Artistic Aggregate Services, et al.

Case No.: 17CV315190

The Namm Group d/b/a Artistic Aggregate Services’ and Rudolph & Sletten, Inc.’s Motion for a Protective Order

Factual and Procedural Background

Plaintiff Mike Payne & Associates, Inc. (“MPA”) specializes in terrazzo and stone installation, and is an industry leader in ceramic and mosaic tile related work and materials, including polished concrete floors, cementitious overlays, corrective grinding and epoxy flooring for commercial, retail, governmental, and residential facilities. (First Amended Complaint (“FAC”), ¶1.)

In connection with the construction of defendant Apple Inc.’s (“Apple”) new 175 acre signature campus and headquarters known as Apple Park (“Project”), Apple entered into a written prime contract with defendant Rudolph & Sletten, Inc. (“Rudolph”) in or around June 10, 2015 to act as general or prime contractor for the construction of all or a portion of the Project. (FAC, ¶11.)

Rudolph entered into a written subcontract with defendant The Namm Group d/b/a Artistic Aggregate Services (“Aggregate”) on or about June 22, 2015 pursuant to which Aggregate agreed, among other things, to furnish and install all necessary work for the main staircases terrazzo for the Project. (FAC, ¶12.)

In 2015 and through 2016, defendant Harvey Namm (“Namm”) and Shelly Katz (“Katz”), Aggregate’s then Executive Manager, on behalf of Aggregate contacted and solicited MPA’s assistance to act as subcontractor for Aggregate, including installation of precast terrazzo staircases, precast tread and riser combinations, base board, and stringers, and installation of the poured in place landings, for the Project. (FAC, ¶13.) Namm and Katz made various representations to James Michael Payne, COO of MPA. (Id.)

In reliance on those representations, MPA agreed to act as subcontractor to Aggregate and Namm for the installation of the precast terrazzo staircases and certain related work for the Project pursuant to a written subcontract dated April 28, 2016 (“Subcontract”). (FAC, ¶14 and Exh. A.)

Aggregate and Namm did not perform in accordance with their written and verbal promises, representations, and agreements. (FAC, ¶15.) The Project was delayed multiple times by the actions and omissions of defendants Apple, Rudolph, Aggregate, and Namm. (Id.) To address the delays, MPA requested Aggregate and Namm amend the Subcontract to increase the price from $2,390,000 to $3,526,900, but Aggregate and Namm never responded to MPA’s requests as required by the Subcontract. (Id.) Instead, Aggregate and Namm tried to cover up their own delays and blamed MPA for their and Rudolph’s errors, omissions, and lack of performance. (Id.)

Aggregate and Namm failed to furnish proper precast parts to MPA for installation as required by the Subcontract causing delays on site and additional work not contemplated under the Subcontract. (FAC, ¶¶16 and 20.) Aggregate and Namm improperly modified approved shop drawings which substantially increased the cost and impacted MPA’s work without furnishing MPA change orders for additional compensation. (FAC, ¶17.) Aggregate and Namm failed to properly coordinate the work and made unwarranted requests that MPA add additional staff at the Project. (FAC, ¶18.) Aggregate and Namm improperly requested MPA perform coordination and communication functions beyond the scope of the Subcontract. (FAC, ¶19.)

Despite challenges caused by Aggregate and Namm, MPA faithfully performed its work and obligations at the Project in accordance with the Subcontract. (FAC, ¶21.) MPA remained ready, willing, and able to complete its obligations under the Subcontract but by letter dated November 28, 2016, Aggregate and Namm purported to terminate the Subcontract. (Id.) Aggregate and Namm blamed MPA for delays and defective work rather than accept responsibility for their own failures. (Id.) Aggregate and Namm have failed to pay MPA for work, labor, and materials furnished to the Project or for delays and extra work performed. (Id.)

On August 18, 2017, MPA filed a complaint against Aggregate, Namm, Rudolph, and Apple asserting various causes of action.

On October 12, 2017, MPA filed a FAC adding defendant Capitol Indemnity Corporation (“Capitol”) and now asserting the following causes of action:

(1) Breach of Subcontract
(2) Recovery Against the Mechanic’s Lien Release Bonds
(3) Breach of California Prompt Payment Statutes
(4) Fraud
(5) Negligent Misrepresentation
(6) Quantum Meruit
(7) Account Stated
(8) Breach of the Covenant of Good Faith and Fair Dealing
(9) Violation of California’s Unfair Business Practices Act, Business and Professions Code Section 17200 et seq.
(10) Declaratory Relief

On November 28, 2017, defendants Aggregate and Namm filed a demurrer to the eighth cause of action of MPA’s FAC. On February 13, 2018, the court issued an order overruling the demurrer.

