Judge: Lon F. Hurwitz, Case: 17-00910966, Date: 2023-06-16 Tentative Ruling
1. Motion to Amend the Complaint
2. Motion to Quash Discovery Subpoena
Motion to Amend the Complaint
Moving Party: Plaintiffs South Coast Shipyard, Inc. and Peter Stewart
Responding Party: Defendants Earth Support Systems, Inc., Wieland-Davco Corp., NPBeach Marina LLC fka NPB Marina LLC, and Blue Iron, Inc. (with joinder by Cross-Defendant Clauss Construction).
RELIEF SOUGHT: Plaintiffs seek an order authorizing the filing of the First Amended Complaint
UPCOMING EVENTS: Two Motions for Judgment on the Pleadings, and Status Conference, 8/16/2023
FACTS/OVERVIEW: This is a negligence and continuing nuisance action. On March 23, 2017, Plaintiffs South Coast Shipyard, LLC and Peter Stewart (“Plaintiffs”) filed their Complaint alleging claims arising out of the design and construction of a mixed-use, residential and commercial development commonly referred to as the “Newport Bay Marina” or “Vue” Project [Hereinafter “Project”]. Plaintiffs asserted two causes of action for Negligence and Continuing Nuisance against Defendants NPB Marina, LLC; NPBeach Marina, LLC; Wieland-Davco Corporation; Clauss Construction; Earth Support Systems, Inc. (Doe 6); C & V Consulting, Inc.; Blue Iron, Inc. (Doe 16); several individuals; and Does 1 through 120. (ROA 2.)
Plaintiffs, who are the tenants/lessees of the property adjacent to the Project, operate a business that performs repairs and maintenance on large boats and ships. Plaintiffs allege that the design and construction activity at the Project caused damages to their leased property.
Defendants NPBeach Marina, LLC and Wieland-Davco Corporation, filed a cross-complaint against Defendant Clauss Construction for implied and express contractual indemnity, equitable indemnity, breach of contract, breach of express and implied warranty, contribution, and declaratory relief. (ROA 273.) NPBeach Marina and Wieland-Davco are the owner and general contractor, respectively, of the Project. Clauss Construction was involved in demolition work in connection with the Project.
Defendant Clauss Construction filed a cross-complaint against Wieland-Davco, NPBeach Marina, Blue Iron, Inc., and Moes 1 through 50 for indemnity and contribution. (ROA 283.)
On September 17, 2021, the Court granted Clauss Construction’s motion for good faith settlement with Plaintiffs. (ROA 479.)
On July 14, 2022, a Stipulation and Order was signed and filed continuing the August 22, 2022 trial date to November 28, 2022, and extending the five-year statute to bring the case to trial. (ROA 551.) The Stipulation continued expert discovery, motion, and trial-related cut-off dates to correspond with the new trial date. However, the Stipulation contained an express condition that the fact discovery cut-off date would remain July 22, 2022. (Ibid.)
Due to extensive law and motion, the Court continued the trial date to January 23, 2023, and then again to February 27, 2023. (ROA 770.) Later, the Court continued the trial date to March 6, 2023. (ROA 790.)
On February 3, 2023, the Court conducted an impromptu trial readiness hearing to discuss issues arising from the Court's review of various motions in limine. (ROA 1028.) One of the issues pertained to the fact that as of August 5, 2022, ownership of the Project property had been transferred to Peninsula Village, LLC and Vue Investor Owner, LLC. The Court determined “that per CCP 583.340(c), bringing the action to trial is impossible, impracticable, or futile as there is an indispensable party not in the lawsuit.” (Ibid.) The Court then vacated the March 6, 2023 trial date and set a status conference for August 16, 2023.
On April 7, 2023, Plaintiffs filed the current Motion to Amend the Complaint, purportedly in order to add the indispensable parties as defendants. (ROA 1035.) Defendant Earth Support Systems, Inc. filed an opposition. (ROA 1055.) Defendants Wieland-Davco, NPBeach Marina fka NPB Marina, and Blue Iron separately oppose. (ROA 1057.) Cross-Defendant Clauss Construction joins in both oppositions. (ROA 1063.) Plaintiffs replied to each opposition separately. (ROA 1065, 1069.)
