Judge: David A. Rosen, Case: EC065113, Date: 2023-02-17 Tentative Ruling
Case Number: EC065113 Hearing Date: February 17, 2023 Dept: E
Hearing Date: 02/17/2023 – 8:30am
Case No: EC065113
Trial Date: 06/05/2023
Case Name:
Complaint: INTEGRATED DYNAMIC SOLUTIONS, INC., a
California corporation v. AUTOMATED SYSTEMS AMERICA, INC., a Nevada
Corporation; JOHN T. STEELY, inidiv; DOES 1-25
Cross-Complaint: AUTOMATED SYSTEMS AMERICA, INC., a
Nevada Corporation v. INTEGRATED DYNAMIC SOLUTIONS, INC., a California
Corporation, and NASROLLAH GASHTILI, an indiv; and Roes 1-100
TENTATIVE
RULING ON MOTION TO COMPEL FURTHER RESPONSES TO REQUESTS FOR PRODUCTION
Moving Party: Defendant/Cross-Complainant, Automated
Systems America, Inc. (ASAI)
Responding Party: No
Opposition submitted
Moving Papers: Notice of Motion/Motion; Separate
Statement; Proposed Order; Vescera Declaration
No Opposition papers submitted.
Notice of Non-Opposition submitted by ASAI.
Proof of Service Timely Filed (CRC Rule 3.1300): Ok
16/21 Court Days Lapsed (CCP 1005(b)): Ok
Proper Address: Yes and No
– ASAI served this motion on Plaintiff’s counsel both by mail and by electronic
service. The electronic service address that ASAI used for Plaintiff’s counsel appears
to be correct – both the proof of service and eCourt listed Plaintiff’s
counsel’s email address as “rob.phillips@fisherbroyles.com”. However, the
mailing address that the proof of service lists for Plaintiff’s counsel is
different than the mailing address that the Court has on file in eCourt. The
mailing address on the proof of service lists 145 S. Fairfax Ave., Floor 2, Los
Angeles, CA 90036. However, the mailing address on eCourt for Plaintiff is
listed as 5670 Wilshire Blvd., Suite 1800, Los Angeles, CA 90036
RELIEF REQUESTED
Defendant/Cross-Complainant,
Automated Systems America, Inc. (ASAI) moves this Court for an order compelling
Plaintiff/Cross-Defendant Integrated Dynamic Solutions, Inc. (IDS) to provide
further verified responses and to produce all responsive documents to Requests
for Production of Documents, Set Two, Nos. 68, 71, 72, 75, and 76, without
objections within twenty days of the Court ruling on this motion.
ASAI seeks this Order on
the grounds that there is good cause to compel Plaintiff to provide further
verified responses and to produce documents because: (i) the requests at issue
seek documents that are directly relevant to the claims in both the Complaint
and the First Amended Cross-Complaint; and (ii) Plaintiff’s third supplemental
responses to the requests at issue are simply not Code compliant, but rather,
are evasive, incomplete and contain numerous improper ambiguities.
Further, ASAI seeks an
award of sanctions in favor of ASAI and against Plaintiff in the amount of
Eleven Thousand Six Hundred Dollars ($11,600.00) because Plaintiff’s refusal to
provide Code compliant responses to basic requests for production—which are an
authorized method of discovery—is a sanctionable misuse of the discovery
process.
BACKGROUND
This
case arises from claims by Plaintiff , IDS, that Defendant, ASAI, breached a
contract that was entered into by ASAI and Plaintiff on or about September 17,
2009 (the 2009 Agreement). (Def. Mot. p.1.) Specifically, Plaintiff claims that
ASAI failed to pay it all the monies it was entitled to pursuant to the terms
of the 2009 Agreement. (Def. Mot. p.1.)
