Judge: Cynthia A Freeland, Case: 37-2023-00024754-CU-FR-NC, Date: 2024-02-29 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - February 08, 2024

02/09/2024  01:30:00 PM  N-27 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Cynthia A. Freeland

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Civil - Unlimited  Fraud Motion Hearing (Civil) 37-2023-00024754-CU-FR-NC SCHOENFELD VS DOHERTY [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion for Sanctions, 10/20/2023

Plaintiff Richard B. Schoenfeld ('Plaintiff')'s motion for terminating sanctions or, in the alternative, issue sanctions, and for monetary sanctions, is granted in part and denied in part.

As an initial matter, the court notes that Defendant Andrea Nicole Doherty, individually and doing business as CPR Class Sales, CPR Classic Restorations, and California Porsche Restorations (collectively, 'Defendant')'s opposition was untimely. California Code of Civil Procedure § 1005(b) provides in relevant part that '[a]ll papers opposing a motion so noticed shall be filed with the court and a copy served on each party at least nine court days . . . before the hearing.' Cal. Code Civ. P. § 1005(b).

In this case, with a February 9, 2024 hearing date, Defendant needed to have filed and served her opposition by no later than January 29, 2024. She did not do so until January 30, 2024 – one day late.

On that basis, the court could disregard Defendant's opposition and treat the motion as unopposed. See Cal. R. Ct. 3.1300(d). In this instance, however, the court will consider Defendant's opposition given that Plaintiff has not demonstrated any resulting prejudice. See Correia v. NB Baker Electric, Inc. (2019) 32 Cal. App. 5th 602, 613 ('[R]eviewing courts have long held trial courts are authorized to consider late-filed opposition papers for good cause and if there is no undue prejudice to the moving party.').

Defendant is on notice that future failures to file and serve her papers timely in accordance with the California Code of Civil Procedure and California Rules of Court may not result in the same treatment.

The court maintains broad discretion in determining an appropriate sanction for misuse of the discovery process. See Lopez v. Watchtower Bible & Tract Society of New York (2016) 246 Cal. App. 4th 566, 604.

In so doing, the court 'should consider both the conduct being sanctioned and its effect on the party seeking discovery and, in choosing a sanction, should attempt to tailor the sanction to the harm caused by the withheld discovery.' Van Sickle v. Gilbert (2011) 196 Cal. App. 4th 1495, 1516 (internal quotation omitted). The discovery statutes prescribe an incremental approach to sanctions. 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. If a lesser sanction fails to curb misuse, a greater sanction is warranted: continuing misuses of the discovery process warrant incrementally harsher sanctions until the sanction is reached that will curb the abuse.' Doppes v. Bentley Motors, Inc. (2009) 174 Cal. App. 4th 967, 992. In addition, if a party fails to obey an order compelling his or her attendance, testimony, and/or production of documents at a deposition, 'the court may make those orders that are just, including the imposition of an issue sanction, an evidence sanction, or a terminating sanction under Chapter 7 (commencing with Section 2023.010) against that party deponent or against the party with whom the deponent is affiliated. In lieu of, or in addition to, this sanction, the court may impose a monetary sanction under Chapter 7 (commencing with Section 2023.010) against that deponent or against the party with whom that party deponent is affiliated, and in favor of any party who, in person or Calendar No.: Event ID:  TENTATIVE RULINGS

3039552 CASE NUMBER: CASE TITLE:  SCHOENFELD VS DOHERTY [IMAGED]  37-2023-00024754-CU-FR-NC by attorney, attended in the expectation that the deponent's testimony would be taken pursuant to that order.' Cal. Code Civ. P. § 2025.450(h).

Terminating sanctions are generally regarded as a last resort to be applied sparingly. See Siry Investment, L.P. v. Farkhondehpour (2020) 45 Cal. App. 5th 1098, 1118. Before issuing terminating sanctions, the court should consider the totality of the circumstances, including: (1) whether the respondent's conduct was willful; (2) the detriment to the propounding party; (3) the number of formal and informal attempts to obtain the discovery; (4) whether the respondent has a history of discovery abuses; and (5) whether the respondent's noncompliance persisted despite previous court orders or warnings that greater sanctions might follow. Ibid. at 1117-1118; Lang v. Hochman (2000) 77 Cal. App. 4th 1225, 1246. See also Milekowsky v. Tenet Healthsystem (2005) 128 Cal. App. 4th 262, 279-280 ('[W]here 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.').

The court finds that terminating sanctions are not yet appropriate under the totality of the facts and circumstances. On June 12, 2023, Plaintiff commenced this action by filing a Complaint against Defendant and others. See ROA No. 1. On June 20, 2023, the court issued a right to attach order, an order for issuance of writ of attachment, and a temporary protective order ('TPO'). See ROA Nos. 19-21.

