Case Name: Lee v. Yang, et al.

Case No.: 16CV296530

This is a breach of contract action brought by plaintiff Robert Y. Lee (“Plaintiff”), a retired engineer, against defendant Philip Z. Yang (“Defendant”), a trained acupuncturist. According to the allegations in the First Amended Complaint (“FAC”), on or around 2012, the parties decided to start a corporation called the EMAC Medical Anti-Aging Center (“EMAC”) – a clinic devoted to Eastern relaxation and health services. (FAC, ¶ 5-6.) To that end, they entered into an investment agreement whereby Plaintiff would invest money and contribute funds for remodeling a space for EMAC’s operation, while Defendant would contribute money and operate the business full time. (FAC, ¶ 6-7.) The space they chose for EMAC’s operation was the first floor of a building owned by Defendant, in which he was already operating Nine Star University – a school for teaching Chinese medicine – on the second floor. (FAC, ¶ 7.)

Plaintiff worked full time on remodeling the first floor and contributed the promised funds while Defendant contributed only a portion of the agreed-upon amount and spent little or no time on the operation of the business. (FAC, ¶ 9-11.) The following year, Plaintiff’s attorney sent Defendant a letter requesting reimbursement of the funds he expended on EMAC. (FAC, ¶ 12.) Defendant responded by offering to buy out Plaintiff’s share in the business. (FAC, ¶ 13.) On or around January 2015, the parties entered into a buyout agreement and executed a promissory note in which Defendant promised to pay Plaintiff $250,000 over the course of a three-year period. (FAC, ¶ 14.) Defendant did not make any payments under the note but contended several months later that the buyout agreement was invalid. (FAC, ¶ 16-17.) Notwithstanding this assertion, Defendant continued to retain exclusive control over EMAC, changed the sign on the business to say “Calla Wellness Center and Spa” and dissolved EMAC without Plaintiff’s consent in December 2015. (FAC, ¶ 17, 19, 24.) Plaintiff also alleges that when Defendant took control of EMAC, he began diverting its revenue to Nine Star University or Nine Star Medical Group of Integrated Medicine (“Nine Star Medical Group”), a corporation Defendant formed in December 2015. (FAC, ¶ 22, 25.)

Plaintiff’s FAC asserts causes of action against Defendant for fraud, breach of the investment and buyout agreements, breach of fiduciary duty, conversion, accounting and declaratory relief. Defendant cross-complains for breach of contract, breach of fiduciary duty, fraud and declaratory relief.

The present matter involves a discovery dispute. Between May 8 and 18, 2017, Plaintiff served Requests for Production (“RPD”), Sets Two, Three and Four. (Abdalah Decl., ¶ 13, 14, 20.) RPD Sets Two and Three requested five years’ worth of business and financial documents for Nine Star University, Nine Star Medical Group, Calla Wellness Center and Spa, and several other entities Plaintiff believed were owned and operated by Defendant. (Id. at ¶ 13-15.) RPD Set Three also sought documents identifying all people or organizations who made donations to Nine Star University from 2013 to 2016. (Id. at ¶ 15.) RPD Set Four requested documents relating to the amendment, termination, dissolution and asset distribution of EMAC. (Id. at p. 21.) In total, Plaintiff propounded 184 document production requests on Defendant. (See Id.)

Defendant responded to the requests in RPD Set Two with only objections only while its responses to the requests in RPD Sets Three and Four consisted of objections only and hybrid responses (i.e. objections combined with statements he either did not have the documents requested or had previously produced them.) (Id., Exhs. 2, 4, 40.) Plaintiff’s counsel attempted to meet and confer with Defendant’s counsel regarding the responses only to discover that Defendant’s counsel had substituted out of the matter and Defendant would be proceeding in pro per. (Id. at ¶ 29-31.)

Plaintiff’s counsel then attempted to meet and confer with Defendant regarding the RPD responses and also engaged in settlement discussions with him. (Id. at ¶ 31.) On August 23, 2017, the parties agreed in writing to extend the deadline for filing a motion to compel to September 30, 2017. (Id. at ¶ 33, Exh. 32.) Around September 2017, Defendant retained present counsel to represent him in the matter. (Id. at ¶ 32.) No further extensions of the deadline for filing a motion to compel were granted. (Shah Decl. ¶ 4.)