On or about March 14,
2016, IDS filed its Complaint against ASAI for (1) Breach of Contract; (2)
Intentional Fraudulent Misrepresentation; (3) Negligent Misrepresentation; (4)
Accounting; (5) Declaratory Relief; (6) Unjust Enrichment; and (7) Conversion
(the “Complaint”). (Decl. Vescera ¶4.) On or about August 10, 2016, ASAI filed
a First Amended Cross-Complaint (“FACC”) against IDS and IDS’ owner, Defendant
Nasrollah Gashtili (Gashtili), for (1) Breach of the 2009 Agreement; (2) Breach
of the 2014 Agreement; (3) Fraud; (4) Negligent Misrepresentation; (5)
Declaratory Relief; (6) Unjust Enrichment; and (7) Conversion. [Gashtili has
since been dismissed as an individual defendant.] (Decl. Vescera ¶5.)
[ASAI’s Separate
Statement notes how Plaintiff has dismissed four of the seven causes of action
in the Complaint and that the only remaining causes of action are for breach of
contract, accounting, and declaratory relief. (See Def. Sep. Stmt. p. 5.)]
The parties began
exchanging written discovery in this action in or around October 2016. (Decl.
Vescera ¶6.) IDS filed for bankruptcy on or about August 22, 2018, and that
bankruptcy resulted in this action being stayed from in or around the fall of 2018
until on or about April 8, 2021. (Decl. Vescera ¶8.)
On or about May 19,
2022—after the stay was lifted—ASAI propounded a second (2nd) set of RPDs.
(Decl. Vescera ¶9.) On or about June 27, 2022, IDS served its initial responses
to ASAI’s second (2nd) set of RPDs, which ASAI alleges were inadequate. (Decl.
Vescera ¶10.) On or about July 25, 2022, IDS provided its first set of
supplemental responses; however, ASAI alleges these responses were still
substantively and procedurally inadequate. (Decl. Vescera ¶12.) ASAI alleges
that certain documents were not produced that IDS previously agreed to provide.
(Decl. Vescera ¶12.)
On or around September
13, 2022, IDS served a second (2nd) set of supplemental responses to
ASAI’s RPD’s, Set Two. (Decl. Vescera ¶14.) ASAI alleges that these second
supplemental responses remained inadequate and did not initially include
verifications. (Id.) On Or around October 3, 2022, IDS provided
verifications. (Id.) On September 28, 2022, ASAI sent IDS a third meet
and confer letter regarding the remaining deficiencies in IDS’s second
supplemental responses to RPD’s, Set Two. (Decl. Vescera ¶15.) Specifically,
ASAI requested that IDS provide a third (3rd) set of verified
supplemental responses RPD’s, Set Two, Nos. 68, 71, 72, 75, and 76. (Id.)
On October 24, 2022, IDS
provided supplemental responses to ASAI’s second set of RPD’s labeled as IDS’s
“third supplemental responses.” (Decl. Vescera ¶16.) However, ASAI alleges that
these responses did not supplement any of the requests at issue. (Id.)
On November 3, 2022, IDS
provided another set of supplemental responses to ASAI’s RPD’s, Set Two, which
were labeled again as IDS’s “third supplemental responses.” (Decl. Vescera
¶18.) [ASAI notes that it
is unclear whether the “third supplemental responses” to ASAI’s RPD’s, Set Two,
served on November 3, 2022 should be considered as IDS’s fourth supplemental
responses or amended third supplemental responses intended to replace the
responses served on October 24, 2022. ASAI notes that for purposes of this
motion, clarity, and the declaration, ASAI will consider the responses served
by IDS on November 3, 2022 to ASAI’s RPD’s Set Two, to be IDS’s third supplemental responses. (Id.)]
No verifications were initially provided for these responses. (Id.)
On November 14, 2022,
ASAI sent IDS a fourth meet and confer letter regarding the unremedied
deficiencies in IDS’s responses to RPD’s, Set Two, Nos. 68, 71, 72, 75, and 76. (Decl. Vescera ¶19.) ASAI
requested that IDS provide a fourth set of supplemental verified responses
accordingly by no later than November 23, 2022 in order to avoid ASAI bringing
this motion. (Id.) ASAI also requested that IDS provide verifications
for the responses served on October 24, 2022 and November 3, 2022 by that
deadline. (Id.)