On June 26, 2023, Plaintiff personally served Defendant with the summons, Complaint, and TPO. See ROA No. 26. On August 15, 2023, Plaintiff electronically served Defendant with a Notice of Taking Deposition of Defendant Andrea Doherty Pursuant to CCP § 485.230 and Demand for Production of Documents (the 'Notice of Deposition'), noticing Defendant's deposition for August 30, 2023. Defendant did not object to the Notice of Deposition or appear at her deposition with the requested documents. On September 7, 2023, Plaintiff filed an amended motion to compel Defendant to appear at her deposition and produce the documents specified in the Notice of Deposition, and for an award of monetary sanctions (the 'Motion to Compel'). See ROA No. 48. Defendant did not file a written opposition to the Motion to Compel. On October 6, 2023, the court granted the Motion to Compel and: (1) directed Defendant to attend her deposition and produce the documents identified in the Notice of Deposition at a date/time/place within 10 days of the hearing, and (2) awarded Plaintiff $1,932.50 in sanctions against Defendant, due within 30 days of the hearing (the 'Discovery Order'). See ROA No. 65; Kirk Decl., Ex. A. On October 6, 2023, Plaintiff's counsel e-mailed Defendant's counsel requesting available deposition dates to occur within the 10-day period specified in the Discovery Order. See Kirk Decl., Ex. B. On October 9, 2023, Plaintiff electronically served Defendant with a First Amended Notice of Taking Deposition of Defendant Andrea Doherty Pursuant to CCP § 485.230 and Demand for Production of Documents Pursuant to Order of the Court (the 'Amended Notice of Deposition'), noticing Defendant's deposition for October 13, 2023. Ibid., Ex. C. Defendant did not appear at her October 13, 2023 deposition. Nor has she complied with the Discovery Order to date.

Based on the foregoing, it is clear that Defendant misused the discovery process by failing to: (1) respond to the Notice of Deposition, and (2) comply with the Discovery Order, inclusive of sitting for her rescheduled deposition on October 13, 2023. Defendant's conduct has impeded Plaintiff's ability to obtain relevant discovery and prepare for trial. However, Defendant does not have an extensive history of discovery abuses – indeed, while she clearly flouted Plaintiff's attempts to have Defendant sit for her deposition, the Discovery Order is the only identified court order that Defendant violated. While Plaintiff notes in his moving and reply papers that Defendant's entire family has flouted their discovery obligations, the conduct of Defendant's family is not germane to the court's analysis of whether terminating sanctions are warranted against Defendant. Moreover, there is insufficient evidence that Defendant's conduct was willful, i.e., that she consciously or intentionally failed to act. See Sauer v. Sup.

Ct. (1987) 195 Cal. App. 3d 213, 227-228. Indeed, Defendant's explanation for why she was unable to sit for her deposition at any point between August and October 2023, i.e., the around-the-clock care for her grandfather as well as her own health issues, is sufficient to avoid a finding that Defendant willfully violated the Discovery Order. See Doherty Decl., ¶¶ 2-4. Accordingly, Plaintiff's request for terminating sanctions is denied.

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3039552 CASE NUMBER: CASE TITLE:  SCHOENFELD VS DOHERTY [IMAGED]  37-2023-00024754-CU-FR-NC The court, however, does find that issue sanctions are appropriate under the circumstances. The evidence shows that monetary sanctions were plainly insufficient to compel Defendant's compliance with the Discovery Order. Indeed, the court, in issuing the Discovery Order, sanctioned Defendant in the amount of $1,932.50. To date, there is no evidence that Defendant has satisfied the monetary or any other aspect of the Discovery Order. Defendant, in her opposition, does not address Plaintiff's request for issue sanctions. The court construes this as Defendant's concession of the merits of that request.

See San Diego Rules of Court, Rule 2.1.19.B. Moreover, Defendant's arguments are unavailing. To start, Defendant provides no evidence – not even a declaration from counsel – supporting her contention that Plaintiff's counsel has been uncompromising in terms of the manner in which the deposition is to be conducted. The only evidence before the court demonstrates that: (1) Defendant did not respond to the Notice of Deposition; (2) Defendant did not oppose the Motion to Compel; (3) Defendant's counsel did not respond to Plaintiff's request for available deposition dates after the hearing on the Motion to Compel; (4) Defendant did not attend her October 13, 2023 rescheduled deposition; and (5) Defendant has failed to comply with the Discovery Order to date. To the extent Defendant argues that she should be permitted to complete her deposition via Zoom or other electronic means, such contention is not well taken. Plaintiff was within his right to request an in-person oral deposition of any person, including any party to the action. See Cal. Code Civ. P. §§ 2025.010, 2025.250(a), 2025.270(a). If it truly was impossible for Defendant to attend her deposition in person, then she could have availed herself of various remedies under the Civil Discovery Act, inclusive of seeking a protective order. She failed to do so.

