Judge: Barbara M. Scheper, Case: BC661231, Date: 2023-11-08 Tentative Ruling
Case Number: BC661231 Hearing Date: November 8, 2023 Dept: 30
Dept. 30
Calendar No.
Manifest Destiny
Transport Co., et. al. vs. South Bay Freight Systems, LLC, et. al., Case No. BC661231
Tentative Ruling
re: Judgment Creditor’s Motion to Compel
Further Responses to Post-Judgment Discovery Demand
Judgment Creditor Manifest Destiny
Transport Corp. (MD Transport) moves to compel Judgment Debtor South Bay
Freight System, LLC (SB Freight) to produce further responses to the
Post-Judgment Special Interrogatories and Post-Judgment Requests for Production.
The motion is granted in full. The Court awards monetary sanctions to MD
Transport in the amount of $9,679.50.
Under Code of Civil Procedure
section 708.020, “The judgment creditor may propound written interrogatories to
the judgment debtor . . . requesting information to aid in enforcement of the
money judgment. The judgment debtor shall answer the interrogatories in the
manner and within the time provided by Chapter 13 (commencing with Section
2030.010) of Title 4 of Part 4.”
A judgment creditor may also
“demand that any judgment debtor produce and permit the party making the demand
. . . to inspect and to copy a document that is in the possession, custody, or
control of the party on whom the demand is made in the manner provided in Chapter 14
(commencing with Section 2031.010) of Title 4 of Part 4, if the demand
requests information to aid in enforcement of the money judgment.” (Code Civ. Proc. § 708.030, subd. (a).)
Interrogatories and inspection
demands served pursuant to these sections “may be enforced, to the extent
practicable, in the same manner as [discovery] in a civil action.” (Code Civ. Proc. §§ 708.020, subd. (c); 708.030, subd.
(c).)
On March
10, 2022, the Court entered judgment in favor of MD Transport and against SB
Freight, in the amount of $760,378.82, plus attorney fees and costs.
On February 13, 2023, MD Transport
propounded the Post-Judgment Special Interrogatories and Post-Judgment Requests
for Production upon SB Freight. (Kluewer Decl. ¶ 4, Exs. 2-3.) On March 20,
2023, SB Freight served responses with objections to both sets of discovery.
(Kluewer Decl. ¶ 6, Exs. 4-5.) SB Freight produced documents on June 30, 2023,
but did not bates stamp the production or identify which requests the documents
were responsive to. (Kluewer Decl. ¶ 13.)
As an initial matter, the Court
rejects SB Freight’s argument that the postjudgment discovery violates the
automatic stay imposed following SB Freight’s appeal of the Judgment. Under Code Civ. Proc. § 917.1, subd. (a), “Unless an
undertaking is given, the perfecting of an appeal shall not stay enforcement of
the judgment
or order in the trial court if the judgment or order is for any of the
following: (1) Money or the payment of money....” Because the Judgment in this
action was a money judgment, SB Freight was required to give an undertaking to
stay enforcement. Contrary to SB Freight’s argument, the stay imposed in the
related case (22STCV27276) does not apply to enforcement of the judgment in this
action.
Special Interrogatories
The Special Interrogatories at
issue are Nos. 1, 2, 3, 5, 7, 12, 19, 20, 26, 27, 32, and 35.
Interrogatory Nos. 2, 3, 5, 7, 12,
19, and 26 ask SB Freight to identify its assets and customers within two years
of its dissolution; and to identify and describe any transfers of business
relationships, customers, or assets to third-parties, or to Unis Company, Inc.
(Unis) in particular. SB Freight responded that it did not have any tangible
assets and did not transfer assets or business relationships to any
third-party, including Unis, and identified only one customer within two years
of its dissolution, “Shipby.com which is now known as Unis Transportation,
LLC.”
Interrogatory No. 27 asks, “For any
customers identified in response to Special Interrogatory 26, describe whether
any of these customers transacted business with any entity associated with
James Lin after SB Freight’s dissolution.” Interrogatory No. 32 asks SB Freight
to “[i]dentify and describe the ultimate disposition of SB Freight’s customer
relationships.”
In its supplemental response to No.
