Judge Lee W. Tsao, Case 20NWCP00021 2023-05-04 Tentative Ruling

Judge: Lee W. Tsao, Case: 20NWCP00021, Date: 2023-05-04 Tentative Ruling

Case Number: 20NWCP00021 Hearing Date: May 4, 2023 Dept: C

KIM v. CHANG

CASE NO.: 20NWCP00021

HEARING: 05/04/23

TENTATIVE ORDER

I. The Court has reviewed the parties’ declarations filed with respect to the OSC Re: Evidentiary/Monetary Sanctions scheduled by Judge Yerkey on March 8, 2023. The Court does not find adequate grounds to issue Terminating, Issue, or Evidentiary Sanctions at this time. The parties are not foreclosed from filing and serving a properly noticed Motion for Terminating, Issue, and/or Evidentiary Sanctions, if necessary. A request to advance or specially set such Motion to an earlier date than CRS might currently allow may be made ex parte. Monetary sanctions in favor of Petitioner are GRANTED in the amount of $1,000.00, payable by Respondents and their Counsel of Record by no later than 30 days from the date of the Court’s issuance of this Order .

II. The Motion for Attorney Fees is GRANTED.

Petitioner to give notice.

OSC re: Evidentiary/Monetary Sanctions

CCP §2023.010 includes: “(d) Failing to respond or to submit to an authorized method of discovery.” CCP §2023.030 provides, in part: “To the extent authorized by this chapter governing any particular discovery method or any other provision of this title, the court, after notice to any affected party, may impose the [sanctions] against anyone engaging in conduct that is a misuse of the discovery process, including monetary and issue and terminating sanctions.” Failing to respond to an authorized method of discovery and disobeying a court order to provide discovery are both misuses of the discovery process.” (CCP §§2023.010 (d) and (g).) Sanctions which may be imposed for a misuse of the discovery process include “terminating sanctions.”

Issue sanctions are appropriate where there is a misuse of the discovery process. (CCP §2023.030(b).) Evidentiary sanctions are appropriate where, “[b]ecause the persistent refusal to comply with discovery requests is equated with an admission that the disobedient party has no meritorious claim in regard to that issue, the appropriate sanction for such conduct is the preclusion of that evidence from trial, even if that proves determinative in terminating the offending party’s case.” (Karlsson v. Ford Motor Co. (2006) 140 Cal.App.4th 1202, 1219.)

It is a commonly stated axiom that 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.” (Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 793.) However, a court is empowered to apply the ultimate sanction against a litigant who persists in the outright refusal to comply with discovery obligations. The refusal to reveal material evidence is deemed to be an admission that the claim or defense is without merit. (Id. at 794-795.)

The Court does not find that terminating, issue, or evidentiary sanctions are warranted at this time because Respondents have not completely abandoned their duties to respond to discovery or comply with Court Order(s). The Judgment on the Petition for Writ of Mandate states: “A peremptory writ of mandate shall and does issue commanding Respondents to grant petitioner access to inspect and copy all books, records, and documents of every kind in S&H Business Management, Inc., including the records, accounts, and books, backed up in multiple locations remotely and pursuant to California Corporations Code sections 1600 et seq…..” (02/03/23, Judgment). The Court’s March 8, 2023 Order states: “Respondents are ordered to make available to the Petitioner for inspecting and copying all appropriate documents/records on 03/22/2023 at 10:00 a.m., at the Tokyo Garden restaurant…. [¶] The Respondents are to have all of their computers present at the Tokyo Garden restaurant location, even if they are required to bring them from other locations. [¶] The Respondents are to have all of their paper documents/records present at the Tokyo Garden restaurant location.” (03/08/23, Min. Order.)

It is undisputed that Respondents have not fully complied with the Judgment or the March 8, 2023 Order. To the Court’s knowledge, only one laptop and only some hardcopies of responsive documents were produced on March 22, 2023. Moreover, at this time, it is unclear whether Petitioner’s have been granted full access to Respondent’s database.

The Court’s denial of the issuance of terminating, issue, and/or evidentiary sanctions at this time is without prejudice. If necessary, these sanctions may be sought again via properly noticed motion. Petitioner may appear ex parte to shorten time or specially set such Motion.