On March 1, 2018, defendants Aggregate, Namm, Rudolph, and Capitol filed a joint answer to MPA’s FAC. Also on that date, Aggregate filed a cross-complaint against MPA.

On March 9, 2018, Aggregate filed a first amended cross-complaint (“FAXC”) against MPA asserting causes of action for:

(1) Breach of Contract
(2) Breach of Implied Covenant of Good Faith and Fair Dealing
(3) Express Indemnity
(4) Breach of Implied Warranty
(5) Breach of Express Warranty
(6) Declaratory Relief

On April 13, 2018, MPA filed an answer to Aggregate’s FAXC.

Discovery Dispute

On or about January 31, 2019, MPA served Aggregate with a First Set of Request for Admissions (“RFA”) numbered 1 – 260, First Set of Special Interrogatories (“SI”) numbered 1 – 249, and Form Interrogatories (“FI”), set two, number 17.1. In conjunction with the RFA and SI to Aggregate, MPA served declarations for additional discovery.

On or about February 8, 2019, MPA served Rudolph with a First Set of RFA numbered 1 – 233, First Set of SI, numbered 1 – 287, and FI, set two, number 17.1. In conjunction with the RFA and SI to Rudolph, MPA served declarations for additional discovery.

Defendants Aggregate and Rudolph’s counsel deemed the above discovery to be cumulative, duplicative, and overbroad and, between February 15, 2019 and April 9, 2019, met and conferred with MPA’s counsel. MPA’s counsel informed defendants Aggregate and Rudolph’s counsel that he would not withdraw any of MPA’s discovery requests.

On May 8, 2019, defendants Aggregate and Rudolph filed the instant motion for protective order.

Discussion

III. Defendants Aggregate and Rudolph’s motion for protective order is DENIED.

(a) When interrogatories have been propounded, the responding party, and any other party or affected natural person or organization may promptly move for a protective order. This motion shall be accompanied by a meet and confer declaration under Section 2016.040.
(b) The court, for good cause shown, may make any order that justice requires to protect any party or other natural person or organization from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense. This protective order may include, but is not limited to, one or more of the following directions:
(1) That the set of interrogatories, or particular interrogatories in the set, need not be answered.
(2) That, contrary to the representations made in a declaration submitted under Section 2030.050, the number of specially prepared interrogatories is unwarranted.

(Code Civ. Proc., § 2030.090.)

“If the responding party seeks a protective order on the ground that the number of specially prepared interrogatories is unwarranted, the propounding party shall have the burden of justifying the number of these interrogatories.” (Code Civ. Proc., § 2030.040, subd. (b).)

(a) When requests for admission have been made, the responding party may promptly move for a protective order. This motion shall be accompanied by a meet and confer declaration under Section 2016.040.
(b) The court, for good cause shown, may make any order that justice requires to protect any party from unwarranted annoyance, embarrassment, oppression, or undue burden and expense. This protective order may include, but is not limited to, one or more of the following directions:
(1) That the set of admission requests, or particular requests in the set, need not be answered at all.
(2) That, contrary to the representations made in a declaration submitted under Section 2033.050, the number of admission requests is unwarranted.

(Code Civ. Proc., § 2033.080.)

“If the responding party seeks a protective order on the ground that the number of requests for admission is unwarranted, the propounding party shall have the burden of justifying the number of requests for admission.” (Code Civ. Proc., § 2033.040, subd. (b).)

“The court shall restrict the frequency or extent of use of a discovery method provided in Section 2019.010 if it determines either of the following: (1) The discovery sought is unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive. (2) The selected method of discovery is unduly burdensome or expensive, taking into account the needs of the case, the amount in controversy, and the importance of the issues at stake in the litigation.” (Code Civ. Proc., §2019.030, subd. (a).)

In moving for a protective order, defendants contend MPA has not adequately demonstrated that the number of interrogatories and RFAs are warranted beyond the statutory 35 despite the declaration from MPA’s counsel. MPA’s stated reason for requesting more than the statutory limit of 35 interrogatories and RFA is “because of the complexity and quantity of factual and legal issues in the instant lawsuit warrant this number of [interrogatories and requests for admission.] In addition, MPA’s First Amended Complaint in this action contains ten (10) causes of action against [Aggregate] and the other Defendants and [Aggregate’s] First Amended Cross-Complaint contains seven cross-claims against MPA that raise numerous complex factual and legal issues that need to be explored.”

Defendants argue further that a number of interrogatories and RFA appear to be duplicative and/or cumulative in that they seek similar information. Without going through each and every interrogatory and RFA, defendants set forth a number of examples. For instance, SI number 1 to Rudolph asks, “Does [Rudolph] contend that AGGREGATE … was properly licensed as a subcontractor in California at all material times that it furnished labor and materials to the PROJECT … ?” while RFA number 33 asks Rudolph to “Admit or deny that AGGREGATE was not properly licensed as a contractor in California at all relevant times that it performed work and/or furnished materials to the PROJECT.”