To
date, IDS has not provided a fourth set of verified supplemental responses or otherwise
directly responded to ASAI’s November 14, 2022 meet and confer letter. (Decl.
Vescera ¶20.) Additionally, it was not until December 9, 2022 that ASAI
received verifications from IDS for the discovery responses served on October
24, 2022 and November 3, 2022. (Id.)
PROCEDURAL
45 Days
Unless
notice of this motion is given within 45 days of the service of the verified
response, or any supplemental verified response, or on or before any specific
later date to which the demanding party and the responding party have agreed in
writing, the demanding party waives any right to compel a further response to
the demand. (CCP §2031.310(c).)
Here, in Exhibit 20, Plaintiff’s counsel agreed to
extend ASAI’s deadline to file the motion to compel further responses to IDS’s
third supplemental responses to RPD’s to
December 22, 2022. (Decl. Vescera ¶21, Ex. 20.) Since the instant motion was
filed and served on 12/21/2022, it is thus timely.
Meet and Confer
“The
motion shall be accompanied by a meet and confer declaration under Section
2016.040.” (CCP §2031.310(b)(2).)
On November 14, 2022, ASAI sent IDS a fourth meet and
confer regarding the unremedied deficiencies in IDS’s responses to RPD’s, Set
Two, Nos. 68, 71, 72, 75, and 76. (Decl. Vescera ¶19, Ex. 19.) ASAI requested
that IDS provide a fourth set of supplemental verified responses accordingly by
no later than November 23, 2022 in order to avoid ASAI bringing this motion. (Id.)
LEGAL STANDARD – COMPEL FURTHER – REQUESTS
FOR PRODUCTION
Under §2031.210, the party to
whom a demand for inspection, copying, testing, or sampling has been directed
shall respond separately to each item or category of item by any of the
following:
(1)¿A statement that the party
will comply with the particular demand for inspection, copying, testing, or
sampling by the date set for the inspection, copying, testing, or sampling
pursuant to paragraph (2) of subdivision I of Section 2031.030 and any related
activities.
(2)¿A representation that the
party lacks the ability to comply with the demand for inspection, copying,
testing, or sampling of a particular item or category of item.
(3)¿An objection to the
particular demand for inspection, copying, testing, or sampling.
(CCP §2031.210(a).)
Under Code of Civil Procedure section 2031.310(a),
the Court may order a responding party to serve a further response to a
request for production when the Court finds that any of the following
apply:
Unlike with requests to compel further
interrogatories, a moving party seeking to compel further responses for
requests for production must show good cause along with satisfaction of the
meet and confer requirement. (CCP§ 2031.310(b.) “Good cause” is
shown when a moving party provides sufficient facts that the requests are
relevant. (Kirkland v. Superior Court (2002) 95 Cal.App.4th
92, 97.)
ANLAYSIS
RPD 68
PRODUCE
all DOCUMENTS which support YOUR breach of contract allegations against ASAI.
Original Response to RPD 68
To the extent they exist, DOCMENTS
will be produced responsive to this Request.
First Supplemental Response to RPD 68
To
the extent they exist, DOCMENTS will be produced responsive to this Request.
Second Supplemental Response to RPD 68
To
the extent they exist, DOCMENTS will be produced responsive to this Request. See
documents bates labeled ASAI_7601-ASAI_7678.
Third Supplemental Response to RPD 68
To
the extent they exist, DOCUMENTS will be produced responsive to this Request.
See documents bates labeled ASAI_7601-ASAI_7678.
TENTATIVE RULING RPD 68
Defendant
has demonstrated good cause for the instant request by explaining how documents
that support Plaintiff’s breach of contract allegations against ASAI are
directly relevant because one of the remaining causes of action in the
Complaint is for breach of contract, and the requested documents would assist
ASAI in evaluating the issues of damages and liability.
