Lewis v. Lewis CASE NO. 112CV216003
DATE: 6 June May 2014 TIME: 9:00 LINE NUMBER: 3
This matter will be heard by the Honorable Judge Socrates Peter Manoukian in Department 19 in the Old Courthouse, 2nd Floor, 161 North First Street, San Jose. Any party opposing the tentative ruling must call Department 19 at 408.808.6856 and the opposing party no later than 4:00 PM Thursday 5 June 2014. Please specify the issue to be contested when calling the Court and counsel.

On 6 June 2014, the motion of Defendant William Bradley Bloyd to compel Plaintiffs to provide responses/further responses to special interrogatories, sets one and two, and demand for inspection, set two and for monetary sanctions was argued and submitted.

Defendants did not file formal opposition to the motion.

Statement of Facts

This Court has only the moving papers available as the file itself was in Department 3. There is no summary of the facts of the case and therefore the memorandum of points and authorities contained in the moving papers do not comply with Rule of Court 3.1113(b).

Page 2 of the Declaration of Terence Kenney is missing.

Notwithstanding these deficiencies, and in an attempt to avoid further delay, this Court will attempt to supply the missing data from the papers presented and from other material by which this Court can take judicial notice of certain background information.

As best as this Court can ascertain, this is a legal malpractice and negligence action. Plaintiff Steven Lewis worked for defendant Bob Lewis, his father, at Bob Lewis Volkswagen, Inc (“BLVW”). In 1995 Bob and Glynne Lewis, his wife, purchased 60% of the real property known as 911 Capitol Expressway, San Jose, CA (“BLVW Property”) through their living trust for $2.4 million dollars from VW Credit Inc. with their personal attorney, defendant Gary Vandeweghe (“Vandeweghe”), co-trustee of the G. Lewis Accommodation Trust, possessing the other 40%. In March 1998, Steven Lewis accepted a 49% partnership in BLVW and thus Bob transferred 440 shares in the company to Steven.

In April 1999, Bob and Steve decided to purchase property and a dealership in Fremont, CA. Thus, a new loan was taken out in the amount of $4,000,000 from Co-America to finance the purchase of the property. In May 1999, Bob and Glynne and Steve and Margaret, as trustees of their respective trusts, formed Lewis Realty, LLC in equal partnership. Lewis Realty, LLC deposited $1,005,891.71 into escrow to purchase the Fremont dealership. Also in May 1999, Bob and Steve formed Lewis Investments, Inc., an S corporation with the Bob and Glynne trust as 51% owner of 510 shares and the Steve and Margaret trust as 49% owner with 490 shares. The company incorporated the purchase of Fremont Ford Sales, Inc. which included the dealership and the vehicles for $500,000 and an additional $20,000 in tools.

Plaintiffs Steven Lewis and Margaret Lewis (collectively, “Plaintiffs”) allege that defendant Bob treated the various entities which he has ownership in as his “personal financial playground” by transferring funds back and forth between BLVW, Bob Lewis Newark, Lewis Investment, Inc. and Lewis Realty, Inc. Plaintiffs also claim that Bob caused debts owed to Volkswagen of America and Volkswagen Credit, Inc. to be transferred through refinancings among the various entities, payoffs of loans by entities which were not obligated and similar activities which benefited him personally, and which were not disclosed to Plaintiffs. Finally, Plaintiffs allege that Bob caused transfers of debts such that he personally benefited, and that funds which should have benefited BLVW, were actually used to benefit Bob personally.

With respect to defendant Vandeweghe, Plaintiffs allege that he represented Steve, Margaret, Bob, Glynne, the various trusts of these individuals, BLVW, Lewis Realty, LLC, and a variety of other entities in which the parties were all members. Plaintiffs claim that Vandeweghe:

• failed to appropriately notify Plaintiffs of important conflicts of interest;
•
• failed to appropriately notify Plaintiffs of personal dealings with Bob at the time he also represented them;
•
• failed to appropriately represent Plaintiffs and adequately protect their interest by failing to document lease terms between BLVW and property owned by Plaintiffs;
•
• failed to notify Plaintiffs and their trust of transactions which were detrimental to Lewis Realty;
•
• failed to properly respond to a temporary restraining order filed by Ford Motor Company;
•
• failed to adequately represent Steve in collection matters by Ford Motor Company and other matters, including failing to notify Plaintiffs of his conflict of interest.
•
Vandeweghe continued to represent Plaintiffs, Bob, Glynne, and BLVW through the negotiation of the sale of the majority assets of BLVW to the Del Grande Dealership Group after BLVW filed bankruptcy on January 2, 2008. In fact, Vandeweghe allegedly assisted Bob in negotiating the sale of the majority assets of BLVW to the Del Grande Dealership Group. Vandeweghe continued to represent BLVW, requesting payment of fees from the bankruptcy court for work performed through October 13, 2010.

On January 3, 2012, Plaintiffs filed a complaint against defendants alleging the following causes of action: (1) unknown; (2) malpractice; and (3) unknown.

