Judge Christian R. Gullon, Case Number: 22PSCV01630, Date: 2024-04-16 Tentative Ruling

Judge: Christian R. Gullon, Case: 22PSCV01630, Date: 2024-04-16 Tentative Ruling

The Court may change tentative rulings at any time. Therefore, attorneys are advised to check this website to determine if any changes or updates have been made to the tentative ruling.

Counsel may submit on the tentative rulings by calling the clerk in Dept. O at 909-802-1126 before 8:30 the morning of the hearing. Submission on the tentative does not bind the court to adopt the tentative ruling at the hearing should the opposing party appear and convince the court of further modification during oral argument.

The Tentative Ruling is not an invitation, nor an opportunity, to file any further documents relative to the hearing in question. No such filing will be considered by the Court in the absence of permission first obtained following ex-parte application therefore.

(1) MOTION AND MOTION TO COMPEL FURTHER RESPONSES TO DEFENDANT SUNSHINE EDUCATION ACADEMY’S FORM INTERROGATORIES SET NO. ONE AND REQUEST FOR MONETARY SANCTIONS is GRANTED.

(2) MOTION AND MOTION TO COMPEL FURTHER RESPONSES TO DEFENDANTS WENYING SUN AND SUNSHINE EDUCATION ACADEMY’S REQUEST FOR PRODUCTION OF DOCYUMENTS SET NO. ONE AND REQUEST FOR MONETARY SANCTIONS is GRANTED.

Documents and complete responses to interrogatories are to be produced within 30 days of this order. Monetary sanctions are TBD.

This case arises from a partnership dispute. Plaintiff DONGYI (USA) TRADING GROUP, INC. alleges the following against Defendant SUNSHINE EDUCATION ACADEMY (corporation) (“Defendant Sunshine”) and Wenying Sun: Plaintiff was established in 2017 and it later determined to invest an education business in Southern California. In November 2018, Plaintiff and Defendant Sunshine entered into an Investment Agreement whereby Plaintiff agreed to invest $200,000 in Defendant Sunshine for 51% its shares; Sun (CEO and General Manager of Sunshine) is a 49% shareholder of Sunshine. In 2022, Plaintiff requested Defendants to provide certain financial documents of Sunshine because Plaintiff was preparing a non-immigration petition for its owner to enter the United States. However, Defendant Sun had refused to produce them.

On August 16, 2023, Plaintiff filed amendments to the complaint/fictitious/incorrect name naming the following defendants: US Sunshine International Group, a California corporation, Sunshine Medias, Inc., a California corporation (Defendant), Sunshine Boarding School, a California corporation), World Celebrity Club, a California corporation, and World Federation Of Youth Literary Art, a California nonprofit corporation.

On November 30, 2023, the court discharged the Order to Show Cause Re: Plaintiffs Failure to Appear on October 4, 2023, and the Order to Show Cause Re: Why the Court Should not Dismiss this Case in its Entirety for Lack of Prosecution.

On January 31, 2024, the court conducted its IDC; there was no appearance by Defendants.[1]

On April 3, 2024, Defendant filed a ‘RESPONSE TO MOTION TO COMPEL FURTHER RESPONSES TQ FORM INTERROGATORIES AND MOTION TO COMPEL PRODUCTION OF DOCUMENTS.’

On April 9, 2024, Plaintiff filed a ‘DECLARATION IN RESPONSE TO DECLARATIONS OF JAMES ANDION REGARDING APPEARANCE ON 1/31/2024 & REGARDING MOTION TO COMPEL FURTHER RESPONSES’ and various exhibit lists.

- Any and all financial records, including but not limited to books, ledgers of YOURS from 2018 to present;

- Any and all business records RELATIING TO YOUR business transactions from 2018, including but not limited to the invoices, receipts of payments in any form such as cash, credit cards, checks, wire transfer, and etc;

- Any and all DOCUMENTS RELATING TO the use of Plaintiff’s investment funds in the amount of $200,000.

As to all, Defendants either responded that the documents will be provided or that Defendants have not yet located said documents, but they will subsequently be provided should they be found.