Plaintiff filed a motion to compel further responses to RPD Sets Two, Three and Four on October 2, 2017. The papers filed in support comprised of the notice of motion, motion and memorandum of points and authorities. Nearly two months later, on November 22, 2017, Plaintiff filed a separate statement, declaration and accompanying exhibits in support of his motion. Defendant opposes this motion. Both parties request an award of sanctions in connection with the motion.

I. Motion to Compel

The specific relief sought by the motion is not clearly articulated. The notice of motion states this matter is being brought under Code of Civil Procedure sections 2023.10 and 2031.010 and seeks “written, verified responses” to the RPDs at issue. There are a number of issues with this recitation of grounds. Namely, the first statute cited does not exist, the second statute merely discusses the general right to discovery through inspection demands, and the dispute here does not seem to be the lack of any responses but Plaintiff’s dissatisfaction with the responses provided by Defendant. Plaintiff’s memorandum of points and authorities does not provide more illumination as it cites to statutes relating to motions to compel further responses to interrogatories. However, while not citing to the statute itself, he does partially quote language from Code of Civil Procedure section 2031.310 (“Section 2031.310”) relating to the right to compel a “further response to a demand” if it deems “[a]n objection to an interrogatory [sic] is without merit or too general” and the motion otherwise indicates he is seeking further responses to the requests. (Mtn. at p. 8.) Because the record here reflects Defendant served objections-only responses to RPD Set Two, and verified responses to the RPD Sets Three and Four, the Court will treat this motion as seeking to compel further responses to inspection demands under Section 2031.310.

As a threshold matter, Defendant argues the motion should be denied as untimely as it was both filed two days past the agreed-upon deadline and in piecemeal fashion with the separate statement, supporting declaration and attendant exhibits being filed nearly two months later. In his reply, Plaintiff on the one hand argues the motion was not timely because Defendant’s counsel refused to meet and confer regarding the RPD responses. On the other hand, he insists the motion was timely because he was entitled to file his motion the court day after the stipulated deadline which fell on a Saturday. With respect to his fragmented filing of the motion, he argues Defendant was not prejudiced.

The parties do not dispute that Plaintiff’s counsel and Defendant entered into a written agreement to extend Plaintiff’s deadline to file a motion to compel to September 30, 2017. They also do not dispute that Plaintiff filed his notice of motion, motion and memorandum of points and authorities on October 2, 2017, and his separate statement, declaration and exhibits in support of such motion nearly two months later on November 22, 2017.

A. Belated Filing

A motion to compel must be brought within 45 days of service of the verified response or “on or before any specific later date” to which the parties have agreed in writing. (Code Civ. Proc., § 2031.310, subd. (c) (emphasis added).) The deadline for filing a motion to compel is jurisdictional in that it renders a court without authority to rule on untimely motions other than to deny them. (Sexton v. Superior Court (1997) 58 Cal.App.4th 1403, 1410 (“Sexton”); Vidal Sassoon, Inc. v. Sup. Ct. (1983) 147 Cal.App.3d 681, 685.)

Here, the 45-day limit is not implicated since the parties stipulated to an extension of time. Defendant argues the language of Section 2031.310 is clear, requiring Plaintiff to file a motion to compel further responses to the RPDs “on or before any specific later date [the parties agreed upon]” – here, September 30, 2017. (See Code Civ. Proc., § 2031.310, subd. (c), emphasis added.) If the stipulated deadline fell on a Saturday, Defendant contends Plaintiff was required to file the motion before that deadline had passed. Otherwise, this would render the “on or before” language of the statute a nullity. Defendant’s argument is well-taken.

The tenets of statutory construction require courts to ascertain the intent of the Legislature so they may adopt the construction that best effectuates the purpose of the law. (Esberg v. Union Oil Co. (2002) 28 Cal.4th 262, 268.) To that end, courts first turn to the “words themselves because the statutory language is generally the most reliable indicator of legislative intent.” (Hassan v. Mercy American River Hospital (2003) 31 Cal.4th 709, 715; People v. Trevino (2001) 26 Cal.4th 237, 241.) In interpreting statutory language, statutes should not be construed in a way that renders any part of it “meaningless or inoperative.” (Manufacturers Life Ins. Co. v. Superior Court (1995) 10 Cal.4th 257, 274.)

