Judge: Kevin C. Brazile, Case: 21STCV28808, Date: 2023-01-25 Tentative Ruling

Hearing Date: January 25, 2023

Case Name: Digital Dolphin Supplies, LLC v. Cotton, et al.

Case No.: 21STCV00223

Matter: Motion to Compel Compliance

Moving Party: Defendants Justin Cotton and Quire Office Products LLC

Responding Party: Plaintiff Digital Dolphin Products, LLC

Ruling: The Motion to Compel Compliance is granted in part.

Moving parties to give notice.

If counsel do not submit on the tentative, they are strongly 

encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic. 

On January 5, 2021, Plaintiff Digital Dolphin Products, LLC filed the operative Complaint against Defendants Justin Cotton and Quire Office Products LLC for (1) breach of fiduciary duty, (2) misappropriation of trade secrets, (3) breach of contract, (4) interference with contractual relations, and (5) interference with prospective economic advantage.  Plaintiff alleges that Defendants stole Plaintiff’s trade secrets and created a competing business while still employed by Plaintiff. 

On April 15, 2022, Justin Cotton and Quire Office Products LLC, individually and on behalf of others similarly situated, filed a Second Amended Cross-Complaint against Digital Dolphin Products, LLC, a California LLC, and Digital Dolphin Products, LLC, a Nevada LLC, for (1) violation of Bus. & Prof. Code § 17200, (2) declaratory relief, (3) breach of contract, (4) violation of Penal Code § 496, (5) fraud, (6) fraudulent concealment, and (7) nonpayment of wages.  Among other things, Cross-Complainants allege that the Digital Dolphin entities fraudulently underpaid commissions on sales of personal protective equipment (“PPE”).  

 Defendants Justin Cotton and Quire Office Products LLC now seek to compel Digital Dolphin Products, LLC to comply “with its agreement to produce 2020 and 2021 balance sheets and profit and loss statements[ ] in response to its agreement to produce documents responsive to RFP Nos. 126, 127, 131, and 132.”

“If a party filing a response to a demand for inspection, copying, testing, or sampling under Sections 2031.210, 2031.220, 2031.230, 2031.240, and 2031.280 thereafter fails to permit the inspection, copying, testing, or sampling in accordance with that party’s statement of compliance, the demanding party may move for an order compelling compliance.”  (Code Civ. Proc. § 2031.320(a).)

Plaintiff’s counsel has filed a declaration stating that he “was out of state in El Paso, Texas with family when Defendants’ Motion was filed and served on December 22, 2022. [ ] Digital Dolphin produced the requested documents on January 2, 2023 [See Exh. A]. . . . I have subsequently advised counsel for Defendants that the documents have been produced. Counsel for Defendants responded that the 2021 profit and loss statement had not been submitted. I explained that Digital Dolphin produced the income statement submitted to the IRS and that is a profit and loss statement. [See Exh. B].” 

In Reply, Defendants contend, “After we filed this motion, on January 2, Digital Dolphin produced its accounting profit and loss statement for 2021. [ ] It has the critical information for assessing damages. . . . Digital Dolphin still has not produced its accounting profit and loss statement for 2020. [ ]  Instead, as Mr. Lamb concedes, Digital Dolphin produced a ‘federal income tax summary’ that Digital Dolphin filed with the IRS. This non-accounting document is useless. It doesn’t list the commissions for employees. So it’s impossible to use this ‘income tax summary’ to determine damages.”

The subject tax summary is similar to a profit and loss statement.  However, because Plaintiff did not submit an actual profit and loss statement for 2020, the Motion to Compel Compliance is granted in part.  This document should be produced within twenty days.  

The Court declines to award sanctions because the moving papers failed to include a declaration on the issue of counsel’s hourly rates.  

Moving parties to give notice.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.