Case Number: EC060738    Hearing Date: July 18, 2014    Dept: NCD

TENTATIVE RULING (7-18-14)
#9
EC 060738
OMS GLOBAL v. ONEWEST BANK

Defendant Meridian Foreclosure Service’s Second Motion for Order Compelling Further Responses to First Set of Special Interrogatories
Defendant Meridian Foreclosure Service’s Second Motion for Order Compelling Further Responses to First Request for Production of Documents

TENTATIVE:
Defendant Meridian Foreclosure Service’s Second Motion for Order Compelling Further Responses to First Set of Special Interrogatories is DENIED as to Special Interrogatory No. 16. Motion is otherwise GRANTED. Further complete responses to the remaining interrogatories are to be served within ten days. Objections are overruled. Contention interrogatories which refer to contentions made by plaintiff are not objectionable or vague as to plaintiff, which is itself asserting the contentions. Plaintiff is also obligated to make inquiry concerning the Trust. As to Interrogatories Nos. 2 and 5, the documents which are responsive to the interrogatories must be identified.

Monetary sanctions are GRANTED. Monetary sanctions in the amount of $ 1,475 [$3,070 requested] are awarded against plaintiff OMS Global, LLC, and its attorney of record, jointly and severally, payable within 30 days.

Defendant Meridian Foreclosure Service’s Second Motion for Order Compelling Further Responses to First Request for Production of Documents is GRANTED. Further responses are to be served within ten days. Responses must fully comply with CCP §§ 2913.210, 2031.220 and 2031.230, that is, any statement of compliance or inability to comply must include the statutorily required statements and affirmations.

Monetary sanctions are GRANTED. Monetary sanctions in the amount of $ 1,475 [$3,245 requested] are awarded against plaintiff OMS Global, LLC, and its attorney of record, jointly and severally, payable within 30 days.

BACKGROUND:
FACTUAL AND PROCEDURAL BACKGROUND:
Plaintiff OMS Global, LLC alleges that it was the named beneficiary in a Junior Deed of Trust on property in Los Angeles under its former name, Ramsfire Global, LLC. The Deed of trust was recorded on May 6, 2010. Plaintiff alleges that on December 4, 2012, defendant Meridian Foreclosure Service, on behalf of defendant Onewest Bank, the beneficiary of a Senior Deed of Trust on the subject property, recorded a Notice of Default, and on March 7, 2013 recorded a Notice of Trustee’s Sale stating a sale date of March 28, 2013. The Notice stated that to learn whether the sale date had been postponed to call a stated telephone number or visit an identified internet website. On March 26, 2013, plaintiff checked the website and saw that the sale had been postponed to May 28, 2013. On May 14, 2013, plaintiff again checked the website to be sure the sale had not been postponed again and learned that the trustee’s sale had occurred and the subject property had been sold to defendant GB Inland. Plaintiff alleges that it was interested in bidding on the subject property to protect its junior lien and to acquire the property for use by one of its officers, and had it been given the opportunity plaintiff would have bid more than the winning bid for the property. Plaintiff alleges that defendants Onewest, Meridian, and GB Inland had an agreement to restrain bidding on the subject property by posting that the trustee’s sale was being postponed and then holding the trustee’s sale as originally scheduled in order to keep potential bidders away and permit defendant GB Inland to acquire the subject property.

Similar motions to compel plaintiff to provide further responses to discovery were brought by moving defendant as to these two sets of discovery and were heard by the court on May 2, 2014. The motions were deemed moot in light of representations in the opposition that plaintiff would be voluntarily providing further responses prior to the hearing. Monetary sanctions sought by moving defendant were denied, the court order stating:
“Monetary sanctions are DENIED. However, the court again reminds plaintiff OMS Global that the Court would not expect to countenance from plaintiff OMS Global, LLC any further inadequate discovery responses of the type evident on this occasion and at the hearing of April 11, 2014.”

ANALYSIS:
Interrogatories
Under CCP sec. 2017.010, “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.” The section specifically provides that “discovery may relate to the claim or defense of the party seeking discovery or of any other party,” and that discovery may be obtained “of the identity and location of persons having knowledge of any discoverable matter, as well as of the existence, description, nature, custody, condition and location of any…tangible thing.”

