Case Number: BC497551 Hearing Date: June 09, 2014 Dept: 34

Moving Party: Plaintiff Advance Tuner Warehouse (“plaintiff”)

Resp. Party: Defendant Duy Ngoc Nguyen (“defendant”)

Plaintiff’s motion is GRANTED IN PART AND DENIED IN PART.

PRELIMINARY COMMENTS:

The Court has received an opposition, presumably on behalf of defendant Duy Ngoc Nguyen. The opposition was filed by the Law Offices of Barry Bisson; the heading of the pleading identifies Bisson as the “former attorney” for defendant Nguyen. The Court notes that if Mr. Nguyen is representing himself, he can file an opposition; if he has a new attorney, that attorney can file an opposition. However, the Court is unaware of any rule of court that allows a former attorney to represent a client by filing an opposition to a motion.

BACKGROUND:

Plaintiff commenced this action on December 17, 2012, against defendants for trademark and patent infringement, intentional interference with prospective economic relations, violation of the unfair competition law, misappropriation, and violation of the Uniform Trade Secrets Act.

Plaintiff was formed in 2003 and began conducting business using “NRG” as a brand name for its products. (Compl., ¶ 5.) Plaintiff owns and holds a trademark to the NRG brand name. (Id., ¶ 5, Exh. 1.) Plaintiff has developed and patented unique “quick release” mechanisms for automotive steering wheels and hub assemblies. (Id., ¶¶ 7-8.) Prior to 2012, defendants were distributers approved by plaintiff to market its products. (Compl., ¶ 9.) In 2011, plaintiff learned that defendants were selling Quick Release products that were sold without a name attached to them, but which infringed on plaintiff’s patent. (Ibid.) Plaintiff told defendants to immediately cease selling the products, but learned that defendants persisted in doing so. (Ibid.) Plaintiff then informed defendants that they were no longer an approved NRG distributor and terminated their business relationship. (Ibid.) In October 2012, plaintiff learned that defendants were continuing to sell Quick Release and hub assemblies that infringe on plaintiff’s patent and that display the NRG trademark. (Id., ¶ 10.) Plaintiff alleges that this conduct is designed to disrupt plaintiff’s economic relationships. (Id., ¶¶ 16-18.)

On 12/28/12, defendant filed a cross-complaint against plaintiff. Plaintiff demurred to this cross-complaint and the Court tentatively sustained the demurrer. (See Minute Order, 2/6/14.) The demurrer was deemed moot because defendant informed the Court that it would be filing a dismissal of the cross-complaint.

On 3/26/13, plaintiff dismissed its first cause of action without prejudice.

On 7/18/13, the Court heard several motions to compel filed by plaintiff which concerned the discovery at issue in the instant motions. The Court noted that the discovery had been served at the wrong address and ordered plaintiff to re-notice the motions and serve defendant at the correct address all documents filed since 1/1/13. The Court continued the other motions set for that day.

On 9/19/13, plaintiff’s discovery motions were once again set for hearing. The Court denied the motions, without prejudice to plaintiff re-submitting the motions with evidence as to whether defendant provided timely responses to the discovery that was re-served on 7/18/13.

On 9/19/13, the Court also heard plaintiff’s motion for preliminary injunction; plaintiff’s demurrer to defendant’s cross-complaint; defendant’s demurrer to the complaint; defendant’s motion for summary judgment; plaintiff’s motion for terminating sanctions; plaintiff’s motion to strike; defendant’s motion to continue the hearing; defendant’s motion to quash plaintiff’s request for admissions, interrogatories; defendant’s motion to compel responses to interrogatories; and defendant’s motion for a directed verdict. The Court denied the following motions: plaintiff’s motion for a preliminary injunction; defendant’s motion for summary judgment; plaintiff’s motion for terminating sanctions; defendant’s motion to continue; defendant’s motion to quash; defendant’s motion to compel; and defendant’s motion for directed verdict. The Court sustained plaintiff’s demurrer to the cross-complaint with leave to amend. The Court sustained defendant’s demurrer as to the third cause of action with leave to amend, and overruled the remainder of the demurrer.