EVIDENTIARY OBJECTIONS: (ROA 1067)
Plaintiffs have submitted several objections to the Declaration of Carlo A. Coppola that is attached to the opposing brief filed by Defendants Wieland-Davco, NPBeach Marina, and Blue Iron. The rulings are as follows:
1. Overruled
2. Overruled
3. Overruled
4. Sustained – inadmissible argument and improper opinion
5. Overruled
6. Sustained – inadmissible argument and improper opinion
7. Sustained – inadmissible argument
8. Sustained – inadmissible argument
9. Sustained – relevance
10. Sustained – relevance
11. Sustained – relevance
Statement of the Law
Motions for leave to amend are left to the sound discretion of the court. (Code Civ. Proc., § 473, subd. (a).) Judicial policy favors resolution on the merits; thus, the court will usually liberally grant leave to amend a pleading. (Nestle v. Santa Monica (1972) 6 Cal.3d 920, 939.) If a motion to amend is timely made and the granting of the motion will not prejudice the opposing party, it is error to refuse permission to amend; and, where the refusal also results in a party being deprived of the right to assert a meritorious cause of action or a meritorious defense, it is not only error, but an abuse of discretion. (Morgan v. Superior Court (1959) 172 Cal.App.2d 527, 530.)
Ordinarily, the court does not consider the validity of the proposed amendment. Grounds for demurrer or motion to strike are premature. (Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048.) The court undoubtedly has discretion to deny leave to amend where a proposed amendment fails to state a valid cause of action or defense. Such denial is “most appropriate” where the pleading is deficient as a matter of law, and the defect could not be cured by further appropriate amendment. (California Casualty General Ins. Co. v. Sup. Ct. (1985) 173 Cal.App.3d 274, 280-281, disapproved on other grounds in Kransco v. American Empire Surplus Lines Ins. Co. (2000) 23 Cal.4th 390, 407).)
Procedurally, a motion to amend a pleading must: (1) Include a copy of the proposed amendment or amended pleading, which must be serially numbered to differentiate it from previous pleadings or amendments; (2) State what allegations in the previous pleading are proposed to be deleted, if any, and where, by page, paragraph, and line number, the deleted allegations are located; and (3) State what allegations are proposed to be added to the previous pleading, if any, and where, by page, paragraph, and line number, the additional allegations are located. (Cal. Rules of Court, rule 3.1324(a).)
Additionally, a separate declaration must accompany the motion and specify: (1) The effect of the amendment; (2) Why the amendment is necessary and proper; (3) When the facts giving rise to the amended allegations were discovered; and (4) The reasons why the request for amendment was not made earlier. (Cal. Rules of Court, rule 3.1324(b).)
Merits
Pursuant to this Court’s February 2, 2023 determination, Plaintiffs now seek to amend the Complaint to add the indispensable parties, Peninsula Village, LLC and Vue Investor Owner, LLC as defendants. According to Plaintiffs, because the original Complaint was not drafted in a manner that anticipated a transfer of the Vue property during the pendency of this litigation, it is necessary to amend the original Complaint to comply with this Court’s order to join Peninsula Village, LLC and Vue Investor Owner, LLC as parties.
The proposed First Amended Complaint seeks to expand the original pleading from 14 pages to 62 pages by adding 148 new allegations and more than 60 pages of exhibits. In addition, the proposed FAC deletes a party, changes the name of another party, adds multiple defendants that purportedly own the Vue Project, and adds another defendant, Vertical Earthworks, Inc., as Doe 17. [See, Proposed First Amended Complaint, attached as Exhibit 14 to Declaration of David Dimitruk submitted in Support of Plaintiff’s Motion to Amend the Complaint (ROA 1036).]
Plaintiffs contend such an expansive amendment is necessary because joining the indispensable parties to this action “compels the plaintiffs to inform the transferees of the complexities that the plaintiffs have discovered about the associated and enmeshed ways that a variety of construction-related activities, circumstances and conditions have resulted in different causes of the several kinds of damage to the Shipyard Property at different times and over time.” [Motion, 8:19-9:2.] Plaintiffs also contend that pursuant to this Court’s January 6, 2023 Order, it is necessary to include their written lease to the Shipyard property as an exhibit. (ROA 790.) Plaintiffs go on to contend that it is also necessary to include “the allegations that pertain to [the Lease] to avoid confusing the transferees and to also include the many additional allegations to establish the right—a right that the courts have classified as a fundamental right—for South Coast to operate the business on the Shipyard Property.” [Motion 9:10-14, referring to Paras. 3 through 29 of the proposed FAC.] In addition, Plaintiffs contend that due to the recent challenge by Earth Support Systems to Plaintiffs’ standing to sue [On November 29, 2022, Defendant Earth Support Systems filed a bifurcation motion (ROA 732) in which they argued that Plaintiffs did not have standing to prosecute their claims. [Dimitruk Decl., ¶ 6.], they have the right to include jurisdictional facts necessary to defeat that challenge.