CCP sec. 2030.300(a) provides that if the party propounding interrogatories deems that an objection is without merit or too general or that “an answer to a particular interrogatory is evasive or incomplete”, “the propounding party may move for an order compelling a further response…”

If a timely motion to compel has been filed, the burden is on the responding party to justify any objection or failure to fully respond to discovery. Coy v. Superior Court (1962) 58 Cal.2d 210, 220-221. The granting or denial of a motion to compel is in the discretion of the trial court. Id. A court should generally consider the following factors:

The relationship of the information sought to the issues framed in the pleadings;
The likelihood that disclosure will be of practical benefit to the party seeking discovery;
The burden or expense likely to be encountered by the responding party in furnishing the information sought.
Columbia Broadcast System, Inc. v. Superior Court (1968) 263 Cal.App.2d 12, 19.

Special Interrogatories Nos. 2, 5
These interrogatories request the identification of documents supporting plaintiff’s contention that defendant engaged in bill chilling, and had an agreement to post the trustee’s sale as postponed to keep potential bidders away. The supplemental response is “All DOCUMENTS produced in connection with Propounding Party’s Request for Production”, and previous documents produced.

This does not appropriately identify responsive documents.

The opposition argues that these responses properly invoke CCP § 2030.230, which provides:
“If the answer to an interrogatory would necessitate the preparation or the making of a compilation, abstract, audit, or summary of or from the documents of the party to whom the interrogatory is directed, and if the burden or expense of preparing or making it would be substantially the same for the party propounding the interrogatory as for the responding party, it is a sufficient answer to that interrogatory to refer to this section and to specify the writings from which the answer may be derived or ascertained. This specification shall be in sufficient detail to permit the propounding party to locate and to identify, as readily as the responding party can, the documents from which the answer may be ascertained. The responding party shall then afford to the propounding party a reasonable opportunity to examine, audit, or inspect these documents and to make copies, compilations, abstracts, or summaries of them.”

In invoking this section, it is not clear how answering these interrogatories would require a summary of records, and it is not clear that all records from which answers can be determined have been specified. Further responses which provide the information requested are hereby ordered to be provided.

Special Interrogatory No. 16
This interrogatory asks for all facts that support plaintiff’s contention that it would have bid more for the property had it been given the opportunity to attend the sale.

The response is “Responding Party was willing to bid more than the winning bid.”

The motion argues that in order to state a claim for bid chilling, plaintiff must establish it was ready, willing and able to bid more for the property than the winning bid, and that defendant is entitled to facts supporting plaintiff’s assertion, including that it could have bid more than the winning bid.

The disputed interrogatory does not clearly seek “ready, willing, and able” information. The response appears to respond to the question as posed and the motion for a further response is denied.

Special Interrogatory No. 19
This interrogatory requests the last known address and telephone number for each of the beneficiaries of the 12345 Hartsook Trust. The Response is “Responding Party has no information about the beneficiaries of the 12345 Hartsook Trust.”

Plaintiff here is contending that the trustor of its lien is this entity, and it has provided the trust agreement. It seems highly unlikely that plaintiff knows nothing about this Trust and its composition.

Under CCP section 2030.210(a), the response shall be separate as to each interrogatory and must contain the information sought to be discovered. Under CCP section 2030.220(a), “each answer in a response shall be as complete and straightforward as the information reasonably available to the responding party permits.” Subdivision (b) provides, “if an interrogatory cannot be answered completely, it shall be answered to the extent possible.” Under subdivision (c), where a party does not have personal knowledge sufficient to answer a question, the party “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.”

A further response which reflects inquiry of other persons or organizations shall provided.

Special Interrogatory No. 22
This interrogatory requests the identification of all documents that support plaintiff’s contention regarding the fair market value of the property on March 28, 2013. The response is “Online estimations of fair market value at the time. Copies of such estimations were not made but likely still exist in archives of the online sources.”

This does not identify the documents at issue—defendant is entitled to know the source of these referenced “online estimations” and their dates. A further response shall provided.

Special Interrogatories Nos. 26, 27, 33
These interrogatories request facts and documents supporting plaintiff’s alleged damages, and a description of each item of damage plaintiff claims to have suffered.

The responses are that plaintiff had a $200,000 junior lien which was extinguished, reference to the deed of trust, and the response, “Loss of $200,000 lien. Loss of use of property by Jamie Matsuba. All occurred as of trustee’s sale date.”

