Judge: Douglas W. Stern, Case: 22STCV08051, Date: 2023-03-17 Tentative Ruling
Case Number: 22STCV08051 Hearing Date: March 17, 2023 Dept: 68
Gavrieli Brands LLC vs. Empire Container Freight, Inc., Case No. 22STCV08051
Motion for Sanctions
Moving Party: Plaintiff Gavrieli Brands LLC
Responding Party: None
MOVING PARTY’S POSITION
In this Court’s Order of February 6, 2023 (Demurrer ruling) the Court observed:
“It is generally a poor practice to entirely ignore a motion filed against a party. At a minimum, the failure to file anything deprives the Court of the benefits of the view of the party.”
Once again Defendant/Cross-Complainant Empire Container Freight, Inc. has chosen to remain silent. This silence is in the face of a very significant discovery motion following its repetitive failure to voluntarily comply with its discovery obligations, followed by its failure to comply with numerous court orders on that discovery.
Plaintiff seeks issue and monetary sanctions against Defendant pursuant to CCP §§ 2023.010, 2023.030, 2023.040, 2030.290, 2031.300, 2033.280, and 128(a)(4). Plaintiff seeks sanctions against Defendant due to Defendant’s failure to respond to or comply with court-ordered discovery.
First, Plaintiff seeks issue sanctions designating facts established (#1-7) due to Defendant’s failure to provide Court-ordered responses to Plaintiff’s RFAs (originally served on July 20, 2022, and ordered by this Court to be responded to within 15 days on October 25, 2022) and Form Interrogatory 17.1 (originally served on July 20, 2022, and ordered by this Court to be responded to within 15 days on October 18, 2022).
Second, Plaintiff seeks issue sanctions designating facts established (#8-18) due to Defendant’s failure to provide Court-ordered responses to Plaintiff’s First Set of RFPs (originally served on May 27, 2022, and ordered by this Court to be responded to within 30 days on August 9, 2022).
Third, Plaintiff seeks monetary sanctions against Defendant and its counsel of record, Mr. Mainak D’Attaray, due to Defendant’s failure to provide the responses to the First Set of Form Interrogatories (originally served on May 27, 2022, and ordered by this Court to be responded to within 30 days on August 9, 2022) in the amount of $2,000 per day from the date this Court enters an order on this motion until the date responses to Plaintiff’s First Set of Form Interrogatories are served.
Fourth, Plaintiff seeks issue sanctions designating facts established (#19) due to Defendant’s failure to provided Court-ordered responses to Plaintiff’s Special Interrogatories Nos. 6, 7, 8, and 9 (as ordered by this Court on October 18, 2022). In the alternative, Plaintiff seeks monetary sanctions in the amount of $2,000 per day against Defendant and its counsel of record from the date this Court enters an order on this motion until the date Plaintiff receives responses to Special Interrogatories Nos. 6, 7, 8, and 9.
Fifth and finally, Plaintiff seeks additional monetary sanctions against Defendant and its counsel of record for the legal fees and costs incurred by Plaintiff in being required to bring the instant motion in the amount of $18,942.50.
Defendant has not filed any opposition to Plaintiff’s motion.
ANALYSIS
A court may impose monetary, issue, evidence, terminating, and contempt sanctions “against anyone engaging in conduct that is a misuse of the discovery process.” (CCP § 2023.030.) “Misuse of the discovery process” includes “disobeying a court order to provide discovery.” (CCP § 2023.010(g).) It is within this Court’s authority to “compel obedience to its judgments, orders, and process . . . in action or proceeding pending therein.” (CCP § 128(a)(4).) When a party fails to provide any responses to a court’s discovery orders, the moving party has no obligation to provide a separate statement of discovery in dispute or even attempt to meet and confer with counsel for the other party. (Cal. Rules of Court, Rule 3.1345(b) [no separate statement of discovery in dispute is required when no response is provided by responding party]; Sinaiko Healthcare Consulting, Inc. v. Pac. Healthcare Consultants (2007) 148 Cal.App.4th 390, 412 [noting a party is not required to meet and confer prior to seeking sanctions for failing to comply with a court order].)