Further, Plaintiff’s response is not code complaint.
It is unclear if the requested documents exist, it is unclear if the documents
have been produced, and it is unclear what Plaintiff’s reference to “See
documents bates labeled ASAI_7601-ASAI_7678,” is referring to. It is unclear if
this response is a statement of compliance, or if this response is a
representation of inability to comply. The response is evasive and inadequate.
Under §2031.210, the party to
whom a demand for inspection, copying, testing, or sampling has been directed
shall respond separately to each item or category of item by any of the
following:
(1)¿A statement that the party
will comply with the particular demand for inspection, copying, testing, or
sampling by the date set for the inspection, copying, testing, or sampling
pursuant to paragraph (2) of subdivision I of Section 2031.030 and any related
activities.
(2)¿A representation that the
party lacks the ability to comply with the demand for inspection, copying,
testing, or sampling of a particular item or category of item.
(3)¿An objection to the
particular demand for inspection, copying, testing, or sampling.
(CCP §2031.210(a).)
A statement that the party to whom a demand for
inspection, copying, testing, or sampling has been directed will comply with
the particular demand shall state that the production, inspection, copying,
testing, or sampling, and related activity demanded, will be allowed either in
whole or in part, and that all documents or things in the demanded category
that are in the possession, custody, or control of that party and to which no
objection is being made will be included in the production. (CCP §2031.220.)
A representation of inability to comply with the
particular demand for inspection, copying, testing, or sampling shall affirm
that a diligent search and a reasonable inquiry has been made in an effort to
comply with that demand. This statement shall also specify whether the
inability to comply is because the particular item or category has never
existed, has been destroyed, has been lost, misplaced, or stolen, or has never
been, or is no longer, in the possession, custody, or control of the responding
party. The statement shall set forth the name and address of any natural person
or organization known or believed by that party to have possession, custody, or
control of that item or category of item.
Further, CCP §2031.240 describes what Plaintiff is to
do if only part of an item or category of item in a demand is objectionable.
Plaintiff did not provide code compliant responses. Defendant’s motion to compel further responses to RPD 68
is GRANTED and Plaintiff is ordered to provide verified, code compliant further
responses without objections within 20 days of the ruling on this motion.
RPD 71
PRODUCE
all DOCUMENTS that demonstrate whether YOUR CAS system was compliant with CARD
ASSOCIATION RULES.
Original Response to RPD 71
To the extent they exist, DOCMENTS will
be produced responsive to this Request.
First Supplemental Response to RPD 71
To
the extent they exist, DOCMENTS will be produced responsive to this Request.
Second Supplemental Response to RPD 71
To
the extent they exist, DOCMENTS will be produced responsive to this Request. After
a diligent search and reasonable inquiry have been made to find the documents,
no such documents exist. Documents bates labeled IDS 62415 – IDS 62429 produced
herewith include references to PCI matters between the parties.
Third Supplemental Response to RPD 71
To
the extent they exist, DOCMENTS will be produced responsive to this Request.
After a diligent search and reasonable inquiry have been made to find the
documents, no such documents exist. Documents bates labeled IDS 62415-IDS
62429 produced herewith include references to PCI matters between the parties.
TENTATIVE RULING RPD 71
Defendant
has demonstrated good cause as to the relevance of the instant request.
Defendant states that these documents relate to ASAI’s claims alleged in the
FACC because ASAI alleged that Plaintiff misrepresented to ASAI “that the CAS
system was compliant with all Card Association rules and PCI requirements”;
failed to “monitor and maintain the CAS system so that it was compliant with
Card Association rules and PCI complaint[sic]”; intentionally and negligently
misrepresented that the “CAS system complied with the Card Association’s rules
and regulations and the CAS system was PCI complaint [sic].”
Further, Plaintiff did not provide a code compliant
response because Plaintiff did not state it will comply, nor did Plaintiff make
a representation that the party lacks the ability to comply. It is unclear if
this response is a statement of compliance or a representation of inability to
comply.
