Judge: Gary I. Micon, Case: 23CHCV02291, Date: 2024-05-31 Tentative Ruling

Case Number: 23CHCV02291    Hearing Date: May 31, 2024    Dept: F43

Dept. F43

Date: 5-31-24

Case # 23CHCV02291, Grahge v. Godley, et al.

Trial Date: 4-21-25

MOTION FOR RELIEF FROM WAIVER OF DISCOVERY OBJECTIONS

MOVING PARTY: Defendant Picture Build

RESPONDING PARTY: Plaintiff Alan Grahge

RELIEF REQUESTED

Moving party requests that this Court grant relief from waiver of discovery objections.

RULING: Motion is granted.

SUMMARY OF ACTION

On August 1, 2023, Plaintiff Alan Grahge (Plaintiff) filed this contractual fraud case against Defendants Brian M. Godley; Mohammed Rahman; Picture Build, a California Corporation; and DOES 1-10 (Defendants), inclusive. The Complaint asserts causes of action for breach of contract; breach of covenant of good faith and fair dealing; breach of fiduciary duty; fraud; violation of Cal. Penal Code § 496; violation of Cal. Labor Code §§ 1194, 201-203, 226 and 558.1; access to corporate books and records; violation of Business & Professions Code § 17200, et seq.; accounting; and involuntary dissolution.

The Complaint alleges Plaintiff and Defendant Godley entered into a Stock Purchase Agreement, wherein Plaintiff would purchase Godley’s 70 percent interest Picture Build (the Company) for $1,120,000.00. (Compl., ¶33, Ex. 1.) The Complaint further alleges Godley represented to Plaintiff that he was moving to Florida but would remain the Responsible Managing Officer (RMO) for the Company for four years on an as needed basis. (Compl., ¶¶34-35.) On January 10, 2023, Godley disassociated his licenses from the Company and asserted he could not be the RMO from Florida because he needed to be involved in daily operations of the Company. (Compl., ¶36.) The Complaint also alleges Godley concealed material facts concerning other stock transfer agreements, lawsuits, loans, salary payments, and consumer complaints from Plaintiff. (Compl., ¶¶37-73.)

On December 13, 2023, Defendant Brian M. Godley (Cross-Complainant) filed a Cross-Complaint against Plaintiff and ROES 1-50, alleging causes of action for breach of written contract and breach of fiduciary duty.

On May 7, 2024, Defendant Picture Build, a California corporation (Picture Build Corp.) filed the instant Motion for Relief from Waiver of Discovery Objections. On May 15, 2024, Plaintiff filed an opposition. On May 22, 2024, Defendant Picture Build Corp. filed a reply.

ANALYSIS

Defendant Picture Build Corp. argues the date for response to Plaintiff’s Request for Production of Documents (Set One) was miscalendared as January 30, 2024 instead of January 19, 2024. (Eisenberg Decl., ¶¶2-3.) Furthermore, Defendant Picture Build Corp. contends upon Plaintiff’s counsel’s email alerting to past due responses on January 25, 2024, it immediately explained the response deadline had been miscalendared and served responses on two days later that are substantially code-compliant. (Id., ¶¶4-6, Exs. A-C.) Moreover, Defendant Picture Build Corp. contends Plaintiff’s refused to give a two-week extension to serve responses without waiving objections. (Id.) Additionally, Defendant Picture Build Corp. asserts the Court has broad discretion to grant relief from waiver of discovery objections. Lastly, Defendant Picture Build Corp. asserts that Plaintiff will not face any prejudice by the relief  sought because no trial date is scheduled, no deposition are scheduled, and the discovery responses were only eight days late.

In opposition, Plaintiff argues defense counsel’s failure to calendar a discovery deadline or intentional calendaring of a deadline forty-six (46) days after the discovery was served are not valid grounds for relief. Plaintiff further argues the main reason defense counsel seeks relief from waiver of all objections is to improperly avoid providing corporate and financial documents that are essential to Plaintiff’s fraud and penal code causes of action against Defendant Picture Build Corp. and documents requested in Plaintiff’s demand letter.

In reply, Defendant Picture Build Corp. argues Plaintiff’s counsel fails to explain his refusal to grant a discovery extension without insisting on Defendant Picture Build Corp. waiving objections. Defendant Picture Build Corp. also argues Plaintiff fails to demonstrate he would be prejudice if the relief from waiver of objections is granted.

Code of Civil Procedure section 2031.300(a) states in pertinent part, “[t]he party to whom the demand for inspection, copying, testing, or sampling is directed waives any objection to the demand, including one based on privilege or on the protection for work product under Chapter 4 (commencing with Section 2018.010).” (Code Civ. Proc., § 2031.300(a).) However, the Court may relieve that party from this waiver on its determination that: “[t]he party has subsequently served a response that is in substantial compliance with Sections 2031.210, 2031.220, 2031.230, 2031.240, and 2031.280” and “[t]he party’s failure to serve a timely response was the result of mistake, inadvertence, or excusable neglect.” (Code Civ. Proc., § 2031.300(a)(1)-(2).)

Specifically, “[a] mistake of fact is when a person understands the facts to be other than they are; a mistake of law is when a person knows the facts as they really are but has a mistaken belief as to the legal consequences of those facts… [i]nadvertence is defined as lack of heedfulness or attentiveness, inattention, fault from negligence…[and] ‘excusable neglect’ referred to in the section is that neglect which might have been the act of a reasonably prudent person under the same circumstances.” (Baratti v. Baratti (1952) 109 Cal.App.2d 917, 921.) “To obtain relief a defendant must have acted within a reasonable time.” (Id.)

“The Legislature apparently intended to employ the same standard for relief from defaults as used in section 473 for failure to serve a timely response to a discovery demand.” (City of Fresno v. Superior Court (1988) 205 Cal.App.3d 1459, 1467 (City of Fresno).) In City of Ontario v. Superior Court (1970) 2 Cal.3d 335, 345, the court concluded “[i]t is settled that an honest and reasonable mistake of law on such an [complex and debatable] issue is excusable and constitutes good cause for relief from default under Code of Civil Procedure, section 473.” (Id.) As such, “[c]ounsel's mistake of law on a relatively simple and undebatable matter was not a valid ground for relief.” (City of Fresno, supra, 205 Cal.App.3d at 1467.)

Here, Plaintiff does not dispute Defendant Picture Build Corp. provided substantially code-compliant responses to the Request for Production of Documents (Set One). Furthermore, Plaintiff does not explicitly raise any arguments as to whether he would be prejudice by the relief sought in this matter. However, Plaintiff merely indicates that Defendant Picture Build Corp. seeks to avoid providing Plaintiff documents requested in the demand letter and essential to at least two causes of action asserted against Defendant Picture Build Corp. On the other hand, Defendant Picture Build Corp. has demonstrated that no depositions have been taken and so far only Plaintiff’s Request for Production of Documents (Set One) have been served in the matter. Moreover, the Court notes that the trial currently set a year from now, so Plaintiff would have time to conduct and request the requisite discovery he needs. Finally, Defendant Picture Build Corp. has shown that inadvertence of defense counsel led to the miscalendaring of the response deadline and was quickly cured upon Plaintiff’s counsel bringing this to defense counsel’s attention.

Therefore, the Court finds that relief from waiver of discovery objections in this matter would not be improper at this time.

Conclusion

The motion is granted.

Moving party to give notice.