Lawzilla Additional Information:
Per the Los Angeles court records plaintiff is represented by attorney Anna Rozman of the M.E.T.A.L. Law Group who is responsible for the representation of the client being sanctioned by the court.
Case Number: BC631598 Hearing Date: April 09, 2018 Dept: 58
Hearing Date: April 9, 2018
Calendar No: 6
Case Name: Versa Products v. Stitch Industries, Inc., et al.
Case No.: BC631598
Motion: Motion to Compel
Moving Party: Defendant Joshua Stellin
Responding Party: Plaintiff Versa Products
Tentative Ruling: The Court awards sanctions as set forth herein.
On August 25, 2016, Plaintiff Versa Products filed this action against Defendants Stitch Industries, Inc. dba Joybird Furniture, Christopher Stormer, Joshua Stellin, Alejandro Andres Del Toro aka Alex Del Toro, and Andres Hinostroza arising out of the individual Defendants’ use of Plaintiff’s resources and trade secrets to create a competing furniture business, Stitch Industries. Plaintiff asserts causes of action for (1) declaratory relief, (2) breach of employment agreement, (3) breach of confidentiality agreement, (4) breach of duty of loyalty, (5) breach of fiduciary duty, (6) tortious interference with economic advantage, and (7) violation of Bus. & Prof. Code § 17200.
Defendant Stellin brings a Motion to Compel Further Responses to his Special Interrogatories, Set One, propounded on Plaintiff. Defendant argues that Plaintiff’s responses consist of objections without merit.
Plaintiff argues the Motion is moot because it served adequate, supplemental responses on March 22, 2018. Furthermore, Plaintiff argues that no sanctions should be awarded because Defendant failed to properly meet and confer.
Defendant does not dispute that Plaintiff served adequate, supplemental responses; however, Defendant continues to seek sanctions because Plaintiff provided supplemental responses only after the Motion was filed.
The Court has reviewed the papers and finds that Defendant adequately met and conferred regarding the subject discovery on December 15, 2017, by sending Plaintiff’s counsel a thirteen page meet and confer letter. The Court finds that this meet and confer letter will suffice under the circumstances.
Although Plaintiff served supplemental responses, the Court may still award sanctions. (See Cal. Rules of Court, rule 3.1348.) Because Plaintiff filed supplemental responses only after Defendant incurred costs associated with the current Motion, the Court will award sanctions but in a reduced amount, on this particular motion under the circumstances here, as an exercise of the Court’s discretion and in the interests of justice. The Court finds that there has been substantial compliance albeit untimely, and therefore a mitigated sanctions award is appropriate. Sanctions are awarded as against plaintiff in the amount of $1825, to be paid within 30 days following entry of this Order.
The Court is eager to assist counsel in proper and appropriate ways in preparing this case for disposition or trial. Progress has been made (from the days when some 20 discovery motions were pending) but the Court senses that this matter will only resolve in a mediation setting. The Court looks forward to hearing about the follow-up that is hopefully taking place following a first session of mediation.
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Versa Products / Thrive Home Furnishings Sues Stitch Industries / Joybird Furniture
Versa claims that former employees, Christopher Stormer, Joshua Stellin, Andres Hinostroza, and Alejandro Andres Del Toro (also known as Alex Del Toro) violated their employment contracts by stealing Thrive Furnitures’s resources and furniture designs to create a competing company, Joybird Furniture
(Los Angeles, April 24, 2018) — Versa Products / Thrive Home Furnishings has filed a suit claiming that four former employees breached their fiduciary duties, as well as their duties of loyalty and confidentiality, to create a competitor, Stitch Industries and Joybird Furniture. According to Thrives’s complaint, beginning in 2012 those employees began to steal from their employer, a manufacturer of high-quality furniture for corporate, private, and public-sector clients. The employees are alleged to have used Thrive’s money, trade secrets, computer system, and customer data to create Stitch. The employees – Christopher Stormer, Joshua Stellin, Andres Hinostroza, and Alejandro Andres Del Toro (also known as Alex Del Toro), are claimed to have begun to work for their own company while still employed by Thrive, which they did not leave until the end of 2013. (Stitch was incorporated in Delaware in December 2013.) These four employees allegedly used Thrive’s money and their own hours as Thrives’s employees to develop a website, a logo, and a promotional video that they later used for their competing business. The website alone cost Thrive more than $90,000. In another example of the former employees’ injurious conduct, Thrive estimates that from January to May of 2014, they cost it $16.5 million in lost sales.