Defendant’s motion to compel further responses to RPD 71
is GRANTED and Plaintiff is ordered to provide verified, code compliant further
responses without objections within 20 days of the ruling on this motion.
RPD 72
PRODUCE
all DOCUMENTS that demonstrate whether YOUR CAS system was PCI COMPLIANT.
Original Response to RPD 72
To
the extent they exist, DOCMENTS will be produced responsive to this Request.
First Supplemental Response to RPD 72
To
the extent they exist, DOCMENTS will be produced responsive to this Request.
Second Supplemental Response to RPD 72
To
the extent they exist, DOCMENTS will be produced responsive to this Request. After
a diligent search and reasonable inquiry have been made to find the documents,
no such documents exist. Documents bates labeled IDS 62415 – IDS 62429 produced
herewith include references to PCI matters between the parties.
Third Supplemental Response to RPD 72
To
the extent they exist, DOCMENTS will be produced responsive to this Request.
After a diligent search and reasonable inquiry have been made to find the
documents, no such documents exist. Documents baes labeled IDS 62415 - IDS
62429 produced herewith include references to PCI matters between the parties.
Tentative Ruling RPD 72
Defendant
has demonstrated good cause as to how the instant request is relevant.
Defendant states that these documents are relevant to ASAI’s claims alleged in
the FACC because ASAI alleged that Plaintiff misrepresented to ASAI “that the
CAS system was compliant with all Card Association rules and PCI requirements”;
failed to “monitor and maintain the CAS system so that it was compliant with
Card Association rules and PCI complaint[sic]”; intentionally and negligently
misrepresented that the “CAS system complied with the Card Association’s rules
and regulations and the CAS system was PCI complaint[sic].”
Further, Plaintiff did not provide a code compliant
response because Plaintiff did not state it will comply, nor did Plaintiff make
a representation that the party lacks the ability to comply. It is unclear if
this response is a statement of compliance or a representation of inability to
comply.
RPD 75
PRODUCE
all financial records memorializing YOUR expenses relating to the 2009
AGREEMENT, including, but not limited to, invoices, receipts, and profits and
loss statements.
Original Response to RPD
75
This request is
directed to irrelevant information and unduly burdensome to Plaintiff/Cross-Defendant.
As a result, no documents will be produced responsive to this request.
First
Supplemental Response to RPD 75
This
request is directed to irrelevant information and unduly burdensome to
Plaintiff/Cross-Defendant.
Second
Supplemental Response to RPD 75
This
request is directed to irrelevant information and unduly burdensome to
Plaintiff/Cross-Defendant.
Third
Supplemental Response to RPD 75
This
request is directed to irrelevant information and unduly burdensome to
Plaintiff/Cross-Defendant. IDS did not maintain financial records or expense
records attributable to the 2009 Agreement.
Tentative Ruling RPD 75
Defendant
established good cause as to the relevance of the instant request by explaining
how the financial records sought in RPD 75 will aid ASAI in determining the
amount of profits Plaintiff received under the 2009 agreement. Further,
Defendant states the documents are relevant to liability and damages because
ASAI claims that Plaintiff was overpaid pursuant to the 2009 and 2014 Agreement
and that Plaintiff made certain misrepresentations with respect to each, and
conversely, Plaintiff alleges it was underpaid pursuant to the 2009 and 2014
Agreement.
Further, Plaintiff’s objections as to irrelevancy and
undue burden are without merit. As previously stated, the request is clearly
reasonably calculated to lead to the discovery of admissible evidence. As to
undue burden, the request is limited to financial records related to the 2009
Agreement and doesn’t seek records for an indefinite period of time.
Further, Plaintiff’s response is not code compliant.
Plaintiff doesn’t state whether it will comply, nor does Plaintiff represent
that it lacks the ability to comply. It is unclear how Plaintiff is responding.
CCP 2031.230 describes what should be contained in a response if Plaintiff is
stating a representation of an inability to comply.