2 (“Identify and describe any assets that SB Freight owned within two years of
SB Freight’s cessation of operations and/or dissolution”), SB Freight stated
only that “[i]t maintained bank accounts and had receivables within two years
of cessation of its operations and/or dissolution,” without identifying any of
those accounts or receivables. This response confirms that SB Freight has
failed to fully answer the interrogatory. “Where the
question is specific and explicit, an answer which supplies only a portion of
the information sought is wholly insufficient.” (Deyo v. Kilbourne
(1978) 84 Cal.App.3d 771, 783.) SB Freight’s responses must properly identify
and describe all assets owned.
SB Freight notes that it responded
to Interrogatory No. 35, “Identify any bank at which SB Freight held a bank
account since January 2016 to the present,” with “Cathay Bank.” SB Freight’s response to No. 35 does not
excuse it from answering No. 2, and the interrogatories do not seek the same
information. Furthermore, MD Transport presents evidence that the Cathay Bank
account was not SB Freight’s only bank account; SB Freight made significant
payments to MD Transport from an account at CTBC Bank in 2016 and 2017. (Van
Tran Decl. ¶ 2, Ex. 1.) SB Freight’s own document production also shows
payments from SB Freight to MD Transport from the CTBC account. (Kluewer Decl.
¶ 14, Ex. 13.) Alvin Li, a staff accountant with SB Freight, states that the
CTBC account was owned by Shipby.com. (Li Decl. ¶ 3.) However, the evidence
that this account was used to make payments on behalf of SB Freight indicates
that its funds were owned by SB Freight, not Shipby.com.
Given
this, in response to No. 12, SB Freight has failed to “[i]dentify and
describe any assets that left SB Freight’s possession within two-years
preceding SB Freight’s cessation of operations.” SB
Freight responded, “SB Freight’s bank statements would show any asset that left
its possession within two years preceding the cessation of operations.” Because
SB Freight has not produced all responsive bank statements, its objection that
answering “would necessitate the preparation or the making of a compilation,
abstract, audit, or summary of or from the documents” is unavailing. (Code Civ.
Proc. § 2030.230; Deyo, 84 Cal.App.3d at 784 [“This exception applies only
if the summary is not available and the party specifies the records
from which the information can be ascertained”].)
SB Freight’s responses that it had
only one customer, Shipby.com, and did not transfer any customers or business
relationships (Nos. 3, 7, 19, 26) also appear evasive. Defendant James Lin (Lin), the owner and
manager of SB Freight and the CEO of Unis Company, testified at trial that
“Unis has taken over SP [sic] Freights customers,” and he agreed that “SP [sic]
Freight is now Unis Transportation.” (Kluewer Decl. ¶ 3, Ex. 1.) MD Transport
also presents evidence that SB Freight had customers including Amazon, Samsung,
and Best Buy. (Kluwer Decl. ¶ 16.)
SB Freight now argues that Lin’s testimony was
mistaken, citing the deposition testimony of SB Freight’s PMK, James Tran, that
Unis Transportation (identified as the dba of Shipby.com) has no direct
relationship or business relationship with SB Freight. (Watnick Decl., Ex. B
[25].) However, SB Freight has identified Unis/Shipby.com as its sole customer
prior to dissolution (SROG No. 26) and SB Freight argues in this motion that a
bank account purportedly owned by Unis/Shipby.com was used to make payments on
SB Freight’s behalf. Tran’s statement that SB Freight and Unis had no business
relationship is not credible. Accordingly, the Court finds that SB Freight has
failed to provide complete answers to the interrogatories concerning its
customer and business relationships.
Last, Interrogatory No. 1 reads,
“Describe the reasons for SB Freight’s cessation of operations and/or
dissolution” (SB Freight dissolved in May 2017). SB Freight responded, “SB
Freight decided that it did not wish to remain in business.” The Court agrees
with MD Transport that this response is evasive. “[A]
party may not provide deftly worded conclusionary answers designed to evade a
series of explicit questions. . . . [W]here the
question is somewhat ambiguous, but the nature of the information sought is apparent,
the proper solution is to provide an appropriate response.” (Deyo, 84
Cal.App.3d at 783.) SB Freight’s answer merely restates the premise of the
interrogatory, that SB Freight decided to cease operations.