Defendants contend some of the discovery being sought is overbroad as to be unduly burdensome. For instance, SI number 71 to Rudolph asks, “IDENTIFY each term and condition of any general contract or other agreement by and between [Rudolph] and Apple relating to the PROJECT.” Rudolph and Apple’s prime contract for the Project is more than 2000 pages long because it consists of the prime contract agreement and all of the Project’s change orders to that contract, voluminous plans and specifications, as well as numerous other ancillary documents. A response would require Rudolph to transcribe the entire prime contract. Defendants’ position is that the terms of the agreement are obtainable from some other source that is more convenient, less burdensome, or less expensive, i.e., a request to produce the prime contract.

Defendants’ counsel estimates it would take in excess of 250 hours to respond to the above discovery based on an assumption that it would take at least five minutes to review each request, draft a response, discuss the response with the client, and make necessary revisions. Employees from each of the defendant companies will also have to spend a similar amount of time to review each discovery response and to participate in the review, analysis, and drafting of responses.

“The objecting party must supply evidence to support its claim of undue or excessive burden, showing the quantum of work required. Absent such evidence, the trial court has nothing ‘upon which to base a comparative judgment that any responsive burden would be undue or excessive, relative to the likelihood of admissible evidence being discovered.’” (Weil & Brown et al., CAL. PRAC. GUIDE: CIV. PRO. BEFORE TRIAL (The Rutter Group 2019) ¶8:1008.1, p. 8F-28 citing Williams v. Superior Court (2017) 3 Cal.5th 531, 549 – 550.)

In opposition, MPA contends the discovery is warranted when viewed in light of the ten claims and six cross-claims being asserted. MPA also notes that the FAC consists of 89 factual allegations and seeks in excess of $208,367 and the FAXC consists of over 65 factual allegations and seeks in excess of $1 million against MPA. Furthermore, defendants have asserted 35 affirmative defenses in answering MPA’s FAC. The court has reviewed the FAC and the FAXC and the discovery at issue appear to largely consist of proper contention interrogatories which track the allegations. The court finds the number of interrogatories and RFA warranted.

While there will certainly be a burden associated with responding to the discovery at issue, the court does not find the burden to be undue in light of the issues involved. A “discovery burden is ‘undue’ only if the inconvenience and expense of responding clearly outweigh the benefits likely to be obtained in the interrogatories are answered.” (Weil & Brown et al., CAL. PRAC. GUIDE: CIV. PRO. BEFORE TRIAL (The Rutter Group 2019) ¶8:1008.1, p. 8F-28.) Defendants have not adequately demonstrated that the discovery being sought is obtainable from some other source that is more convenient, less burdensome, or less expensive.

The relief being sought by defendants is a protective order which states that defendants need not respond at all to the discovery at issue. Such relief is not warranted. While the discovery being sought may be duplicative or cumulative, it is not unreasonably so. To the extent defendants find some of the discovery objectionable, defendants can assert any objection(s) they deem appropriate and necessary in response. However, a protective order excusing defendants from responding altogether is not justified.

Accordingly, defendants Aggregate and Rudolph’s motion for a protective order is DENIED. Defendants Aggregate and Rudolph’s request for monetary sanctions is DENEID.

In opposition, MPA requests monetary sanctions of $9,416.60 against defendants Aggregate and Rudolph and their counsel. “The court shall impose a monetary sanction … against any party, person, or attorney who unsuccessfully makes or opposes a motion for a protective order, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.” MPA’s counsel declares he and another attorney who is of counsel to his firm spent 21 and 3 hours, respectively, at the respective rates of $350 and $300 per hour in preparing the opposition to defendants’ motion. (See ¶25 to the Declaration of Eliot L. Teitelbaum in Support, etc.) MPA’s counsel paid $116.60 for airfare in anticipation of attending the hearing. MPA’s counsel anticipates an additional three hours to prepare for and attend the hearing of this motion. The court awards sanctions only for expenses actually incurred, not for anticipated expenses. (See Tucker v. Pacific Bell Mobile Services (2010) 186 Cal.App.4th 1548, 1551.) Some amount of monetary sanctions is warranted. Accordingly, MPA’s request for monetary sanction is GRANTED, in part. Defendants Aggregate and Rudolph shall pay $1700.00 to MPA within 30 calendar days from notice of entry of this order.

As this is not a motion to compel responses and since the court is not aware of what, if any, extension agreement(s) may be in place between the parties, the court will not set a deadline for defendants to provide responses to the above discovery. The court will merely advise defendants to act in accordance with the Code of Civil Procedure.