On 9/24/13, defendant filed a first amended cross-complaint (“FACC”) against the moving parties for misrepresentations and interference with prospective business advantage. The FACC alleges that plaintiff and its attorney, House, have made several misrepresentations. It also alleges that Steven Anderson disrupted defendant’s business relationship with retailers.

On 11/19/13, the Court granted plaintiff’s motions to compel discovery. The Court denied several motions filed by defendant.

On 3/24/14, plaintiff filed a first amended complaint for: (1) unfair competition; (2) intentional interference with prospective economic advantage; and (3) misappropriation of trade secrets.

ANALYSIS:

Plaintiff moves for terminating sanctions, or alternatively issue or evidentiary sanctions, and monetary sanctions.

Terminating Sanctions

Code of Civil Procedure section 2023.030 gives the court the discretion to impose sanctions against anyone engaging in a misuse of the discovery process. A court may impose terminating sanctions by striking pleadings of the party engaged in misuse of discovery or by rendering judgment by default against that party. (Code Civ. Proc., § 2023.030(d)(1), (4).) A violation of a discovery order is sufficient for the imposition of terminating sanctions. (Collison & Kaplan v. Hartunian (1994) 21 Cal.App.4th 1611, 1620.) Terminating sanctions are appropriate when a party persists in disobeying the court’s orders. (Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 795-796.)

A terminating sanction is a “drastic measure which should be employed with caution.” (Deyo, 84 Cal.App.3d at 793.) “A decision to order terminating sanctions should not be made lightly. But where a violation is willful, preceded by a history of abuse, and the evidence shows that less severe sanctions would not produce compliance with the discovery rules, the trial court is justified in imposing the ultimate sanction.” (Mileikowsky v. Tenet Healthsystem (2005) 128 Cal.App.4th 262, 279-280.) While the court has discretion to impose terminating sanctions, these sanctions “should be appropriate to the dereliction and should not exceed that which is required to protect the interests of the party entitled to but denied discovery.” (Deyo, 84 Cal.App.3d at 793.) “[A] court is empowered to apply the ultimate sanction against a litigant who persists in the outright refusal to comply with his discovery obligations.” (Ibid.) Discovery sanctions are not to be imposed for punishment, but instead are used to encourage fair disclosure of discovery to prevent unfairness resulting for the lack of information. (See Midwife v. Bernal (1988) 203 Cal.App.3d 57, 64 [superseded on other grounds as stated in Kohan v. Cohan (1991) 229 Cal.App.3d 967, 971].)

“A trial court has broad discretion to impose discovery sanctions, but two facts are generally prerequisite to the imposition of nonmonetary sanctions….: (1) absent unusual circumstances, there must be a failure to comply with a court order, and (2) the failure must be willful.” (Biles v. Exxon Mobil Corp. (2004) 124 Cal.App.4th 1315, 1327. But see Reedy v. Bussell (2007) 148 Cal.App.4th 1272, 1291 [“willfulness is no longer a requirement for the imposition of discovery sanctions.”].)

On 11/19/13, the Court ordered defendant to provide verified responses and responsive documents, without objections, to plaintiff’s special interrogatories (set one), form interrogatories (set one), and demands for production (sets one and two). The Court imposed monetary sanctions against defendant in the total amount of $950.00. In late December 2013 plaintiff’s counsel received, among other things, defendant’s supplemental responses to form interrogatory number 17.1 and responses to requests for documents (set one). (House Decl., ¶ 4, Exhs. 3-4.) Plaintiff’s counsel does not clearly declare that defendant failed to respond to other discovery, and the inclusion of the phrase “among other things” suggests that more responses were served. (See ibid.) Defendant provides evidence which suggests that he did provide appropriate responses to the discovery. (See Nguyen Decl., ¶ 2; Bisson Decl., ¶ 6, attached letters.) Because plaintiff fails to sufficiently show that defendant failed to comply with the 11/19/13 order, the Court declines to order sanctions at this time for this purported conduct.

Plaintiff also refers to defendant’s failure to attend the second session of his deposition. (See House Decl., ¶ 5.) This is also insufficient to support terminating sanctions. Notably, plaintiff does not assert that defendant has not subsequently attended the deposition. Moreover, the Court notes that plaintiff has not moved to compel defendant’s deposition.