Were the Court to adopt Plaintiff’s position that he was entitled to file the present motion on the court day following the specific later date the parties agreed to, this would render the “on or before” language in Section 2031.310 inoperative or meaningless. Such an interpretation would also seem to run counter to the Legislature’s intent in crafting the statute as it did. As observed by the court in Sexton, supra, in 1986, the Legislature amended the statutes governing motions to compel by removing provisions that previously allowed courts to enlarge the time for making a motion, thereby removing the measure of flexibility previously accorded to these timelines. (58 Cal.App.4th at 1409.) The court noted this change was consistent with the overall “pattern [of the 1986 amendments] of restrictions, sanctions, and the attempt to force cooperation [which] clearly evinced the legislative intent that discovery proceed not only smoothly, but swiftly as well.” (Id. at p. 1410 (emphasis added), citing Professional Career Colleges, Magna Institute, Inc. v. Superior Court (1989) 207 Cal.App.3d 490, 493-94.) The legislative history indicating a preference for expediting the discovery process coupled with the express language of the statute itself compels the conclusion that when the Legislature permitted filing a motion to compel “on or before” a specific later date agreed upon by the parties, it did not intend to build into such language the flexibility to permit a filing after that date where such date falls on a Saturday.

In his reply, Plaintiff contends he was entitled to file the motion on the court day following the agreed-upon September 30, 2017 deadline but does not cite any legal authority supporting his position. Though the Court is aware that Code of Civil Procedure section 13 generally permits filing on the following court day where a deadline otherwise falls on a weekend or holiday, this is not a case involving the 45-day limit which would normally be governed by operation of law. Instead, the parties here specifically agreed that a motion to compel could be filed on or before a specific date.

Accordingly, Plaintiff was required to file his motion to compel further responses on or before September 30, 2017. Since he filed it on October 2, 2017, his motion is untimely.

B. Piecemeal Filing

Even assuming Plaintiff was permitted to file his motion on October 2, 2017, his motion would still be untimely because he did not complete his filing on that date. Rather, Plaintiff only filed his notice of motion, motion and memorandum of points and authorities on October 2, 2017. His separate statement and supporting declaration and exhibits were filed nearly two months later on November 22, 2017. His motion was therefore neither complete nor valid when filed on October 2, 2017.

The law clearly contemplates that all papers required to support a motion must be filed at the same time. (See e.g. Branner v. Regents of Univ. of California (2009) 175 Cal.App.4th 1043, 1049 [“a single, complete, valid motion must be filed – not one that is later assembled from constituent parts like some Frankenstein monster.”]) Under California Rules of Court, rule 3.1112, a motion must consist of at least a notice of hearing, motion and supporting memorandum while other papers, such as declarations and exhibits, may also be filed in support. (Cal. Rules of Court, rule 3.112(a) & (b).) Furthermore, with respect to discovery motions in particular, California Rules of Court, rule 3.1345 (“CRC 3.1345”), subd. (a), explicitly states that motions to compel further responses to a demand for inspection of documents “must be accompanied by a separate statement.”

A separate statement must be filed concurrently with the motion to compel as it is perhaps the most important document required in connection with such motion. It is common practice for parties to set forth minimal content in the memorandum of points and authorities since they are required to set forth the entire substance of the dispute in the separate statement. (See Cal. Rules of Court, rule 3.1345 (“CRC 3.1345”), subd. (c) [requiring that a separate statement include the text of each discovery request and response along with a statement of all factual and legal reasons for compelling further responses, answers, or production.]) This was not the exception here, where Plaintiff’s initial filing was eleven pages long and his later-filed separate statement was three times that length and accompanied by around three hundred pages of exhibits in a supporting declaration. As such, Plaintiff’s October 2, 2017 filing did not consist of the primary substance of his motion to compel and his attempt to belatedly assemble its essential parts was clearly improper. (See Branner, supra, 175 Cal.App.4th at 1049.)

If parties were permitted to cobble together the constituent documents required to complete their motion by filing them at different times, this would enable them to utterly circumvent any timing requirements mandating that certain documents be filed by a certain date. Such a result cannot be correct. Therefore, because Plaintiff did not complete the filing of his motion to compel until November 22, 2017, his motion was untimely and the Court will not reach its merits.

C. Conclusion

Accordingly, the motion to compel further responses to RPD Sets Two, Three and Four is DENIED.