Plaintiffs also contend that many of the proposed amendments are necessary because it appears the transfer of the Vue property to the indispensable parties may not be valid. According to Plaintiffs, a review of the recorded instruments shows an apparent break in the chain of title that raises the question of whether the putative transferor, NPBeach Marina, LLC, was the fee simple owner and title holder of the Vue property that had the legal right to transfer the property to Peninsula Village, LLC and Vue Investor Owner, LLC. [Declaration of David Dimitruk (“Dimitruk Decl.”), ¶¶ 12, 15-32, and Exhs. 3 and 6.]
Lastly, Plaintiffs contend such an extensive amendment is necessary because they cannot repeat the same 48 allegations that were previously alleged on information and belief. [Dimitruk Decl., ¶¶ 33-33.10, 52.3.] As argued by Plaintiffs, their claims involve complex geotechnical and engineering principles related to the alleged various causes of damage to the Shipyard property. In addition, Plaintiffs argue that an abatement remedy, like the one sought in this litigation, is not a fixed remedy; it must be tailor-made and crafted based on the relevant facts. Plaintiffs contend that as a result, it is no longer “statutorily” possible for them to state the same allegations because of the knowledge they have acquired during the course of this litigation “and because of the effects of Code of Civil Procedure section 128.7(b)(1) – (3).” [Motion, 10:12-13; Code of Civil Procedure section 128.7, subdivision (b)(1) through (b)(3) pertains to an attorney’s signature certifying that court filings are not being presented for any improper purpose, the allegations and contentions contained therein have evidentiary support, and the claims and legal contentions contained therein are warranted by existing law].Therefore, Plaintiffs argue that Defendants do not have the right to dictate how Plaintiffs meet their pleading burden and reject Defendants’ contention that such an extensive amendment to the original Complaint is improper.
All of the opposing Defendants contend that Plaintiffs’ proposed amendments are improper and go beyond the scope of this Court’s Order regarding the joining of the indispensable parties. According to the Defendants, Plaintiffs’ proposed FAC is nothing more than an attempt to relitigate this entire matter in order to correct Plaintiffs’ errors related to their failure to conduct appropriate and thorough discovery to support their claims and failure to bring this matter to trial within the statutory time period. Defendants note that in the proposed FAC, Plaintiffs have added a defendant other than the identified indispensable parties, deleted a party, changed the name of another party, and added allegations referencing dismissed defendants, earlier rulings on summary judgment motions, and prior settlements. In addition, Defendant Earth Support Systems contends Plaintiffs also seek to add dozens of new paragraphs that copy and paste from documents and plans, and that attempt to summarize discovery in this case. Earth Support Systems also argues that it did not contemplate Plaintiffs would seek such an extensive amendment of the Complaint, especially since the indispensable parties are not “new,” but rather are affiliated with the prior owner, NPBeach Marina.
The opposing Defendants also note that fact discovery has been closed since July 22, 2022, expert discovery has been closed since November 28, 2022, and approximately 30 motions in limine have already been filed by Defendants in anticipation of trial. Defendants argue that if Plaintiffs are allowed to file the proposed FAC, it will be necessary to re-open non-expert and expert discovery, and re-draft and re-file some or all of the motions in limine. Regarding this latter point, Defendants also contend that they will be severely prejudiced if the motion to amend is granted because Plaintiffs have now had a free look at Defendants’ trial strategy. As argued by Defendant Earth Support Systems, Plaintiffs should not be allowed to benefit from their “purposeful litigation gamesmanship when they withheld their knowledge that the title to the [Project] property had reverted to the HOA until after expert discovery was over, Motions in Limine filed and served, and the defendants engaging in years-worth of discovery and trial preparation on the basis of the allegations in the Complaint.” [Earth Support Systems’ Opp. Brief, 7:1-4.]