For the first time in the reply, plaintiff refers to subsequent sets of written discovery to which defendant has not responded. (See House Decl. [reply], ¶ 3, Exhs. 11-14.) The Court declines to impose terminating sanctions for this failure; a more reasonable course of action would be for plaintiff to move to compel responses to this discovery.

Accordingly, plaintiff’s request for terminating sanctions is DENIED.

Issue or Evidentiary Sanctions

A motion for issue or evidentiary sanctions must be accompanied by a separate statement. (Cal. Rules of Court, rule 3.1345(a)(7).) Plaintiff fails to provide a separate statement.

Pursuant to Code of Civil Procedure section 2023.030, the Court may impose other sanctions for the misuse of the discovery process:

[¶] (b) The court may impose an issue sanction ordering that designated facts shall be taken as established in the action in accordance with the claim of the party adversely affected by the misuse of the discovery process. The court may also impose an issue sanction by an order prohibiting any party engaging in the misuse of the discovery process from supporting or opposing designated claims or defenses. . .

[¶] (c) The court may impose an evidence sanction by an order prohibiting any party engaging in the misuse of the discovery process from introducing designated matters in evidence.

(Code Civ. Proc., § 2023.030.)

For reasons discussed above, plaintiff has not sufficiently established that non-monetary sanctions are warranted. Plaintiff fails to establish that defendant has not responded to the discovery such that issue or evidentiary sanctions are warranted.

Accordingly, plaintiff’s request for issue and/or evidentiary sanctions is DENIED.

Monetary Sanctions

Plaintiff also seeks to impose monetary sanctions against defendant. California Code of Civil Procedure section 2023.030 provides that

[t]he court may impose a monetary sanction ordering that one engaging in the misuse of the discovery process, or any attorney advising that conduct, or both pay the reasonable expenses, including attorney’s fees, incurred by anyone as a result of that conduct . . . If a monetary sanction is authorized by any provision of this title, the court shall impose that sanction 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.

(Code Civ. Proc. § 2023.030(a).)

Defendant requests monetary sanctions for both the current motion and for two previous ex parte applications to quash. A court may award expenses if it finds that the application “was made or opposed in bad faith or without substantial justification.” (Code Civ. Proc., § 1987.2(a).) The Court well remembers defendant’s two ex partes – both were frivolous. The April 8, 2014 ex parte to quash a deposition subpoena for business records was moot before it was brought – the Bank has already produced the documents requested prior to the ex parte motion. The April 16, 2014 ex parte was even more frivolous. It was an ex parte to quash a subpoena, and was based on CCP §§ 2010 and 2020.130. The Court denied the ex parte. As the court noted at the hearing, CCP § 2010 has nothing to do with quashing a subpoena. It states, in its entirety “Evidence of the publication of a document or notice required by law, or by an order of a Court or Judge, to be published in a newspaper, may be given by the affidavit of the printer of the newspaper, or his foreman or principal clerk, annexed to a copy of the document or notice, specifying the times when, and the paper in which, the publication was made.” CCP § 2020.130, the other statute cited by defendant for the ex parte, does not exist.

Defendant requests monetary sanctions in the amount of $5635 for needlessly having to appear at and oppose these two ex partes. The Court finds that amount excessive.

Plaintiff also presents evidence that, two days before defendant was to appear for the second session of his deposition, his agent represented that his attorney was no longer available. (House Decl., ¶ 5.) Plaintiff’s attorney then contacted the arranged-for court reporter, who had also arranged a translator, and cancelled the arrangements for the deposition. (Ibid.) The reporter did not assess a cancellation fee, but the interpreter did assess such a fee for $625.00. (Ibid.) Plaintiff seeks to recover this amount from defendant.

The Court will impose monetary sanctions against defendant pursuant to CCP §2023.030 in the amount of $2,625.00 – $2,000 for the frivolous ex partes and $625 for the cost of the interpreter when defendant failed to appear at his deposition.

Sanctions to be paid to opposing counsel within 30 days.