34-2013-00140062

Elisa Lee vs. Rodrick Won

Nature of Proceeding: Motion to Compel Production of Documents

Filed By: Song, Haohao

**If any party requests oral argument, then at the time the request is made, the requesting party must inform the Department 54 Clerk and opposing counsel of
the specific discovery requests or other issues on which oral argument is
sought.**

Plaintiffs’ motion to compel Defendant Matouk, LLC (“Matouk”) to serve further
responses to requests for admissions, form interrogatories and document requests, as
well as produce responsive documents, is GRANTED in part and DENIED in part as
follows:

Preliminarily, the court rejects Matouk’s argument that, because individual defendants
Elisa Lee (“E. Lee”) and Victor Lee (“V. Lee”) (collectively “the Lees”) filed for
bankruptcy, and because V. Lee is a 100% shareholder of Matouk, the automatic stay
affecting the Lees also stays the action against Matouk. Matouk has not cited any
case holding that a shareholder’s bankruptcy petition stays litigation against the
corporate entity in which (s)he holds an interest. As the court noted in Central
Building, LLC v. Cooper (2005) 127 Cal.App.4th 1053, 1058, fn. 4, a bankruptcy
petition only stays litigation directed at the bankrupt party, not non-bankrupt co-
defendants. (See also Barnett v. Lewis (1985) 170 Cal.App.3d 1079, 1089 [“The fact
that respondent is a shareholder in the corporation and underwent bankruptcy
proceedings had no effect on property held by the corporation[…i]t is well established
that the automatic stay does not enjoin actions against entities that have not filed a
petition under the Bankruptcy Code”] [additional quotation marks omitted]; Maritime
Electric Co. v. United Jersey Bank (3d Cir. 1991) 959 F.2d 1194, 1205 [“A proceeding
against a non-bankrupt corporation is not automatically stayed by the bankruptcy of its
principal…”]; Harley-Davidson Credit Corp. v. Kutumian (E.D. Cal., Aug. 19, 2013)
2013 U.S. Dist. LEXIS 118172, at *2-3, fn. 1]; Manson v. Richard Friedberg & Oldstone
Ventures, LLC (S.D.N.Y., June 13, 2013) 2013 U.S. Dist. LEXIS 83488, at *6-8.)
Absent a case holding that a shareholder’s or LLC member’s bankruptcy petition
automatically stays litigation against the entity, the court rejects Matouk’s position.

The request for an order compelling further responses to E. Lee’s Requests for
Admissions Nos. 2-10, 17-19, 23 and 25 is GRANTED for the reasons set forth in
Plaintiffs’ separate statement. The further request for an order compelling a further
response to E. Lee’s Request for Admission No. 21 is DENIED because Matouk’s
objection, that the phrase “in connection with the reselling of” is vague and ambiguous,
is sustained.

The request for an order compelling further responses to V. Lee’s Requests for
Admissions Nos. 1-4 and 6-11 is GRANTED for the reasons set forth in Plaintiffs’
separate statement. The further request for an order compelling a further response to
V. Lee’s Request for Admission No. 5 is DENIED because Matouk’s objection, that the
request is vague and ambiguous, is sustained. The further request for an order
compelling a further response to V. Lee’s Request for Admission No. 12 is DENIED
because Matouk’s objection, that the phrase “in connection with the reselling of” is
vague and ambiguous, is sustained.

The request for an order compelling a further response to E. Lee’s Form Interrogatory
No. 17.1 as directed at E. Lee’s Request for Admission No. 17 is DENIED. Matouk
has stated that it is not aware of any responsive documents, and Plaintiffs have not
explained why this response is insufficient. The further request for an order compelling
a further response to E. Lee’s Form Interrogatory No. 17.1 as directed at E. Lee’s
Requests for Admissions Nos. 18-20 is GRANTED for the reasons set forth in
Plaintiffs’ separate statement. The further request for an order compelling a further
response to Form Interrogatory No. 17.1 as directed at Request of Admission No. 21 is
DENIED because Request for Admission No. 21 is objectionable (see above).

The request for an order compelling a further response to V. Lee’s Form Interrogatory
No. 17.1 as directed at V. Lee’s Requests for Admissions Nos. 11 and 12 is
GRANTED for the reasons set forth in Plaintiffs’ separate statement.

The request for an order compelling further responses to E. Lee’s Document Requests
Nos. 7-12 is GRANTED for the reasons set forth in Plaintiffs’ separate statement. The
alternative request for an order compelling production of responsive documents is
DENIED as premature. The court cannot compel production of documents until the
responding party states that it will produce responsive documents and thereafter fails
to make/completely make the production. (CCP § 2031.320(a).)

Matouk shall serve all the further written responses order herein no later than
November 6, 2013.

Pursuant to CCP §§ 2030.300(d), 2031.310(h) and 2033.290(d), the court imposes a
monetary sanction against Matouk and its counsel, The Fullman Firm, PC, in the
amount of $375.00 (1.5 hrs @ the reasonable rate of $250.00/hr). Although the results
of the motion are somewhat mixed, Matouk largely opposed without substantial
justification, and circumstances do not otherwise make the imposition of monetary
sanctions unjust. Matouk and The Fullman Firm, PC, shall pay the sanction no later
than November 25, 2013. If Matouk and its counsel fail to pay the sanction by such
date, then Plaintiffs may lodge for the court’s signature a formal order awarding
sanctions, which may be enforced as a separate judgment. (See Newland v. Superior
th
Court (1995) 40 Cal.App.4 608, 615.)

The notice of motion does not provide notice of the court’s tentative ruling system, as
required by Local Rule 1.06(D). Counsel for moving party is directed to contact
counsel for opposing party forthwith and advise counsel of Local Rule 1.06 and the
court’s tentative ruling procedure. If counsel for moving party is unable to contact
counsel for opposing party prior to hearing, counsel for moving party shall be available
at the hearing, in person or by telephone, in the event opposing party appears without
following the procedures set forth in Local Rule 1.06(B).

The minute order is effective immediately. No formal order pursuant to CRC 3.1312 or
further notice is required.