In support of this argument, Defendant Earth Support Systems points to their Motion to Quash that is to be heard concurrently with the instant motion. According to Earth Support Systems, soon after this Court issued its February 3, 2023 Order, Plaintiffs served document subpoenas on project design professionals—purported witnesses about whom Plaintiffs have known for several years, but from whom Plaintiffs never bothered to subpoena records until now. Earth Support Systems argues that this requested discovery has no bearing on the addition of the indispensable parties to this case.
Defendants Wieland-Davco, NPBeach Marina, and Blue Iron also contend that Plaintiffs lack standing to assert a right to recovery of the damages alleged in the proposed FAC. These Defendants note that Plaintiffs are only lessees of the Shipyard property, and that Plaintiffs’ claims arise out of their maintenance and repair obligations under the operative Lease. [Coppola Decl., ¶ 8, and Exh. B.] Defendants argue that as lessees, Plaintiffs’ recovery at bar is limited to their present maintenance and repair obligations, and therefore, their recovery against Defendants is similarly limited. (ASP Properties Group v. Fard, Inc. (2005) 133 Cal.App.4th 1257.) Defendants contend that to allow Plaintiffs to amend the Complaint to allege a recovery beyond the cost of present maintenance and repair would possibly subject Defendants to paying double damages if the owners of the Shipyard Property bring suit in the future.
In that regard, Defendants contend that the proposed FAC fails to cure Plaintiffs’ lack of standing. Defendants note that the owners of the Shipyard Property are not named as parties in the proposed FAC. Defendants argue that without joining these owners, this action cannot proceed because Plaintiffs cannot cure the standing issue. According to Defendants, the right of Plaintiffs’, as lessees, to recover for damages to the Shipyard Property depends on whether Plaintiffs are required to make the repairs for which they are seeking damages. Defendants note that per the proposed FAC, the repairs sought will cost approximately $8 million. However, Defendants contend that since Plaintiffs cannot make the repairs contemplated without violating the Lease, Plaintiffs lack standing to sue Defendants for damages measured by the cost of future repairs.
Defendants also contend the proposed FAC is procedurally inadequate. As a preliminary matter, Defendants contend there is no reasonable excuse for Plaintiffs’ delay in seeking leave to amend. Defendant Earth Support Systems contends that at some point between August 2022, when title to the Vue property was transferred, and January 2023, when Plaintiffs revealed the transfer in their oppositions to the motions in limine, Plaintiffs must have been aware of the conveyance to the indispensable parties. However, Plaintiffs did not seek to amend upon learning of the conveyance. All of the opposing Defendants argue that Plaintiffs’ delay in seeking leave to amend is insurmountable, and the proposed FAC will result in relitigation of this entire matter.
Defendants Wieland-Davco, NPBeach Marina, and Blue Iron also contend the instant motion fails to comply with CRC Rule 3.1324(b). According to these Defendants, Plaintiffs’ supporting declaration fails to state why the proposed amendment is necessary and proper, when the facts giving rise to the amended allegations were discovered, and the reasons why the request for leave to amend was not made earlier. Defendants argue that aside from naming the new owners of the Vue property, the remaining proposed amendments consist of facts Plaintiffs have known about since the onset of this litigation.
Plaintiffs’ arguments are not well taken. As a preliminary matter, a review of this Court’s February 3, 2023 Order is necessary. On February 2, 2023, the Court requested a Zoom conference for February 3, 2023. (ROA 1020.) At the February 3, 2023 hearing, the Court stated it set the hearing “to inquire of counsel as to issues of which the Court questions whether the case is ready for trial.” (ROA 1028.) One of the issues was that as of August 5, 2022, the originally- named Defendant owners no longer owned the Vue property. The Court then noted, “If there is a nuisance cause of action with abatement being sought, how would that apply now that there are new property owners[?] The two parties missing from the case are the new owners.” (Ibid.) The Court then found it was “impossible, impracticable, or futile” to bring the action to trial because the indispensable parties were not in the lawsuit. (Ibid.)
Although it is not explicitly stated in the Minute Order, it is presumed the parties and the Court agreed that amending the Complaint to add the indispensable parties was necessary before the matter could proceed to trial. However, it is also noted that the Minute Order does not contain any indication that an extensive amendment of the Complaint would be necessary to add the indispensable parties as defendants in the action.