The furniture business is highly competitive, which makes a company’s information about designs and fabrics very valuable. Thrive indicates in its suit that the former employees stole design information for 20 types of sofas, 47 types of chairs, 28 types of tables and desks, 19 designs of credenzas and other furniture for storage, 5 types of beds to start Joybird Furniture. To accomplish this, Thrive alleges that the defendants misappropriated Thrive’s database of computer design files, engineering schematics, frame designs, and fabric designs. Stitch allegedly began making identical pieces of furniture shortly before or soon after Stormer, Stellin, Hinostroza, and Del Toro left Thrive. In particular, Thrive’s complaint outlines how it spends many man-hours developing its furniture designs by use of a shared computer network and computer-aided design (CAD) system. Using this system, the company’s designers create initial designs, which are then developed into actual pieces of furniture. Using a computer network that can be accessed by mobile devices, employees may comment on the initial designs, leading to revisions. Further work in preparation of a final product includes frame design and such final touches as selection of hardware and fabrics. Fabric designs and patterns are especially valuable because well-designed fabric patterns waste a minimum of fabric. Completed designs, in turn, are turned into engineering schematics and computer files that are to be used in the automated construction of the furniture. According to Thrive, Stormer, Stellin, Hinostroza, and Del Toro unfairly benefitted from a conservatively estimated 23,800 man-hours of design and development by appropriating an estimated 80 percent of Thrive’s computerized designs and fabric patterns for use on Joybird Furniture furnishing offerings.
After the independent designer of the Joybird website (which the defendants ostensibly were creating for their employer) alerted Thrive, it began to monitor the employees’ activities at work. These allegedly included the development of the Joybird website and the copying of Thrive’s designs and computer files. The Joybird website was launched in January 2014. Thrive claims that even after leaving the company, the defendants continued to steal from Thrive by accessing Thrive’s computer system without authorization.
One example of this alleged theft is Thrive’s highly valuable and confidential list of customers and potential customers. Thrive claims that the four stole Thrive’s client data to develop their competing business. In one instance in 2014, Thrive watched as four customer requests for packets of fabric swatches — each a promising lead worth approximately $350 — were deleted from its computers. Thrive claims that shortly after the Joybird defendants left the company toward the end of 2013, requests for fabric packets dropped from about 80 per week to 10. As another example of the four’s tampering with Thrive’s computer system, the company’s complaint indicates that soon after the four left Thrive at the end of 2013, Thrive discovered that its fabric CNC machine had stopped working because the computer files it used to create its products had been deleted. According to the complaint, roughly 80 percent of Thrive’s hard copies of its engineering schematics, frame designs, and fabric designs also were discovered to be missing after Stormer, Stellin, Hinostroza, and Del Toro left the company.
In addition, the former employees are accused of creating a back door with which to access Thrive’s computers, copy and delete information, and even prevent Thrive from fully accessing its own computer network. Thrive says that to this day, it cannot access all of its computer systems because the defendants have not revealed the passwords that they changed before leaving the company.
Thrive claims that Joshua Stellin, Andres Hinostroza, Alejandro Andres Del Toro aka Alex Del Toro, the Joybird defendants, breached their employment agreements, in which they agreed to work solely for the benefit of their employer and to refrain from engaging in any other business activities that were directly competitive with the employer. Christopher Stormer, Former COO, had immense fudiciary responsibility. Thrive also claims that the former employees violated their confidentiality agreements by accessing, copying, and deleting Thrive’s customer information on behalf of their own enterprise. The former employees are being sued for breach of their duty of loyalty, breach of their fiduciary duties, breach of confidentiality, interference with Thrive’s economic advantage, and unfair competition. Thrive is seeking to establish ownership of the Joybird website, obtain restitution in excess of $33,000,000, an injunction preventing Stormer, Stellin, Hinostroza, and Del Toro from further violations of California’s unfair competition law, and an award of punitive damages.
Christopher Stormer
Joshua Stellin
Andres Hinostroza
Alejandro Andres Del Toro aka Alex Del Toro