The Court may impose an issue sanction against a party engaging in misuse of the discovery process by disobeying a court order. (See CCP §§ 2023.030(b), 2023.010(g); see also Moofly Prods., LLC v. Favila (2020) 46 Cal.App.5th 1, 11 [“In general, a court may not impose issue, evidence, or terminating sanctions unless a party disobeys a court order”].) In addition, when a party whom a demand for inspection, copying testing or sampling is directed fails to obey an order compelling a response, 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).” (CCP § 2031.300(c); see also CCP § 2030.290(c) [a party to whom interrogatories are directed who fails to obey an order compelling answers may be subject to the same types of sanctions].)
I. Issue Sanctions for Defendant’s Failure to Provide Responses to Plaintiff’s RFAs and Form Interrogatory 17.1
Despite court orders and prior monetary sanctions, Defendant has not provided responses to Plaintiff’s RFAs and Form Interrogatory 17.1. Pursuant to CCP § 2023.030(b), Plaintiff asks the Court to designate as facts the following issue sanctions:
Issue Sanction # 1 – Empire is currently in possession of property owned by
Gavrieli (RFA No. 1);
Issue Sanction # 2 – The property in Empire’s possession consists of TIEKS®
(RFA No. 2);
Issue Sanction # 3 – Gavrieli is entitled to possession of the property (RFA No.
4);
Issue Sanction # 4 – At least 598 cartons of TIEKS® were taken from Empire’s
warehouse without Gavrieli’s consent between November 2021 and January 2022
(RFA No. 23);
Issue Sanction # 5 – Empire represented to Gavrieli in March 2018 that additional
security would be added to Empire’s warehouse to prevent any theft of
merchandise (RFA No. 34);
Issue Sanction # 6 – Empire failed to add additional security to its warehouse to
prevent any theft of merchandise after March 2018 (RFA No. 35);
Issue Sanction # 7 – When Empire represented to Gavrieli in March 2018 that
additional security would be added to Empire’s warehouse, Empire had no intent
to add additional security to its warehouse (RFA No. 36).
Because of Defendant’s repeated and ongoing failure to comply with Court orders to respond to Plaintiff’s discovery requests, issue sanctions are appropriate in this situation. The seven issue sanctions listed above are designated as facts.
II. Issue and Monetary Sanctions for Defendant’s Failure to Respond to Plaintiff’s RFPs
The following are issue sanctions that Plaintiff has request be designated as facts due to Defendant’s failure to respond to Plaintiff’s RFPs:
1. Issue Sanction # 8 – Empire is a Customs Bonded Warehouse through U.S. Customs and Border Protection (Request No. 1)
Plaintiff requests this issue sanction based on Defendant’s failure to respond to Plaintiff RFP of documents related to how Defendant obtained its status as a Customs Bonded Warehouse through U.S. Customs and Border Protection. Plaintiff claims that because Defendant has not responded to this request despite a court order to do, Plaintiff has been prejudiced and Plaintiff’s preparation of the case has been delayed. Plaintiff argues that an issue sanction establishing that Defendant is a Customs Bonded Warehouse is therefore appropriate. (CCP § 2031.300(c); see Lopez v. Watchtower Bible & Tract Soc’y of N.Y., Inc. (2016) 246 Cal.App.4th 566, 605 [“[T]he court could have imposed evidentiary or issue sanctions to replace the information that would or could be included within those documents”]; see also Kuhns v. State of California (1992) 8 Cal.App.4th 982, 989 [imposing issue sanction deeming admitted that a dangerous condition existed when appellant failed to produce information relevant to respondents’ claim of a dangerous condition of the property].)
The Court agrees with Plaintiff’s reasoning. Plaintiff’s request that Issue Sanction #8 be designated a fact is granted.
2. Issue Sanction # 9 – Empire has no evidence supporting its contention that Catrone Freight Logistics owes it $732,915.50 in storage charges (Request No. 12)
Plaintiff sought information related to Defendant’s claim that it is owed money for storage charges. The Court previously ordered Defendant to provide Plaintiff with information related to this claim. It has not done so. Plaintiff’s request that Issue Sanction #9 be designated a fact is granted.