Plaintiffs contend they “have the prerogative” to amend the original Complaint to allege facts selected from “the incalculable items of information contained in thousands of pages of documents, photographs and videos” in order to inform the newly added indispensable parties of their potential liability as to Plaintiffs’ claims. Indeed, Plaintiffs’ foundational argument in support of the instant motion is that such an extensive amendment is required because the indispensable parties must be informed of all of the factual complexities underlying Plaintiffs’ claims against them.
However, Plaintiffs’ argument is belied by the very chronology of this litigation; Plaintiffs have not previously exhibited such concern. In June 2018, Plaintiffs filed two Doe amendments to add Defendant Earth Support Systems and Blue Iron, Inc. as named defendants to this litigation. But contrary to Plaintiffs’ current position, Plaintiffs did not seek leave to amend the Complaint at that time to acquaint Earth Support Systems and Blue Iron of the factual underpinnings of Plaintiffs’ claims against them. (ROA 162, 163.) Similarly, when Clauss Construction filed a cross-complaint in May 2019 and subsequently named Vertical Earthworks, Inc. as Moe 1, Plaintiffs did not seek to leave to amend the Complaint at that time. (ROA 283.) Yet, Plaintiffs’ proposed FAC now seeks to add Vertical Earthworks as Doe 17, as well as allege additional allegations related to this Doe Defendant. [Dimitruk Decl., ¶ 52.8.]
These facts alone contradict Plaintiffs’ current assertion that it is “imperative” that the proposed FAC expand the original Complaint from 14 pages to 62 pages and add 148 new allegations as well as new exhibits. If Plaintiffs had such an imperative, it seems they would have sought to exercise it before now when other defendants were first named after the initiation of this litigation.
More substantively, the chronology of Plaintiffs’ apparent discovery of the conveyance of the Vue Property—the event which gave rise to the indispensable parties at issue—also raises question as to the diligence of Plaintiffs and their counsel in discovering information that they now seek to include in the proposed FAC. Counsel attests that he did not learn of the conveyance to the indispensable parties until November 28, 2022, when he was preparing for trial. [Dimitruk Decl., ¶ 12.] It is noted that counsel attests that prior to November 2022, he had obtained the November 2012 deed transferring the Vue Property from the prior owner to NPB Marina, LLC. [Id. at ¶ 12.] Counsel also attests that he had previously ascertained from official records that Defendant NPB Marina, LLC changed its name to NPBeach Marina, LLC in December 2012. [Id. at ¶ 13.] Yet, counsel attests that upon discovering the grant deed to the indispensable parties, he did not immediately compare the legal descriptions and entity names. [Id. at ¶¶ 14, 15.] He does not explain exactly when he discovered the purported gap in the chain of title or why he did not bring this to the attention of the Court before January 30, 2023, in the Request for Judicial Notice associated with Plaintiffs’ oppositions to Defendants’ motions in limine. (ROA 954.)
Plaintiffs’ counsel also does not adequately explain why the proposed amendments are necessary and proper at this time. Counsel only attests that the many additional allegations in the proposed FAC “that represent information and facts that have been learned from the documents and photographs provided during discovery are necessary to include instead of the 48 allegations based on information and belief as well as support for the allegations about the various causes of the damage to the Shipyard Property.” [Dimitruk Decl., ¶ 41.] Counsel also attempts to justify the necessity of adding two dozen allegations related to Defendant Earth Support Systems, even though Earth Support Systems was named as a Doe defendant in June 2018 and do not have anything to do with the indispensable parties. [Dimitruk Decl., ¶ 49.]
Essentially, counsel attests that the additional allegations in the proposed FAC have been included to support Plaintiffs’ allegations of causation and damages. [Dimitruk Decl., ¶ 47.] However, these supporting allegations are admittedly based on counsel’s review and evaluation of thousands of pages of discovery documents and expert testimony. [Id. at ¶¶ 38-47.] Notably, this crafting of the proposed FAC came after Defendants had filed 30 motions in limine. [Id. at ¶ 53.]
Two primary factors should be considered by the Court when evaluating the proposed amendment to a complaint: (1) the subjective element of lack of diligence, and (2) any prejudicial effect of the delay on the adverse party. (5 Witkin, California Procedure (6th ed.), Pleading, § 1244 (2023).) Although courts are bound to apply a policy of great liberality in permitting amendments to the complaint at any stage of the proceedings, this policy should be applied only where no prejudice to the defendant is shown. (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761.)
