Judge: Elaine Lu, Case: 21STCV44716, Date: 2023-09-12 Tentative Ruling

Case Number: 21STCV44716    Hearing Date: December 11, 2023    Dept: 26

Superior Court of California

County of Los Angeles

Department 26

Procedural Background

On December 7, 2021, Plaintiff Library Rights Company (UK) LTD. (“Plaintiff”) filed the instant action against Defendants Initial Entertainment Group, Inc. (“IEG”), GK Films, LLC (“GK Films”), GKF Distribution, LLC, Graham King (“King”), Content Partners, LLC and CP IEG Holdings LP for breach of contract and accounting of gross proceeds from the films “Ali,” “Gangs of New York,” and “Traffic.”  On August 11, 2022, Plaintiff filed the operative First Amended Complaint (“FAC”) against all of the defendants.[1]  The FAC asserts three causes of action for (1) Breach of Contract, (2) Breach of Implied Covenant of Good Faith and Fair Dealing, and (3) Common Count.

On September 12, 2023, the Court granted Plaintiff’s motion to compel Defendant IEG’s further response to Request for Production, Set One and ordered IEG to provide further code complaint responses and pay sanctions of $3,000.00 within 30 days of notice of the order.  (Order 9/12/23.)

On October 27, 2023, Plaintiff filed the instant motion for terminating sanctions against Defendant IEG.  No opposition or reply has been filed.

Legal Standard

Code of Civil Procedure section 2023.030 provides that, “[t]o the extent authorized by the chapter governing any particular discovery method . . . , the court, after notice to any affected party, person, or attorney, and after opportunity for hearing, may impose . . . [monetary, issue, evidence, or terminating] sanctions against anyone engaging in conduct that is a misuse of the discovery process . . . .”  Code of Civil Procedure section 2023.010 provides that “[m]issues of the discovery process include, but are not limited to, the following: . . . (d) Failing to respond or to submit to an authorized method of discovery. . . . (g) Disobeying a court order to provide discovery . . . .”

“The trial court may order a terminating sanction for discovery abuse ‘after considering the totality of the circumstances: [the] conduct of the party to determine if the actions were willful; the detriment to the propounding party; and the number of formal and informal attempts to obtain the discovery.’”  (Los Defensores, Inc. v. Gomez (2014) 223 Cal.App.4th 377, 390 [quoting Lang v. Hochman (2000) 77 Cal.App.4th 1225, 1246].)  “Generally, ‘[a] decision to order terminating sanctions should not be made lightly.  But where 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.’”  (Los Defensores, supra, 223 Cal.App.4th at p. 390 [citation omitted].)

“Under this standard, trial courts have properly imposed terminating sanctions when parties have willfully disobeyed one or more discovery orders.”  (Ibid. [citing Lang, supra, 77 Cal.App.4th at pp. 1244-1246); see, e.g., 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, fn.4, [terminating sanctions imposed against the plaintiff for failing to comply with a discovery order and for violating various discovery statutes].)

However, “a penalty as severe as dismissal or default is not authorized where noncompliance with discovery is caused by an inability to comply rather than willfulness or bad faith.”  (Brown v. Superior Court (1986) 180 Cal.App.3d 701, 707.) 

Pursuant to Code of Civil Procedure section 2023.030(d):

The court may impose a terminating sanction by one of the following orders:

(1) An order striking out the pleadings or parts of the pleadings of any party engaging in the misuse of the discovery process.

(2) An order staying further proceedings by that party until an order for discovery is obeyed.

(3) An order dismissing the action, or any part of the action, of that party.

(4) An order rendering a judgment by default against that party.

Discussion

            Plaintiff seeks terminating and monetary sanctions against Defendant IEG for failing to comply with the Court’s September 12, 2023 Order.

Terminating Sanctions

            On September 28, 2022, Defendant IEG filed an answer to the operative FAC.  (Pierucci Decl. ¶ 3, Exh. B.)  On October 17, 2022, Plaintiff propounded Request for Production, Set One on Defendant IEG.  (Pierucci Decl. ¶ 4, Exh. A.)  On December 2, 2022, Defendant IEG served responses to Plaintiff’s Request for Production, Set One.  (Pierucci Decl. ¶ 5, Exh. D.)  For approximately six months, Plaintiff’s Counsel and IEG’s counsel met and conferred through emails regarding the sufficiency of the responses, and IEG promised to produce documents responsive to various requests and amend certain responses.  (Pierucci Decl. ¶¶ 6-11, Exhs. E.)  However, no amended responses or documents were produced.  (Pierucci Decl. ¶ 11, Exh. E.) 

            In June 2023, Plaintiff’s Counsel was notified that IEG had retained new counsel, Sheldon Eisenberg at Sullivan Triggs.  (Pierucci Decl. ¶ 12.)  Plaintiff’s Counsel informed this new counsel that Plaintiff had reserved a motion to compel further responses for September and asked that IEG agree to amend its written responses prior to August 18, 2023 to avoid the instant motion.  (Pierucci Decl. ¶ 12.)  IEG’s new counsel refused stating “that IEG would not be participating in discovery any further and would likely default rather than defend this litigation.”  (Pierucci Decl. ¶ 12.) 