On May 15, 2013, defendant Vandeweghe filed a demurrer to the complaint on the grounds that it fails to state a cause of action and uncertainty. (Code Civ. Proc. § 430.10, subd. (e) and (f).) The demurrer was scheduled for hearing on June 11, 2013. On that day, the court (Hon. McKenney) sustained the demurrer with leave to amend.

On June 21, 2013, Plaintiffs filed a First Amended Complaint (“FAC”) alleging the following causes of action: (1) negligence; (2) malpractice; (3) unknown; (4) interpleader; and (5) declaratory relief.

On July 26, 2013, defendant Vandeweghe filed the following motions: (1) a special motion to strike the first, second and third causes of action in the FAC; (2) a demurrer to the first, second, and third causes of action in the FAC; and (3) motion to strike portions of the FAC. Following the hearing, the court (Hon. McKenney) denied the special motion to strike and overruled the demurrer to the first and second causes of action. The demurrer to the third cause of action was sustained with leave to amend on the ground of uncertainty. The motion to strike was denied.

On September 26, 2013, Plaintiffs filed a second amended complaint (“SAC”), now the operative pleading, alleging causes of action for: (1) negligence; (2) malpractice; (3) interference with prospective economic advantage; (4) interpleader; and (5) declaratory relief.

On October 11, 2013, defendant William Bradley Bloyd (“Bloyd”) filed a demurrer to the second and third causes of action in the SAC for failure to state a claim. Bloyd also filed a motion to strike the fourth and fifth causes of action. The following motions were filed on October 21, 2013:

• Defendant Anni Working (“Working”) filed a special motion to strike the SAC, or alternatively, to strike the third cause of action. Working has requested judicial notice of certain documents in conjunction with the motion;
•
• Defendant Bob Lewis filed a special motion to strike the SAC, or alternatively, to strike the first or third causes of action. Bob has requested judicial notice of certain documents in conjunction with the motion; and
•
• Defendant Gary Vandeweghe (“Vandeweghe”) filed a demurrer to the SAC on the grounds that the first, second, and third causes of action are uncertain and fail to state a claim. Vandeweghe has also requested judicial notice of certain documents in conjunction with the motion.
•
Discovery Dispute

Moving Party/Defendant Bloyd served the discovery at issue to ascertain the factual underpinnings of Paragraphs 12 and 61 of the Second Amended Complaint in so far as they pertain to Defendant Bloyd. While the complaint has been amended, the filing of the Second Amended Complaint did not substantively change the allegations against Moving Party/Defendant Bloyd.

Analysis

This Court has reviewed the Separate Statement prepared by Moving Party/Defendant Bloyd. The motion of Moving Party/Defendant Bloyd to compel Plaintiffs to provide responses/further responses to special interrogatories, sets one and two, and demand for inspection, set two is GRANTED in its entirety. Plaintiffs are ordered to provide further code-compliant responses without objection and within 20 days of the date of the filing of this Order.

Sanctions

Moving Party/Defendant Bloyd makes a demand for monetary sanctions.

Code of Civil Procedure, § 2023.040 states: “A request for a sanction shall, in the notice of motion, identify every person, party, and attorney against whom the sanction is sought, and specify the type of sanction sought. The notice of motion shall be supported by a memorandum of points and authorities, and accompanied by a declaration setting forth facts supporting the amount of any monetary sanction sought.” See Rule of Court 2.30.

While the notice of the motion is code compliant, a memorandum of points and authorities is not.

Bloyd cites Code of Civil Procedure, §§ 2023.010 and 2030.130. Section 2023.010 defines acts that constitute misuses of the discovery process, and does not itself set forth any provisions regarding the issuance of a monetary sanction.

Next, section 2023.030 provides that sanctions may be imposed for misuses of the discovery process “[t]o the extent authorized by the chapter governing any particular discovery method or any other provision of this title.” As such, section 2023.030 does not provide an independent basis for an award of sanctions. In other words, to invoke section 2023.030 as a basis for sanctions, the moving party must first be authorized to seek sanctions under the provisions in the Civil Discovery Act applicable to the discovery requests at issue.

Bloyd further cites Code of Civil Procedure, §§ 2030.300(d) and 2031.310(h) as the entitlement to sanctions. However, sanctions in those matters may be assessed only when party “unsuccessfully makes or opposes a motion to compel a further response. . .”

Here, Plaintiffs did not oppose the motion.

The proper procedure would be to put the following language in the notice of the motion:

“If you wish to oppose the relief requested in this motion, you must timely file a written reply in compliance with all Court rules. If you fail to do so, the court may treat your failure to respond as a waiver of your right to oppose this motion and may grant the relief requested pursuant to Rule of Court 3.1348(a) which states: “The court may award sanctions under the Discovery Act in favor of a party who files a motion to compel discovery, even though no opposition to the motion was filed, or opposition to the motion was withdrawn, or the requested discovery was provided to the moving party after the motion was filed.”

The request for monetary sanctions is DENIED.

Order

The motion of Moving Party/Defendant Bloyd to compel Plaintiffs to provide responses/further responses to special interrogatories, sets one and two, and demand for inspection, set two is GRANTED in its entirety. Plaintiffs are ordered to provide further code-compliant responses without objection and within 20 days of the date of the filing of this Order.

The request for monetary sanctions is DENIED.