Based on the foregoing, the court imposes issue sanctions establishing the following: (1) Plaintiff was the registered and legal owner of the subject 1958 Porsche 356 T-2 Speedster, Serial No. 83917 (the 'Porsche') which at the time of the allegations set forth in the Complaint had a fair market value of at least $500,000.00; (2) On or about August 3, 2021, Plaintiff and Defendant entered into a written Consignment Agreement wherein Defendant agreed to sell on consignment the Porsche for the net sale price of $500,000.00; (3) Defendant owed Plaintiff a fiduciary duty under California law and the Consignment Agreement; (4) after the execution of the Consignment Agreement, Defendant picked up the Porsche and shipped it to her place of business in Fallbrook, California to hold in trust for the purpose of offering the Porsche for sale on consignment; (5) Defendant, unbeknownst to Plaintiff, sold the Porsche and collected $535,000.00 in sale proceeds on January 24, 2022 (the 'Sale Proceeds'); (6) Defendant deposited the Sale Proceeds into her Chase account ending in -5522 and kept the Sale Proceeds for her own personal use and benefit; (7) Defendant concealed from Plaintiff that she had sold the Porsche and continued to represent to Plaintiff that she had been unable to find a buyer, all of which was in breach of the Consignment Agreement; (8) Defendant's conduct was in breach of her fiduciary obligations to Plaintiff; and (9) Plaintiff qualifies as an 'elder' under California Welfare and Institutions Code ('WIC') § 15610.30.

To the extent Plaintiff seeks an issue sanction establishing that Defendant's conduct: (1) constitutes conversion or financial elder abuse, or (2) warrants treble damages and attorney's fees under California Penal Code ('CPC') § 496(c), that request is denied. Defendant's willful conduct with regard to her discovery abuses and/or other aspects of Plaintiff's case-in-chief is different from the conduct Plaintiff must establish to prove conversion or financial elder abuse, or to obtain the damages available under CPC § 496(c). For instance, to prevail on his conversion claim, Plaintiff must establish that Defendant intentionally deprived him of the Sale Proceeds. See, e.g., Voris v. Lampert (2019) 7 Cal. 5th 1141.

Similarly, to establish financial elder abuse under WIC § 15610.30, Plaintiff must show that Defendant took, secreted, appropriated, obtained, or retained the Porsche and/or Sale Proceeds for a wrongful use (i.e., Defendant knew or should have known that her conduct was likely to be harmful to Plaintiff) or with an intent to defraud, or both. See Cal. Welf. & Inst. Code §§ 15610.30(a), (b). Furthermore, to obtain treble damages and attorney's fees under CPC § 496(c), Plaintiff must prove that Defendant obtained the Porsche and/or Sale Proceeds with knowledge that she had obtained the property in a manner constituting theft or extortion. See Cal. Pen. Code § 496(a); Siry Investment, L.P. v. Farkhondehpour (2022) 13 Cal. 5th 333, 355. Additionally, to the extent that Plaintiff seeks an issue sanction establishing that Defendant distributed the sale proceeds from her Chase account ending in -5522 to Victoria Doherty, Dylan Doherty, LeMans Classics, LLC, and the Doherty Family Trust, the court declines Calendar No.: Event ID:  TENTATIVE RULINGS

3039552 CASE NUMBER: CASE TITLE:  SCHOENFELD VS DOHERTY [IMAGED]  37-2023-00024754-CU-FR-NC Plaintiff's request. Such a sanction necessarily would adversely affect third parties who should have an opportunity to defend themselves.

In light of the foregoing, the court: (1) denies Plaintiff's request for terminating sanctions; (2) imposes issue sanctions against Defendant as set forth herein; and (3) awards Plaintiff $3,002.50 in monetary sanctions against Defendant, due within thirty (30) days of this hearing. The court places Defendant on notice that further misuses of the discovery process and/or her continued failure to participate in discovery in good faith will result in more severe sanctions in the future, inclusive of terminating sanctions.

This is the tentative ruling for the hearing at 1:30 p.m. on Friday, February 9, 2024. If no party appears at the hearing, this tentative ruling will become the order of the court as of February 9, 2024. If the parties are satisfied with the court's tentative ruling or do not otherwise wish to argue the motion, they are encouraged to give notice to the court and each other of their intention not to appear, though this notice is not required.

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