Prejudice exists where the amendment would require delaying the trial, thus resulting in the loss of critical evidence, the burden of additional discovery, or added costs of preparation. (Aghaji v. Bank of America (2016) 247 Cal.App.4th 1110, 1120; Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 486-488.) The fact that the amendment involves a change in legal theory which would make admissible evidence damaging to the opposing party is not the kind of “prejudice” the court should consider. (Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 490.) However, even if some prejudice is shown, the court may still permit amendment, but impose conditions.
Courts have held that leave may be denied when the party seeking the amendment has been dilatory and the delay has prejudiced the opposing party. (Payton v. CSI Elec. Contractors, Inc. (2018) 27 Cal.App.5th 832, 849.) “It is well settled that a long-deferred presentation of the proposed amendment without a showing of excuse for the delay is itself a significant factor to uphold the trial court’s denials of the amendment.” (Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 613.)
Here, in the current litigation, Plaintiffs have not provided adequate justification for such an expansive amendment to the original Complaint. As noted above, this Court implied that the indispensable parties needed to be added to the litigation before the case moved to trial. While Plaintiffs must amend the Complaint to add the indispensable parties, that can be done by a simple Doe Amendment. The Complaint alleges both causes of action as against “all defendants”; and the Complaint names Does 1 through 120 as Defendants. There is no authority supporting the need for a complete re-write and expansion of a complaint simply to add parties, especially if no new causes of action are being added. [See, Dimitruk Decl., ¶ 52.1.] Counsel’s declaration fails to adequately explain why such a major overhaul of the Complaint is necessary and proper.
RULING:
The Motion to Amend the Complaint of Plaintiffs South Coast Shipyard, Inc. and Peter Stewart is DENIED.
Clerk to give notice.
Motion to Quash Deposition Subpoenas for Production of Business Records
Moving Party: Defendant Earth Support Systems, Inc. [hereinafter “ESSI”].
Responding Party: Plaintiffs South Coast Shipyard, Inc. and Peter Stewart
SERVICE: April 14, 2023, by U.S. Mail and email
RELIEF SOUGHT: Defendant seeks an order quashing the Deposition Subpoenas for Production of Business Records served by Plaintiffs on third-party witnesses. Defendant also seeks an order that Plaintiffs and their counsel, jointly and severally, pay the reasonable costs and attorneys’ fees incurred by Defendant as sanctions.
CONTENTIONS AND ANALYSIS:
Statement of the Law
Code of Civil Procedure section1987.1, subdivision (a), states in relevant part:
If a subpoena requires the attendance of a witness or the production of books, documents, or other things before a court, or at the trial of an issue therein, or at the taking of a deposition, the court, upon motion reasonably made by any person described in subdivision (b), or upon the court's own motion after giving counsel notice and an opportunity to be heard, may make an order quashing the subpoena entirely, modifying it, or directing compliance with it upon those terms or conditions as the court shall declare, including protective orders. In addition, the court may make any other order as may be appropriate to protect the person from unreasonable or oppressive demands, including unreasonable violation of the right of privacy of the person.
The motion may be brought by a party, witness, consumer, employee, or person whose personal identifying information is sought. (Code Civ. Proc., §1987.1, subd. (b).)
If a party seeks to subpoena personal records (e.g., medical records), then the party must serve on the consumer, whose records are sought, a notice to the consumer. (Code Civ. Proc., §1985.3, subd. (b).) If that consumer is a party who objects to such production, then he can seek to quash or modify that subpoena under section1987.1. (Code Civ. Proc., §1985.3, subd. (g).) Five days prior to production, notice of the motion must be given to the deposition officer and witness. (Code Civ. Proc., §1985.3, subd. (g).)
The court may in its discretion award the amount of the reasonable expenses, including attorney fees, incurred in making or opposing a motion to quash brought under either section 1987(c) or section 1987.1, if the court finds that the motion was made or opposed in bad faith or without substantial justification or that one or more requirements of the subpoena were oppressive. (Code Civ. Proc. §1987.2, subd. (a).)