Requests for Production
The
Requests for Production at issue are Nos. 1, 2, 5, 8, 9, 10, 12, 13, 19, and 26.
Request No.
1 seeks documents or communications “that evidence, refer, or relate to any and
all of SB Freight’s assets within two years of SB Freight’s cessation of
operations.” Request No. 2 seeks
documents or communications related “to any and all of SB Freight’s customers
and/or business relationships within two years of SB Freight’s cessation of
operations.” Similarly, Request No. 8 seeks documents related to “the identify
of SB Freight’s customers and/or business relationships.”
SB Freight objected to these
requests as vague, unambiguous, unintelligible, and overbroad, though later
agreed to “produce documents sufficient to show its assets within two years of
cessation of operations” for Request No. 1, and to “produce documents
sufficient to show its customers for the two years before it ceased operations”
for Request Nos. 2 and 8.
SB Freight may not unilaterally
limit its production to “documents sufficient to show its assets,” or to
“documents sufficient to show its customers within two years of its cessation
of operations.” Rather, SB Freight’s production must include all responsive documents
within its “possession, custody, or control.” (Code Civ. Proc. § 2031.220.) MD Transport states that SB Freight’s
production does not include SB Freight’s tax returns, customer lists, or all
bank statements for accounts held in SB Freight’s name. (Kluewer Decl. ¶ 15.)
Those documents evidence, refer, or relate to SB Freight’s assets or business
relationships, and so are responsive to these requests. SB Freight must also properly
identify the documents produced “with the specific request number to which the
documents respond.” (Code Civ. Proc. § 2031.280, subd. (a).)
Request No.
5 seeks documents or communications related to any transfer of assets between
SB Freight and Unis Company, Inc. Request No. 12 similarly seeks documents or
communications related “to the transfer of anything of value between SB Freight
and any person and/or entity within two years of SB Freight’s cessation of
operations.” Request Nos. 9 and 10 seek documents or communications related “to
the transfer of SB Freight’s customers and/or business relationships to any
entity or person,” and to the transfer of customers and/or business
relationships specifically to Unis Company. Request No. 13 seeks documents or
communications related “to any bank statements for any bank accounts held in SB
Freight’s name from January 2016 to the present.” Request No. 26 seeks
documents or communications related “to Unis Company’s assumption of SB
Freight’s customers and/or business relationships.”
SB Freight responded to Nos. 5, 9,
10, and 12, “[a]fter a diligent search and reasonable inquiry, SB Freight is
not aware of any responsive documents… [and] does not believe that any
documents ever existed.” SB Freight also stated that no responsive documents
existed for No. 26. In response to No. 13 (re: bank accounts), SB Freight
identified only the Cathay Bank account. As discussed above, the evidence shows
that SB Freight has not fully identified its assets (including bank accounts),
customers, and business relationships, or its transfers of its assets,
customers, and business relationships. Given this, SB Freight’s responses to
these requests are incomplete.
Finally, Request
No. 19 seeks documents or communications related “to SB Freight’s relationship
to Unis Transportation LLC.” MD Transport states that SB Freight’s production
for this response was not bates stamped, which SB Freight does not dispute. SB
Freight must identify the documents produced “with the specific request number
to which the documents respond.” (Code Civ. Proc. § 2031.280, subd. (a).)
The motion
is therefore granted as to all Special Interrogatories and Requests for
Production at issue.
If a motion to compel response is
filed, the court shall impose a monetary sanction against the party who
unsuccessfully makes or opposes the motion absent substantial justification or
other reasons making the sanction unjust. (Code Civ. Proc., §§ 2030.300,
subd. (d); 2031.300, subd. (c).) “Although not
expressly included in the list of misuses in section 2023.010, courts have held
that ‘[o]ther sanctionable discovery abuses include providing false discovery responses…’ ”
(Kwan Software Engineering, Inc. v. Hennings (2020) 58 Cal.App.5th 57,
74.)
The Court
finds that monetary sanctions are warranted based on SB Freight’s evasive
responses and unsuccessful opposition. MD Transport requests sanctions in the
amount of $9,679.50, based on 23.9 hours to prepare the motion at an hourly
rate of $405. (Kluewer Decl. ¶ 23.) The requested sanctions are granted.