II. Request for Sanctions

A. Plaintiff’s Request for Sanctions

In his reply, Plaintiff states for the first time that he is seeking monetary sanctions against Defendant pursuant to Code of Civil Procedure sections 2023.010, 2023.020 and 2023.030.

Plaintiff seeks monetary sanctions against Defendant based on his contention Defendant failed to properly meet and confer in an attempt to informally resolve the parties’ discovery dispute and also served its opposition to his motion one day late.

Plaintiff’s request is fatally defective because his initial notice of motion did not state he was seeking sanctions against Defendant or specify the type of sanctions being sought. (See Code Civ. Proc. § 2023.040; see also REO Broadcasting Consultants v. Martin (1999) 69 Cal.App.4th 489, 500 [courts generally do not consider arguments raised for the first time on reply for the simple reason that opposing counsel is deprived of an opportunity to address them]; Reichardt v. Hoffman (1997) 52 Cal.App.4th 754, 764; In re Tiffany Y. (1990) 223 Cal.App.3d 298, 302-303.) As such, the Court will not consider his belated request for sanctions.

B. Defendant’s Request for Sanctions

Defendant requests an award of monetary sanctions against Plaintiff pursuant to Code of Civil Procedure sections 2031.310, subdivision (h) and 2023.010 (“Section 2023.010”), subdivision (h).

Defendant argues Plaintiff acted without substantial justification in bringing a motion to compel that was both procedurally and substantively defective, and in refusing to withdraw such motion when such deficiencies were pointed out to him. Because the Court did not reach the merits of the motion, it will not address the issue of any purported substantive defects contained therein. With respect to the issue of procedural deficiencies, Defendant refers to the fact that the motion was not timely filed, was filed in piecemeal fashion, failed to identify the statute under which it was being brought, failed to specify the requests Plaintiff was seeking to compel production of, and failed to include a separate statement that complied with the requirements of CRC 3.1345. In reply, Plaintiff argues he was substantially justified in bringing the motion to compel because the documents he seeks are highly relevant to the issues in the lawsuit and he was forced to file the motion due to Defendant’s refusal to meet and confer with him.

Monetary sanctions may be imposed against any party, person or attorney who unsuccessfully makes or opposes a motion to compel further responses to an inspection demand, unless the one subject to sanctions acted with substantial justification or other circumstances exist that would make an award unjust. (Code Civ. Proc., § 2031.310, subd. (h).)

Here, the record reflects that Plaintiff’s counsel made good faith attempts to meet and confer with Defendant’s prior counsel after he received the responses to RPD Sets 2, 3 and 4. (Abdalah Decl., ¶ 29-30.) Upon discovering Defendant’s prior counsel had been substituted out and Defendant was proceeding in pro per, Plaintiff’s counsel continued in his attempts to informally resolve the dispute by continuing discussions with Defendant himself. (Id. at ¶ 31.) Plaintiff further represents, and Defendant does not dispute, that Defendant’s present counsel was retained around September 2017. (Id. at ¶ 32.) At that time, Plaintiff’s counsel requested an additional extension of the time to file a motion to compel. (Shah Decl., ¶ 3.) In response, Defendant’s counsel asked Plaintiff’s counsel to provide him with evidence of the existing extension of time to respond. (Id.) Defendant’s counsel contends on information and belief that Plaintiff’s counsel never responded regarding this issue. (Id.) Plaintiff’s counsel, on the other hand, asserts Defendant refused to authorize his new counsel to engage in meet and confer discussions with him, which Defendant’s counsel disputes. (Abdalah Decl., ¶ 12 cf. (Obj. to Abdalah Decl., ¶ 10.) Nonetheless, neither party disagrees as to the fact that no further extension of the time to file a motion to compel was granted. (Shah Decl. ¶ 4.) Taking these facts together – the substitution of Defendant’s counsel into the matter the same month the motion was due, Plaintiff’s unsuccessful attempts to meet and confer with new counsel, and the fact that no further extensions of time were granted – the Court finds these circumstances would make an award of sanctions unjust.

With respect to Defendant’s request for sanctions under Section 2023.010, it is unsupportable because this statute merely lists various misuses of the discovery process and does not independently authorize an award of sanctions. As such, sanctions cannot be awarded on this basis either.

C. Conclusion

For the reasons stated, Plaintiff’s and Defendant’s requests for monetary sanctions are both DENIED.