Merits
On or about March 14, 2023, Plaintiffs served Deposition Subpoenas for Production of Business Records on third-party witnesses, Plamen Petrov, Stoney-Miller Consultants, Inc. dba Geofirm, and William Simpson & Associates, Inc. (collectively, “Project Design Professionals”). These third-party witnesses were involved in the original design and construction of the Project. Plaintiffs seek the production of voluminous records related to the design of the Project Design Professionals, as well as all of their reports and communications with all parties and other witnesses since January 2009. [See, Exhibit A to Declaration of Jean A. Dalmore (“Dalmore Decl.”).]
Defendant ESSI contends that these deposition subpoenas were served in violation of Code of Civil Procedure section 2024.020, subdivision (a) and (b), which require discovery motions to be heard on or before the 15th day before the date initially set for trial. ESSI contends that on July 11, 2022, the parties entered into a Stipulation agreeing to continue the November 28, 2022 trial date on the express condition that the fact discovery cut-off was to remain July 22, 2022. [Dalmore Decl., Exh. B.] ESSI argues that pursuant to that Stipulation, Plaintiffs are precluded from obtaining documents through the issuance of deposition subpoenas. In addition, ESSI contends Plaintiffs are precluded from re-opening discovery under the doctrine of laches because Plaintiffs have unreasonably delayed serving the subject deposition subpoenas. According to ESSI, Plaintiffs have known about the Project Design Professionals for almost six years, but they never sought to obtain these documents and records before now. ESSI also argues that Plaintiffs should be equitably estopped from re-opening discovery or obtaining documents through the deposition subpoenas.
ESSI’s counsel attests that she met and conferred with Plaintiffs’ counsel in an attempt to have the deposition subpoenas withdrawn and have Plaintiffs file a motion to re-open discovery instead. However, Plaintiffs refused to do so. [Dalmore Decl., ¶ 3 and Exh. C.] During the meet and confer process, Plaintiffs made arguments sounding in due process and fundamental and statutory rights to present evidence at trial. ESSI rejected those arguments and filed the instant motion.
ESSI anticipates that Plaintiffs will argue they must conduct discovery as to the two parties that the Court deemed indispensable at the February 3, 2023 hearing. In the concurrent Motion to Amend the Complaint, Plaintiffs seek to amend the original Complaint to add these indispensable parties and allege additional supporting facts. ESSI argues, however, that Plaintiffs’ claims and allegations have not changed, and all of the evidence Plaintiffs needed to prepare their case against the previous owner of the Vue Property, Defendant NPBeach Marina, is exactly the same as the evidence needed to prove their case against the indispensable parties who now own the Property. ESSI notes that the indispensable parties did not have any involvement with the design and construction of the Vue Project.
In opposition, Plaintiffs contend that when this Court sua sponte issued the February 3, 2023 Minute Order, it altered the procedural status of the litigation. According to Plaintiffs, the legal effect of vacating a prior order or judgment by the court is to proceed as though the prior order or judgment had never been made. As a result, Plaintiffs contend that by vacating the March 6, 2023 trial date, the Court restored the procedural status of this case to a point where there was no discovery cutoff because there is now no pending trial date. Therefore, Plaintiffs argue that this alteration in the procedural status now allows all parties to conduct discovery. In support, Plaintiffs cite to Bulmash v. Davis (1979) 24 Cal.3d 691.
In addition, Plaintiffs contend that when a new party is added to a civil action, due process requires the availability of all procedures in a civil action--including the discovery process. Plaintiffs further contend that the process of acquiring business records through deposition subpoenas allows a party to take advantage of a more efficient means of authenticating documents at trial. As a result, Plaintiffs argue that since they are required to add the indispensable parties to the action, Plaintiffs were entitled to serve the deposition subpoenas in order to obtain the records necessary to assist them in proving the facts of their case. Plaintiffs further contend that the required joinder of the indispensable parties has raised certain parts of nuisance law that apply exclusively to the indispensable parties, thus nullifying ESSI’s effort to “freeze the evidence” as of the previously agreed discovery cutoff.