3. Issue Sanction # 10 – Empire never sent Plaintiff any invoices for the storage fees it now claims are due and owing (Request No. 15)
Once again, Defendant did not produce documents or invoices related to the alleged storage fees, despite a court order to do so. Plaintiff’s request that Issue Sanction #10 be designated a fact is granted.
4. Issue Sanction # 11 – Catrone provided timely payment for all storage fees charged by Empire for the storage of Plaintiff’s merchandise (Request No. 14)
As above, Defendant did not produce documents related to the storage fees, despite a court order to do so. Plaintiff’s request that Issue Sanction #11 be designated a fact is granted.
5. Issue Sanction # 12 – Empire has no evidence supporting its refusal to release Plaintiff’s property held in Empire’s warehouse, and Empire is wrongfully withholding Plaintiff’s property (Request No. 17)
This one is related to the above requests in that Plaintiff sought information related to Defendant’s withholding of Plaintiff’s property, but Defendant has not provided the documents related to its withholding of Plaintiff’s property. Plaintiff’s request that Issue Sanction #12 be designated a fact is granted.
6. Issue Sanction # 13 – A security video was taken by Empire showing the removal and return of Plaintiff’s merchandise from Empire’s warehouse, but Empire destroyed and/or no longer has possession of the video (Request No. 21)
Defendant’s general manager told Plaintiff that there was a security video that captured the theft and return of some of Plaintiff’s merchandise from Defendant’s warehouse. Despite being ordered to produce this video, Defendant has not done so. Plaintiff’s request that Issue Sanction #13 be designated a fact is granted.
7. Issue Sanction # 14 – Although Empire represented that it was adding additional security to its warehouse in 2018 to prevent theft, Empire has no evidence supporting this assertion (Request No. 31)
Despite Plaintiff’s request and a Court order to do so, Defendant did not produce documents related to additional security. Plaintiff’s request that Issue Sanction #14 be designated a fact is granted.
8. Issue Sanction # 15 – Empire has destroyed or lost all documents related to its discovery of the theft of Plaintiff’s merchandise from Empire’s warehouse (Request Nos. 24, 37 – 38)
Defendant has not produced these documents despite being ordered to do so. Plaintiff’s request that Issue Sanction #15 be designated a fact is granted.
9. Issue Sanction #16 – Empire has destroyed or lost all documents related to complaints or disciplinary action against it by U.S. Customs and Border Protection (Request No. 2)
Defendant has not provided the documents related to complaints or disciplinary action against it by U.S. Customs and Border Protection. Plaintiff argues that these documents would be relevant to Plaintiff’s claim that Defendant failed to exercise due care. Plaintiff’s request that Issue Sanction #16 be designated a fact is granted.
10. Issue Sanction # 17 - Empire has destroyed or lost all documents related to complaints of other customers of theft or loss of their merchandise at Empire’s warehouse (Request No. 3)
Similar to Issue Sanction #16, information in these document would be relevant to Plaintiff’s claim that Defendant failed to exercise due care. Plaintiff’s request that Issue Sanction #17 be designated a fact is granted.
11. Issue Sanction # 18 – No arrangements were made by Empire to conduct an inventory or allow for Gavrieli to conduct an inventory of Gavrieli’s merchandise at Empire’s warehouse since December 2021 when Catrone Freight Logistics first contacted Empire to perform an inventory (Request Nos. 18, 34 – 35)
This request is similar to the above requests. Defendant failed to provide documents related to this matter. Plaintiff’s request that Issue Sanction #18 be designated a fact is granted.
