Judge: John J. Kralik, Case: 19BBCV00929, Date: 2022-08-19 Tentative Ruling
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Case Number: 19BBCV00929 Hearing Date: August 19, 2022 Dept: NCB
North Central District
|
woodhill ventures, llc dba
big sugar bakeshop, Plaintiff, v. BEN YANG, Defendant. |
Case No.: 19BBCV00929 Hearing Date: August 19, 2022 [tentative] order RE: motion to compel compliance with Court order |
BACKGROUND
Plaintiff Woodhill Ventures, LLC dba Big
Sugar Bakeshop (“Plaintiff”) is a small business bakery. Plaintiff alleges that Defendant Ben “Ben
Baller” Yang (“Defendant”) made numerous profane, libelous, and slanderous
comments on social media and his podcast accusing Plaintiff of putting Drugs/RX
prescription pills on his son’s birthday cake.
The operative complaint, filed October 17, 2019,
alleges causes of action for: (1) libel; (2) slander; and (3) unfair business
practices.
On May 5, 2022, Plaintiff filed a motion to
compel Defendant to comply with the Court’s order. On July 22, 2022, Plaintiff filed an amended
motion. The Court will consider the
later-filed motion as the operative moving papers.
The Court is not in receipt of an opposition
brief.
Concurrently scheduled for hearing this date
is a Hearing on Application for Order for Appearance and Examination as to Judgment
Debtor Ben Yang and an Order to Show Cause re: $1,000 in Sanctions against
Defendant Ben Yang for His Failure to Appear and Against Defense Counsel James
Bryant for His Failure to Comply.
The Court is not in possession of an
opposition brief. Defendant has repeatedly failed to file opposition briefs in
a timely manner and has been duly warned by the Court that this may result in
his papers not being considered.
DISCUSSION
Plaintiff moves the Court for an order: (1) compelling
Defendant to produce his financial statements showing his net worth and income statements
accurately representing his income for
the past 3 years, (ii) allowing Plaintiff to seek all financial discovery of Defendant
reasonably necessary to ascertain his net worth and income (including subpoenas
to his accountants/financial advisors), (iii) compelling Defendant to appear
for a deposition to answer further questions regarding his net worth and
income, and (iv) for sanctions against Defendant and his counsel James Bryant
in the amount of $7,906.90, pursuant to this Court’s March 28, 2022 Order.
On March 28, 2022, the Court granted
Plaintiff’s motion for pretrial discovery pursuant to Civil Code, § 3295. The Court limited the scope of the order,
such that Defendant was ordered to “produce
a financial statement of his net worth and income statements accurately
representing his income for the past three years within 20 days of this order. Plaintiff may also ask questions about these
documents at Defendant’s deposition. If
this discovery proves to be insufficient, Plaintiff may file the appropriate motion
or request an Informal Discovery Conference with the Court.” (Mot., Ex. A [3/28/22 Order at p. 15].) Plaintiff argues that in response to the
Court’s order, Defendant provided a 1-page “income statement” of a company
called “London Ryder Kaia Inc.” on April 27, 2022, but he did not produce a
personal income or financial statement regarding his net worth. (Mot., Ex. C [Email Exchange; Profit &
Loss Detail of London Ryder Kaia Inc. from January 2019 – December 2021].) Plaintiff further argues that on June 8,
2022, it deposed Defendant, but Defendant refused to answer specific questions concerning
the income statement. (Mot., Ex. D [Def.’s Depo. Transcript].)
Defendant produced a single-page
document with the following information:
London
Ryder Kaia Inc.
Profit
& Loss Detail
January
2019 through December 2021
Paid
Amount
Ordinary
Income/Expense
Income
Income
2,300,000.00
Expense
Advertising
and Promotion
Total
Advertising and Promotion 83,400.00
Accounting 32,000.00
Automobile
Expense
Total
Automobile Expense 278,000.00
Donation
Total
Donation 45,000.00
Dues and Subscriptions
Total
Dues and Subscriptions 36,000.00
Insurance
Expense
102,000.00
Legal
Expenses
24,000.00
Total
Legal Expenses 24,000.00
Marketing
Expense
Total
Marketing Expense 126,000.00
Offsite
Meetings
108,000.00
Total
Meals and Entertainment 108,000.00
Travel
Expenses
Total
Travel Expenses 178,000.00
Total
Utilities 23,000.00
Wardrobe
expense
Total
Wardrobe expense 125,000.00
Net
Income
1,139,600.00
(Mot., Ex. C.) At the
subsequent deposition, Counsel for Defendant referred to this as a financial
statement. (“We provided you with a financial statement, which actually, you
can ask him questions about.” Page 11,
lines: 11-13.) Certain facts are immediately obvious from the information: 1. This
is not a financial statement; it is a kind of income statement. 2. It is not a very good income statement as
it is ambiguous as to whether it is covering one year or three years and limits
itself to “paid amounts.” 3. It is not an income statement of Defendant, but an
income statement of one of his corporations. These facts are obvious to the Court
and the Court would expect them to be obvious to legal counsel and a reasonable
businessman of ordinary experience.
