Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 200 

 

 

BACKGROUND 

This is a theft of trade secrets case.  Plaintiff and Cross-Defendant Travel Entertainment and Marketing LLC (“TEAM”) provides event planning services primarily for college fraternities and sororities, as well as for other college student organizations.  Cross-Defendant Michael Olivas is the sole owner of TEAM.   

From 2016-2020, Defendant and Cross-Complainant Brian Delino worked for TEAM as a sales representative.  While working for TEAM, Delino allegedly stole TEAM’s business for himself, converted TEAM funds for his own use, and used TEAM’s proprietary and confidential information, including but not limited to TEAM’s customer lists, prospect lists and pricing information.    

TEAM sued Delino and his company, BigDaddyFormals (collectively “Defendants”).  Delino countersued TEAM and Olivas, alleging they interfered with the business of BigDaddyFormals.   

TEAM served document requests, set one, and special interrogatories, set one on Defendants.  Defendants responded with boilerplate objections, prompting TEAM to file a motion to compel.  TEAM also moved to compel Delino’s deposition testimony and for production of documents listed in the deposition notice.  On January 8, 2024, the Court granted TEAM’s motions (“Discovery Order”), concluding that the discovery requests sought relevant information and the parties’ protective order was sufficient to protect any trade secret or privacy concerns raised by Defendants. 

The Court ordered that the deadline to provide the discovery would be January 17, 2024.  On January 13, 2024, TEAM’s counsel gave Defendants a ten-day extension, thereby making the supplemental responses and documents due on or before January 27, 2024.  (Bendel Decl. ¶7.)  However, Defendants failed to serve verified supplemental responses or produce the requested documents.     

This hearing is on TEAM’s two motions for terminating sanctions and monetary sanctions, one directed to each Defendant.  TEAM argues that Defendants willfully failed to respond to its discovery requests and disobeyed the Court’s January 8, 2024 order granting TEAM’s motions to compel.  As a result, TEAM asks the Court to strike Defendants’ answer and cross-complaint, leaving the matter to proceed to a default prove up.  Alternatively or in addition, TEAM seeks sanctions in the amount of $2,910 as to each defendant, as fees incurred by TEAM in bringing its two motions.   

LEGAL STANDARD 

California Code of Civil Procedure section 2023.030 permits courts to impose sanctions against anyone engaging in conduct that constitutes a misuse of the discovery process. Section 2023.010 provides a non-exhaustive list of conduct that is considered misuse of the discovery process, including as relevant here, failing to respond or submit to an authorized method of discovery and disobeying a court order to provide discovery. (Cal. Civ. Proc. § 2023.010(d), (g).)  

Further, Code of Civil Procedure section 2023.030 subdivision (d) gives courts the authority to issue a terminating sanction by one of four following orders: (1) an order striking out the pleadings or parts of the pleadings of any party engaging in misuse of the discovery process; (2) an order staying further proceedings until an order for discovery is obeyed; (3) an order dismissing the action, or any part of the action, of that party; or (4) an order rendering a default judgment against that party.  

In determining whether to impose terminating sanctions, trial courts must consider the totality of the circumstances, including whether the actions were willful; the detriment to the propounding party; and the number of informal and formal attempts to obtain the discovery. (Lang v. Hochman (2000) 77 Cal.App,4th 1225, 1246.) 

The trial court has broad discretion in selecting discovery sanctions, subject to reversal only for abuse. (Reedy v. Bussell (2007) 148 Cal.App.4th 1272, 1293; Miranda v. 21st Century Ins. Co. (2004) 117 Cal.App.4th 913, 928–929.)  The trial 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.” (Do It Urself Moving & Storage, Inc. v. Brown, Leifer, Slatkin & Berns (1992) 7 Cal.App.4th 27, 36.) 

The discovery statutes evince an incremental approach to discovery sanctions, starting with monetary sanctions and ending with the ultimate sanction of termination.  “Discovery 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.” (Laguna Auto Body v. Farmers Ins. Exchange, 231 Cal.App.3d at p. 487.)  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.) 

DISCUSSION 

The Court first addresses Defendants’ argument that the Court should deny the motions for terminating sanctions as Defendants have filed a timely writ of prohibition.  The writ was recently denied, and accordingly, this argument no longer has merit.    