III. Daily Monetary Sanctions for Defendant’s Failure to Provide Responses to Plaintiff’s First Set of Form Interrogatories
The court may impose a monetary sanction against a party to whom interrogatories are directed who fails to obey an order. (CCP § 2030.290(c).) The Court ordered Defendant to provide responses to Plaintiff’s First Set of Form Interrogatories on August 9, 2022. Defendant has still not provided those responses. Plaintiff has requested that the Court order Defendant to pay $2,000 in sanctions a day until the responses are served. Given the history of Defendant’s numerous failures to make discovery and to comply with this Court’s multiple orders, the Court finds that it is necessary at this time to impose a sanction that may prompt Defendant to comply with its obligations. Therefore, the Court shall grant the request and impose a monetary sanction that Defendant pay Plaintiff the sum of $2,000 per day commencing March 21, 2023 for each day after March 21, 2023 that complete code compliant answers to the interrogatories is not served on Plaintiff. (Thus, if responses are served on March 23, 2023, a total of $4,000 in sanctions shall be due.). These sanctions shall be payable immediately after every 10-day period of failure to comply. (Thus, once a total of $20,000 in sanctions under this specific monetary sanction has accrued that amount is immediately payable.)
IV. Issue Sanction for Defendant’s Failure to Provide Responses to Plaintiff’s Special Interrogatories
The court may impose an issue sanction by an order prohibiting any party engaging in the misuse of the discovery process from supporting or opposing designated claims or defenses. (CCP § 2023.030(b).)
Plaintiff’s Issue Sanction # 19 is that Empire is prohibited from further supporting its assertion that Gavrieli and Catrone Freight Logistics are alter egos of one another.
Because Defendant has not provided the Court-ordered responses to Special Interrogatories Nos. 6, 7, 8, and 9, Plaintiff requests that the Court designate the above as fact. The Court grants Plaintiff’s request that Issue Sanction #19 be designated as a fact.
V. Sanctions for Plaintiff Having to Bring this Motion
Plaintiff is requesting $18,942.50 in sanctions against Defendant and Defendant’s counsel of record for having to bring this motion ($18,882.50 in attorney fees and $60.00 in filing fees). (Smith Decl. ¶¶ 16-18.) Plaintiff’s counsel states that An Le, counsel for Plaintiff, spent 26.8 hours preparing and compiling the notice, motion, declaration, and materials at a billing rate of $575.00 per hour for a total of $15,410.00. (Smith Decl. ¶ 16.) Ehsun Forghany, counsel for Plaintiff, spent 1.5 hours reviewing the materials for the motion at a billing rate of $925.00 per hour for a total of $1,387.50. (Smith Decl. ¶ 17.) Smith spent 1.5 hours reviewing and editing the motion at a billing rate of $1,390.00 per hour for a total of $2,085.00. (Smith Decl. ¶ 18.)
The amount requested in sanctions seems excessive in light of the nature of the motion. The Court grants Plaintiff’s request for sanctions against Defendant, but Plaintiff’s request for sanctions is granted at the reduced amount of $13,000, plus the filing fee of $60. The sanctions are awarded against both Defendant Empire Container Freight Station, Inc. and its counsel of record Mainak D’Attaray.
ORDER
1. The Court GRANTS Plaintiff’s requests #1-19 for Issue Sanctions.
2. Defendant is ordered to serve complete, code compliant responses to Plaintiff’s First Set of Form Interrogatories within 10 days of service of notice of this order.
3. The Court imposes a monetary sanction on Defendant Empire Container Freight Station, Inc that Defendant pay Plaintiff the sum of $2,000 per day commencing March 21, 2023 for each day after March 21, 2023 that complete code compliant answers to the Plaintiff’s First Set of Form Interrogatories is not served on Plaintiff. (Thus, if responses are served on March 23, 2023, a total of $4,000 in sanctions shall be due.). These sanctions shall be payable immediately after every 10-day period of failure to comply. (Thus, once a total of $20,000 in sanctions under this specific monetary sanction has accrued that amount is immediately payable.). Once full and complete code compliant answers are provided any then unpaid (and not yet payable) sanctions under this paragraph shall be immediately due and payable.
4. Defendant Empire Container Freight Station, Inc. and its counsel of record Mainak D’Attaray are ordered to pay to Plaintiff’s counsel monetary sanctions for the costs and fees associated with having to bring this motion in the amount of $13,060. The monetary sanctions awarded in this paragraph shall be paid within 30 days of the date of service of notice of this order.