At his deposition, defense counsel
advised Defendant not to answer certain questions, such as how much Defendant
made related to his Instagram and Twitter accounts. (Def.’s Depo. at pp.10-12.) Although Defendant’s social media accounts
state in his profile that he started “from min wage to $75M net worth” and “from
minimum wage to $30M,” Defendant testified that he did not write those
statements and that his former personal assistant wrote that information. (Id. at p. 13; Mot., Exs. E-F.) Defendant testified that he did not know his
net worth, but he estimated it was over $5 million. (Def.’s Depo. at pp. 16-17.) Defendant answered some questions about his
house, cars, and jewelry and testified that he owned a jewelry store, but
specifics were not provided. (Id.
at pp.17-18.) When asked about his
companies, Defendant testified that he owned London Ryder Kaia, Inc., Captain
Picks, and Ben Baller Did The Strain, but stated that his salary ranges and did
not know the figures at the time of the deposition. (Id. at pp. 22-23.) Defendant testified that “a hundred percent
of my life is through London Ryder Kaia, Inc.” and that outside of this
company, he does not receive any income.
(Id. at p. 41.)
While the income statement provided
may show what income Defendant receives from London Ryder Kaia, Inc., this
income statement does not specify the source of Defendant’s income. It is unclear what the purpose of this entity
is, how it produces income for Defendant, what the income is comprised of, etc. In addition, it is unclear if the income
provided by London Ryder Kaia, Inc. to Defendant is through the company’s
business (unspecified), investments, Defendant’s social media accounts, his podcast,
his occupation as a jeweler, etc.—or if these sources of income were or were not
accounted for in the London Ryder Kaia, Inc. income statement. Thus, the information produced by Defendant
is incomplete and does not reflect his full financials. Further, Defendant’s statements about his net
worth and financials are conflicting; for example, his personal assistant wrote
on his social media profiles that his net worth ranged from $30 million to $75
million. (Mot., Exs. E-F.) Also, while Defendant testified that he did
not know the specifics of his financials, he also posted in his social media
account that he paid $8 million in taxes in 2021, indicating that he is aware
of some of his financials. (Mot., Ex. G.)
It may be that production of his personal tax filings, as well as for
his businesses, may be relevant to ascertain his net worth. Thus, the Court grants the motion in part such
that the Court orders Defendant to produce his financial and income statements
showing his net worth, which accurately represent his income in the past 3
years.
With respect to Plaintiff’s request
that Defendant be compelled to attend a second deposition to answer further
questions regarding his net worth and income, it appears that Defendant was advised
not to answer certain questions about his income. In addition, Defendant was not prepared to
testify about his net worth or financials.
But the Court did not expect the Defendant to testify about those
matters. All that was expected was the good faith production of accurate income
and financial statements, and the willingness to verify them as accurate and
explain the entries upon them. This order for limited financial discovery was
made in order to protect the privacy of the Defendant at this pre-trial stage. Had
it been followed, the matter of financial discovery would now be at an end.
Mr. Yang’s response
to the order borders on contempt. However, the Court denies without prejudice
the motion to compel Defendant to attend his second deposition at this time. To the extent Plaintiff seeks to depose
Defendant further regarding his net worth and income, Plaintiff should file a
separate motion to compel Defendant’s attendance at a second deposition to
answer the questions his attorney previously objected to. (See CCP § 2025.480.) Only portions of Defendant’s deposition are provided
and Plaintiff has not highlighted or cited to which specific questions Plaintiff
and counsel seek to depose Defendant, they have not addressed the specific
objections raised by Defendant and counsel, etc. Further, without Defendant’s full financials,
it is unclear what effect a second deposition would have when Defendant himself
does not appear to know the state of his personal finances. Such information might better be sought from
his accountants and advisors.
The Court grants in
part and denies in part Plaintiff’s motion.
The Court grants the motion in part such that the Court again orders
Defendant to produce his financial and income statements showing his net worth,
which accurately represent his income in the past 3 years. The Court denies without prejudice Plaintiff’s
motion for an additional deposition of Defendant. Instead the Court authorizes Plaintiff
to subpoena records from Defendant’s accountancy firm and to conduct a six hour
deposition of the accountant at that firm to attempt to learn further
information regarding Defendant’s net worth and income.
Finally, Plaintiff seeks sanctions
in the amount of $7,906.90 against Defendant and his counsel on the grounds
that Defendant misused the discovery process and disobeyed the Court’s order to
provide discovery. (CCP §§ 2023.010,
2023.030.) The Court grants sanctions in
the reasonable amount of $5,931.90 (= (14 hours x $300/hour) + $1,731.90 in
costs). If another motion is required for
Defendant to comply with his discovery obligations to produce his full
financial and income statements and/or for the second deposition of Defendant,
the Court will consider imposing higher sanctions at that time.
CONCLUSION AND ORDER
Plaintiff’s motion to compel compliance with
the Court’s order is granted in part and denied in part.
The Court grants the motion in part such that
the Court orders Defendant to produce his financial and income statements
showing his net worth, which accurately represent his income in the past 3
years within 20 days of this order. Defendant and his counsel
of record, jointly and severally, are ordered to pay monetary sanctions in the
amount of $5,931.90 to Plaintiff, by and through counsel, within 20 days of
notice of this order. The Court permits the
Plaintiff to direct a subpoena to Defendant’s accountancy firm and to conduct a
six-hour deposition of the person most knowledgeable regarding the Defendant’s
affairs.
The Court denies without prejudice Plaintiff’s
motion as to the remainder of the requests.
Plaintiff shall provide notice of
this order.