The Court turns now to the substance of the motions.  “[C]ourts have properly imposed terminating sanctions when parties have willfully disobeyed one or more discovery orders.”  (Los Defensores, Inc. v. Gomez (2014) 223 Cal.App.4th 377, 390¿(quoting¿Lang v. Hochman (2000) 77 Cal.App.4th 1225, 1244-46); see also Collisson & Kaplan v. Hartunian (1994) 21 Cal.App.4th 1611, 1617-1622¿(terminating sanctions imposed after defendants failed to comply with one court order to produce discovery);¿Laguna Auto Body v. Farmers Ins. Exchange (1991) 231 Cal.App.3d 481, 491¿(disapproved on other grounds in¿Garcia v. McCutchen (1997) 16 Cal.4th 469, 478, n. 4) (terminating sanctions imposed against plaintiff for failing to comply with a discovery order and for violating various discovery statutes).) 

Here, Defendants have willfully failed to comply with the Discovery Order.  It has been several months since the discovery requests were initially served or the deposition was taken.  TEAM has made informal attempts to obtain the discovery, including granting Defendants a ten-day extension to respond, and when that date passed, giving Defendants an opportunity to produce the responses immediately before bringing a motion.  The burden on Defendants to respond is not great given the amount of time they have already been given to comply.  The discovery sought goes to the heart of the case, including whether Defendants stole Plaintiff’s customer lists, prospect lists, vendor information and pricing information.  Defendants have not acted in good faith and with reasonable diligence.  Accordingly, the Court concludes terminating sanctions are warranted.          

Defendants contend TEAM gave them an extension of 10 days until after the mediation in this case, which is set for March 19, 2024.  (Ex. 2 to Bendel Decl.)  TEAM, however, made clear that the ten-day extension was as of the due date imposed by the Court.  (Bendel Decl. ¶10.)  Moreover, the parties filed a stipulation to continue trial which indicated “Plaintiffs have granted Defendants a ten-day extension to produce the documents to ensure a complete production”.  The stipulation did not provide that Defendants would produce the documents ten days after the mediation.  Rather, the parties stated they believed “a further mediation will be fruitful after the completion of the remaining discovery, including the document production, and a mediation has been scheduled with Gene Sharaga for March 19, 2024.”  In other words, the parties agreed that document production would take place before the mediation.  Defendants’ interpretation of the ten-day extension, therefore, is belied by statements made in their own stipulation.     

Defendants also argue that they have not complied because Plaintiff did not give notice.  Defendants, however, do not dispute they were aware of the Court’s ruling as defense counsel was at the hearing.  The failure to give notice, therefore, does not mean, as Defendants claim, that Defendants were not afforded due process.  Defendants clearly knew of the order and willfully disobeyed it.  (Barron v. Deleval (1881) 58 Cal. 95, 98) (waiver of notice implied from counsel’s presence at hearing; “In this case the appellant’s attorney¿was present in Court when the decision of the Court overruling the demurrer was announced, and thereupon asked and obtained leave to file an answer within five days.  Can he be heard now to say that he did not have written notice of the decision?  What purpose would a written notice of a fact of which the attorney had direct and positive knowledge have subserved?¿Would it not have been a vain and idle ceremony to have given him a written notice under the circumstances disclosed in this case?¿… To hold that the party and his attorney were not bound by this proceeding, had in open Court, would be trifling with justice, and also subversive of sound principles¿of law and morals.”).) 

Section 2023.030 also authorizes a trial court to impose monetary sanctions against “anyone engaging in conduct that is a misuse of the discovery process.”  Misuses include “[f]ailing to respond or to submit to an authorized method of discovery” (Code Civ. Proc., § 2023.010, subd. (d)), and “[d]isobeying a court order to provide discovery” (id., § 2023.010, subd. (g)).  TEAM seek sanctions in the amount of $2,910 for each motion filed, which represents six hours of work on each motion at an hourly rate of $475.00, plus motion filing fees of $60.  

The Court concludes the hourly rate (of $475) is reasonable for TEAM’s counsel, an attorney with 24 years’ experience in the Southern California market who is a graduate of Pepperdine Law School.  Moreover, the hours spent (6 hours for each motion) are reasonable.  The Court, accordingly, awards $2,910 in favor of TEAM and against each Defendant, for a total of $5,820. 

 

CONCLUSION 

Based on the foregoing, the Court GRANTS Plaintiff’s motions for terminating sanctions and monetary sanctions.  The Court strikes the answer and cross-complaint, and Plaintiff is to submit default prove up papers by March 29, 2024.  The Court also awards sanctions in favor of Plaintiff and against Defendants in the amount of $5,820, to be paid within 20 days of this Order. 

 

IT IS SO ORDERED. 

 

DATED: March 8, 2024 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court