Here, the court agrees with Plaintiff that Defendants have made “without substantial justification, unmeritorious objections to discovery.” (C.C.P. section 2023.010(e).) After all, the requests are for business records, thus they are relevant, and they are documents within the control of Sun, who is the manager and controller of this company. If there is a person who knows the location of the documents or who knows of the person who has custody of the documents, it is Sun. As cited by Plaintiff, a party must make a good faith effort in obtaining documents responsive to the request (Regency Health Services, Inc. v. Superior Court (1998) 64 Cal.App.4th 1496), but here, there is no declaration that such preliminary efforts have been exercised. What is more, “a party cannot plead ignorance to information which can be obtained from sources under his control.” (Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 782.)

To the extent that Defense Counsel has filed a declaration, he explains that Sun “looks extremely ill” and thus because “she is not well,” he cannot produce the documents. (Andion Decl. pp. 1-2.) The court is unpersuaded. Though the court is sympathetic to any ailment Sun may have,[2] as noted by Plaintiff’s Counsel, Counsel Andion is not a medical doctor who can make an evaluation on Defendant Sun’s medical condition.

Thus, absent a medical note affirmatively concluding that Sun does not have the capacity whatsoever to participate in litigation (or lacks capacity to direct another party in locating the documents), Defendants are to produce the documents within 30 days of this order. Monetary sanctions will be determined at the conclusion of the hearing.[3]

As for the interrogatories, they seek, inter alia, the name, addresses, and telephone numbers of all persons who have knowledge of facts identified in the denial/affirmative defenses.

Defendants respond to each with the following: “Defendant's personnel did everything that was required by agreement between the parties. Defendant's personnel kept Plaintiff's principal, Guidong Gao, informed about all business developments, including the difficulties presented by the global pandemic. Defendant's personnel provided Mr. Gao or his attorneys with all information that he or his attorneys requested, and Defendant's personnel provided Mr. Gao or his attorneys with all documents that he or his attorneys requested.”

Here, as noted by Plaintiff, the responses are incomplete because they do not identify EACH denial and EACH special or affirmative defense in its responses and for EACH denial and defense, Defendants did not provide facts, witnesses and documents in support.

To the extent that Defendants have opposed the motion, their argument is the same as above: they “would be happy to provide further responses to form interrogatories” (Andion Decl, p. 2), but Counsel Andion is unable to due to Sun’s health. But even is Sun is gravely ill, responding to form interrogatories is one to be done by Counsel Andion and there is no declaration that Sun does not have the ability to speak to her attorney to provide him with the complete information.

Thus, the court orders complete responses to the form interrogatories within 30 days of this order. Monetary sanctions are TBD.

Counsel Andion takes issue with Plaintiff’s Counsel communicating with him via email instead of both email and US mail.

Plaintiff in Reply contends that Defense counsel’s use of electronic communications at the outset of litigation waives request for US mail.

As this matter does not require legal adjudication, the court encourages the parties to resolve this point on their own.

[1] According to counsel’s declaration filed on 2/20/24, he did not attend the 1/31/24 hearing because he “was under the impression” that should Plaintiff depose Sun, which Defendants agreed to, supplemental discovery responses would be unnecessary such that the IDC would be taken off calendar. According to Plaintiff’s Counsel’s declaration filed on 4/9/24, the agreement was contingent upon Defendants taking Plaintiff’s settlement offer, which they refused. In fact, after the conversation, Plaintiff’s Counsel filed the IDC brief with the court and served it upon Counsel Andion.

[2] According to Counsel Andion’s declaration, Sun “does not yet have a definitive diagnosis and medical treatment is ongoing.” (Andion Decl., p. 2.) She went to the emergency room on 2/23/24, which appears to be the same date of Sun’s scheduled deposition. While Defense Counsel may have provided Plaintiff’s Counsel with a copy of Sun’s medical records, it is not attached to his declaration.

[3] Plaintiff seeks an award of monetary sanctions against Defendant Sunshine and/or its counsel, Mr. James Andion, in the amount of $5,560.00 per motion (6 hours writing moving papers, 3 hours anticipated in reviewing and preparing a reply to the opposition, 2 hours traveling, $60 filing fee at $500/hour). Should sanctions be awarded, they will drastically reduced as the motions do not involve substantial legal analysis and largely consist of attachments.