Defendant’s motion to compel further responses to RPD 75
is GRANTED and Plaintiff is ordered to provide verified, code compliant further
responses without objections within 20 days of the ruling on this motion.
RPD 76
PRODUCE
all financial records memorializing YOUR expenses relating to the 2014
AGREEMENT, including, but not limited to, invoices, receipts, and profits and
loss statements.
Original Response to RPD 76
This
request is directed to irrelevant information and unduly burdensome to
Plaintiff/Cross-Defendant. As a result, no documents will be produced
responsive to this request.
First Supplemental Response to RPD 76
This
request is directed to irrelevant information and unduly burdensome to
Plaintiff/Cross-Defendant. As a result, no documents will be produced
responsive to this request.
Second Supplemental Response to RPD 76
This
request is directed to irrelevant information and unduly burdensome to
Plaintiff/Cross-Defendant. As a result, no documents will be produced
responsive to this request.
Third Supplemental Response to RPD 76
This
request is directed to irrelevant information and unduly burdensome to
Plaintiff/Cross-Defendant. As a result, no documents will be produced
responsive to this request. IDS did not maintain financial records or
expense records attributable to the 2014 Agreement.
Tentative Ruling RPD 76
Defendant established good cause as to the relevancy of the instant request
by explaining how the financial records sought in RPD 76 will aid ASAI in
determining the amount of profits Plaintiff received under the 2014 agreement.
Further, Defendant states the documents are relevant to liability and damages
because ASAI claims that Plaintiff was overpaid pursuant to the 2009 and 2014
Agreement and that Plaintiff made certain misrepresentations with respect to
each, and conversely, Plaintiff alleges it was underpaid pursuant to the 2009
and 2014 Agreement.
Further, Plaintiff’s objections as to irrelevancy and
undue burden are without merit. As previously stated, the request is relevant.
As to undue burden, the request is limited to financial records related to the
2014 Agreement and doesn’t seek records for an indefinite period of time.
Further, Plaintiff’s response is not code compliant. Plaintiff’s
response is unclear. If no documents are being produced because Plaintiff finds
the request irrelevant and unduly burdensome, those objections are without
merit. Further, Plaintiff did not
provide a code compliant response pursuant to 2031.210(a). Further, if
Plaintiff is attempting to represent the inability to comply, Plaintiff must follow
the requirements of 2031.230.
Tentative Ruling
Defendant’s motion to compel further responses to RPD,
Set Two, Nos. 68, 71, 72, 75, and 76 is GRANTED and Plaintiff is ordered to
provide verified, code compliant further responses without objection within 20
days of the ruling on this motion.
SANCTIONS
Except
as provided in subdivision (j), the court shall impose a monetary sanction
under Chapter 7 (commencing with Section 2023.010) against any party, person,
or attorney who unsuccessfully makes or opposes a motion to compel further
response to a demand, unless it finds that the one subject to the sanction
acted with substantial justification or that other circumstances make the
imposition of the sanction unjust. (CCP §2031.310(h).)
Here, Defendant’s counsel requests sanctions in the
amount of $11,600.00 in favor of ASAI and against Plaintiff. Defendant’s
counsel arrives at the $11,600.00 request as follows: (1) Hourly rate of
$400/hour; (2) 18 hours preparing the motion, supporting documents, and
separate statement; (3) Anticipated three hours reviewing and analyzing any
Opposition; (4) Five hours preparing a reply brief; (5) Three hours preparing
for an attending the hearing on the motion.
Therefore, Defendant’s counsel expects to spend 29
hours in total related to this motion.
The Court awards Movant/Defendant reasonable discovery
sanctions of $6,800.00 (17 total hours at $400- per hour, as there was no
opposition and no detailed Reply) 17 total hours is a reasonable amount of time
to spend on this Motion. These sanctions
are awarded against Plaintiff and its counsel of record, jointly and severally,
and are to be paid on or before March 17, 2023.