Given the fact that Respondent has failed to fully comply with this Court’s Orders, the Court finds that monetary sanctions are warranted. Monetary sanctions are GRANTED in the amount of $1,000.00 payable by Respondents BYUNG HA CHANG; S&H BUSINESS MANAGEMENT, INC.; and their and its counsel of record, Jake Y. Jung and the Law Offices of Yohan Lee, to Petitioner and their counsel of record within 30 days of the date of the Court’s issuance of this Order.

Motion for Attorney Fees

“In any action or proceeding under Section 1600 or Section 1601, if the court finds the failure of the corporation to comply with a proper demand thereunder was without justification, the court may award an amount sufficient to reimburse the shareholder or holder of a voting trust certificate for the reasonable expenses incurred by such holder, including attorney’s fees, in connection with such action or proceeding.” (Cal. Corp. Code §1604.)

On February 2, 2023, Judgment was entered, wherein the Court found that “Respondents, without justification, refused Petitioner’s inspection demands pursuant to California Corporations Code sections 1600 et seq. [¶] Pursuant to Corporations Code section 1604, Petitioner is the prevailing party entitled to recover attorney’s fees and those costs not specified in Corporations Code section 1603 (c), jointly and severally, against Respondents S&H Business Management, Inc., and Byung Ha Chang. [¶] Petitioner is the prevailing party entitled to recover those costs specified in Corporations Code section 1603 (c) against Respondent S&H Business Management, Inc. [¶] Accordingly, Petitioner is directed to file its noticed Motion for attorney’s fees and costs.” (02/02/23, Judgment.)

Cal. Corp. Code §1604 authorizes the award of attorney’s fees and costs to Petitioner.

When assessing the amount of any attorney’s fee award, courts typically determine what is reasonable through the application of the “lodestar” method. Under the lodestar method, a base amount is calculated from a compilation of (1) time reasonably spent and (2) the reasonable hourly compensation of each attorney. (Serrano v. Priest (“Serrano III”) (1977) 20 Cal.3d 25, 48); (See also Meister v. Regents of University of California (1998) 67 Cal.App.4th 437, 448-449 holding that the lodestar method applies to statutory attorney fees award unless the underlying statute provides for another method of calculation). Normally, a “reasonable” hourly rate is the prevailing rate charged by attorneys of similar skill and experience in the relevant community. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.) That amount may then be adjusted through the consideration of various factors, including “(1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, and (4) the contingent nature of the fee award.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.) The Court is vested with discretion to determine which claimed hours were reasonably spent, and what an attorney’s reasonable hourly rate is. (Dover Mobile Estates v. Fiber Form Products, Inc. (1990) 220 Cal.App.3d 1494, 1501); (See also Flannery v. California Highway Patrol (1987) 61 Cal.App.4th 629, 644.) [“We readily acknowledge the discretion of the trial judge to determine the value of professional services rendered in his or her court.”].

Petitioner seeks: $137,460.00 in attorney’s fees; $1,557.12 in costs; $15,610 in Expert Fees; and $1,866.80 om Court Reporters Fees.

In Opposition, Respondents argue that the amount of fees sought is excessive.

Petitioner’s motion seeks fees based on the following hourly rates: $400/hr.; $125/hr.; and $200/hr. The Court may consider the prevailing rate for attorneys of similar skill and experience in providing comparable legal services in the community. (City of Oakland v. Oakland Raiders (1988) 203 Cal.App.3d 78, 82-83.). The Court finds Counsels’ hourly rates reasonable. The Court further finds that Petitioner’s claimed costs are reasonable—including the costs incurred by having to retain digital forensic analysts.

Ultimately, the Court finds that Petitioner has established an entitlement to the entire amount of attorney’s fees and costs requested in the total amount of $156,493.92. The Court’s determination is undertaken in the exercise of its discretion to determine whether rates or hours are reasonable. (Dover Mobile Estates v. Fiber Form Products, Inc. (1990) 220 Cal.App.3d 1494, 1501.)

The Motion is GRANTED.