            On August 31, 2023,  in IEG’s response to Plaintiff’s then pending motion to compel further responses, IEG claimed that it has been dissolved since February 2021 – before the instant action was filed – and has had no business activity since 2009 and no bank account since April 2019.  “[T]he dissolved IEG entity has neither the resources, personnel, ability, or reason to defend this action. As a result, former agents of IEG believed it appropriate, as a courtesy to the Court, to inform it, the parties and their counsel through this special appearance that the dissolved IEG entity will not, for the foregoing reasons, respond to this Motion and will not participate further in these proceedings, and this Statement is submitted for that sole purpose.”  (Pierucci Decl. ¶ 13, Exh. F, [IEG’s Response at p.2:10-14].)

The Court noted in its September 12, 2023 Order that the Court could not treat this unverified statement as evidence.  (See e.g., Smith, Smith & Kring v. Superior Court (Oliver) (1997) 60 Cal.App.4th 573, 578, [“the court must disregard ‘facts’ contained in an unverified statement.”].)  Further, the Court noted that “IEG fails to identify any grounds for the Court to uphold or sustain the objections IEG raised in its response to the requests for production.  Moreover, IEG has filed an answer and thus must participate in the action unless its answer is stricken.”  (Order 9/12/23.)  Thus, the Court ordered IEG to provide further code complaint responses and pay sanctions of $3,000.00 within 30 days of notice of the order.  (Order 9/12/23.)  However, despite being provided notice of the ruling, Defendant IEG refused to comply with the Court’s September 12, 2023 Order.  (Pierucci Decl. ¶ 17.) 

            As to the failure to pay monetary sanctions, the Court notes that “terminating sanction issued solely because of a failure to pay a monetary discovery sanction is never justified.”  (Newland v. Superior Court (1995) 40 Cal.App.4th 608, 615.)  As the Court of Appeal noted in Newland, “many attorneys seem to be unaware that monetary sanction orders are enforceable through the execution of judgment laws.”  (Ibid.)  Monetary sanctions “have the force and effect of a money judgment, and are immediately enforceable through execution, except to the extent the trial court may order a stay of the sanction.”  (Ibid.)  Thus, Plaintiff can simply enforce the monetary sanctions from the September 12, 2023 order as a judgment.

            However, as to the failure to comply with the order to provide further responses, it is clear that the failure is intentional.  As IEG noted in its August 31, 2023 response, IEG stated that it would no longer participate in the action.  Moreover, Defendant IEG has failed to file any opposition to the instant motion, leading this court to conclude that IEG has no meritorious arguments in opposition.  (Laguna Auto Body v. Farmers Ins. Exchange (1991) 231 Cal.App.3d 481, 487; Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 796-797.)  

Based on the record before the Court, the Court finds Defendant IEG  had knowledge of its discovery obligations and the Court order compelling IEG’s compliance.  Accordingly, Plaintiff has demonstrated that Defendant IEG’s compliance with the Court’s orders cannot be achieved through lesser sanctions.

Plaintiff is thus entitled to a court order imposing terminating sanctions against Defendant IEG.

Conclusion and ORDER

Based on the foregoing, Plaintiff Library Rights Company (UK) LTD.’s motion for terminating sanctions against Defendant Initial Entertainment Group, Inc. is GRANTED.

Defendant Initial Entertainment Group, Inc.’s answer to the first amended complaint filed on September 28, 2022 is stricken, and default is entered against Defendant Initial Entertainment Group, Inc. on Plaintiff’s first amended complaint.

On an unrelated note, on November 16, 2023, the parties electronically filed a stipulation to continue the trial from January 29, 2024 to April 29, 2024.

On November 18, 2023, the Court granted the parties' stipulation to continue the trial to the precise date jointly requested by the parties' stipulation -- April 29, 2024.

Eleven days later, on November 29, 2023, the parties submitted another stipulation to continue the trial "from January 29, 2024 to June 3, 2024  or as soon thereafter as is convenient for the Court."  This second stipulation seems to ignore that the Court already granted the parties' first stipulation to continue the trial to April 29, 2024.  Perhaps the parties were unaware because they did not receive notice of the signed November 18, 2023 order on their first stipulation.  However, as of November 29, 2023, the trial was no longer set for January 29, 2024.  As of November 29, 2023, the trial was set for April 29, 2024 -- as stipulated by the parties when they submitted their first stipulation on November 16, 2023.  The Court does not have availability for the trial of this matter on June 3, 2024.  The trial remains set for April 29, 2024.  If any party has a trial conflict with April 29, 2024 -- notwithstanding that the parties expressly requested a continuance to April 29, 2024 in their first stipulation submitted on November 16, 2023 -- that party may bring an ex parte application to be heard on or before December 14, 2023, identifying in the ex parte the name of trial counsel for that party, the name and case number of the conflicting trial, the anticipated duration of the trial, and the date on which that trial was set.

Plaintiff is to give notice to all parties and file proof of service of such.

DATED:  December ___, 2023                                                ___________________________

Elaine Lu

                                                                                          Judge of the Superior Court