These responses are evasive or at best are not complete, and as pointed out by defendant, the loss of lien only becomes damages if the property was sold for less than it was worth, or if defendant’s bid on the property would have been sufficient to preserve the lien without other encumbrances. It is unclear how plaintiff intends to recover damages without revealing in discovery with some amount of specificity what the damages are. Further complete responses shall be provided.

Document Demands:
CCP sec. 2031.310 provides that a party demanding a document inspection may move for an order compelling further responses to the demand if the demanding party deems that
“(3) An objection to the response is without merit or too general.”

Under CCP Section 2031.310 (b)(1), “the motion shall set forth specific facts showing good cause justifying the discovery sought by the inspection demand.”

The burden is on the moving party to show both relevance to the subject matter and specific facts justifying discovery. Glenfed Develop. Corp. v. Superior Court (1997) 53 Cal.App.4th 1113, 1117. Once good cause is established by the moving party, the burden then shifts to the responding party to justify any objections made to document disclosure. See Hartbrodt v. Burke (1996) 42 Cal.App.4th 168.

Demands Nos. 1-3, 6, 23, 24, 25, 26, 27, 29, 31, 33, 43
These seek documents concerning the fair market value of the property, the 12345 Hartsook Trust, and documents concerning plaintiff’s claims it was qualified to bid at the trustee’s sale, and qualified to bid in excess of the bid price. Documents are also sought concerning the operating agreements of OMS and assignments of the deed of trust. The responses are basically that responding party does not have any documents within its possession, custody, or control, and that it never sought to measure the fair market value, was not the trustee of the trust, and does not have any documents concerning its qualifications.

Under CCP section 2031.210, a response shall either be a statement of compliance, a representation that the party lacks the ability to comply, or an objection.

With respect to a statement of compliance, CCP section 2031.220 requires:
“A statement that a party to whom an inspection demand has been directed will comply with the particular demand shall state that the production, inspection, and related activity demanded will be allowed either in whole or in part, and that all documents or things in the demanded category that are in the possession, custody, or control of that party and to which no objection is being make will be included in the production.”

With respect to a statement of inability to comply, CCP section 2031.230 requires:
“A representation of inability to comply with the particular demand for inspection shall affirm that a diligent search and a reasonably inquiry has been made in an effort to comply with that demand. This statement shall also specify whether the inability to comply is because the particular item or category has never existed, has been destroyed, has been lost, misplaced, or stolen, or has never been , or is no longer, in the possession, custody, or control of the responding party. The statement shall set forth the name and address of any natural person or organization known or believed by that party to have possession, custody, or control of that item or category of item.”

To the extent the responses are intended to be statements of inability to comply, the responses fail to comply with section 2031.230. The opposition concedes as much but argues that the responses are close enough, and the remaining information can be implied, and that such responses are not sanctionable. Without an appropriate statement to govern what can be admitted at trial if documents later materialize, these responses are of little or no value. This seems particularly true in connection with the statements in the opposition that plaintiff will not seek to prove its qualification to bid through documents, but only through testimony. Plaintiff barring unforeseen circumstances shall be limited to that posture formally. Further responses which comply with the code shall be provided.

Demands Nos. 4, 5, 7, 11,12, 17, 19, 20, 22, 48
These request documents reflecting the loan secured by the deed of trust, and its transfer, as well as documents supporting various contentions, including all claims for damages.

The responses are “Responding Party is producing such DOCUMENTS herewith,” or “Responding Party produces herewith such DOCUMENTS within its possession, custody or control.”

Again, the statement does not comply with the code in connection with a statement of compliance, so it is not clear that all documents have been produced. Further complete responses shall be provided.

In addition, the documents, under CCP section 2031.280(a), shall either be produced as they are kept in the usual course of business, or be organized and labeled to correspond with the categories in the demand.

Sanctions
The burden is on the party subject to sanctions to show substantial justification or injustice. Mattco Forge, Inc. v. Arthur Young & Co. (1990) 223 Cal.App.3d 1429.

As noted above, the court’s previous order in connection with motions concerning this discovery stated:
“Monetary sanctions are DENIED. However, the court again reminds plaintiff OMS Global that the Court would not expect to countenance from plaintiff OMS Global, LLC any further inadequate discovery responses of the type evident on this occasion and at the hearing of April 11, 2014.”

Here, OMS Global has again provided inadequate discovery responses, and sanctions – – in amounts somewhat less than those amounts sought – – are warranted.