Plaintiffs also contend the instant motion should be denied because it is untimely. Regarding two of the subpoenas, Plaintiffs contend ESSI filed this motion anywhere from 20 minutes to 2 hours before the dates and times specified in those subpoenas for the production of the requested documents. [Declaration of David Dimitruk (“Dimitruk Decl.”), ¶¶ 3.2-3.4.] With respect to the third subpoena, Plaintiffs contend this motion was filed after the time the documents were required to be delivered. According to Plaintiffs, since the Project Design Professionals have not produced the requested documents, ESSI’s failure to timely file this motion placed the Project Design Professionals in jeopardy of disobeying a court order if this Court determines that the motion is untimely, and the documents should have been produced. As a result, Plaintiffs contend the motion was not “reasonably made” pursuant to Code of Civil Procedure section 1987.1, subdivision (a).
Plaintiffs note that the motion is also procedurally deficient because ESSI did not file a separate statement pursuant to CRC 3.1345(a)(5) or the meet and confer statement. As argued by Plaintiffs, absent a separate statement, ESSI had not carried its burden of proof as to this motion.
Plaintiffs’ arguments are not well taken. As a preliminary matter, although notice of a motion to quash must be “reasonable,” there is otherwise no specific amount of notice required. (Code Civ. Proc., § 1987.1; see Lee v. Swansboro Country Property Owners Assn. (2007) 151 Cal.App.4th 575, 583.) A court can grant a motion to quash served even after the date set for production. (Slagle v. Sup. Ct. (Maryon) (1989) 211 Cal.App.3d 1309, 1313.)
Plaintiffs are also incorrect regarding the separate statement. A separate statement is not required when no response has been provided to the request for discovery. (CRC Rule 3.1345(b)(1).)
In addition, Plaintiffs are incorrect regarding the nature of ESSI’s motion. As noted above, the instant motion is not a challenge by ESSI to the substance of the deposition subpoenas; it is a challenge to Plaintiffs’ violation of the discovery cut-off date.
In that regard, Plaintiffs misconstrue the effect of the Court’s vacation of the March 2023 trial date on any prior orders. The July 24, 2022 Stipulation and Order states in relevant part:
1. That the Trial Date currently scheduled for August 22, 2022 be continued to November 28, 2022, and that only expert discovery, motion and trial related cut off dates be continued to correspond with the new trial date. If the Court is not currently available for trial on November 28, 2022, the parties respectfully request that the trial be continued to a date as soon thereafter as possible.
2. That as an express condition of this stipulation, the fact discovery cut-off will remain July 22, 2022.
3. With regard to the five-year statute to bring a case to trial (…), …, the Parties agree to extend the five-year period to December 22, 2022. Should the Court re-schedule the trial to a date after November 28, 2022, then the five-year statute will also be extended by the same number of days after December 22, 2022 as are the number of days after November 28, 2022 that the trial is rescheduled by the Court.
Therefore, by the express terms of the Stipulation, the July 22, 2022 cut-off date for fact discovery is not linked to the setting of a particular trial date, but rather, it is entirely independent of the date set for trial. No subsequent stipulation or order of the Court has changed this fact discovery cut-off date.
At the February 3, 2023 hearing, the Court vacated the March 6, 2023 trial date after it was determined that there were indispensable parties that needed to be added as defendants in the litigation. The Court did not vacate the July 2022 Stipulation and Order, nor did it enter any order changing the fact discovery cut-off date or reopening fact discovery. (ROA 1028.)
Plaintiffs’ reliance on Bulmash is misplaced. Plaintiffs cite to Bulmash to support their argument that when a court vacates an order, it is as though the original order had never been made. However, Bulmash examined the status of a judgment lien pursuant to a judgment that was subsequently vacated. (Bulmash, supra, 24 Cal.3d at p. 694.) In that instance, the Supreme Court noted that a lien cannot exist apart from the judgment on which it is based. Therefore, when the judgment is vacated by court order, the lien would also cease to exist because the effect of vacating the order is elimination of the judgment. (Id. at p. 697.)
That is not the situation in the current litigation. Here, the Court did not vacate the Order underlying the July 2022 fact discovery cut-off date. Moreover, as noted above, the discovery cut-off date is not dependent on the setting of a trial date, and the Order vacating the March 2023 trial date did not eliminate the July 2022 Stipulation and Order establishing the cut-off date.
To the extent Plaintiffs contend additional discovery is needed as it is related to the addition of the indispensable parties to this litigation, they should have moved to reopen discovery. They did not do so. Moreover, Plaintiffs have had almost 6 years to obtain any business records and communications of the Project Design Professionals, and they have not demonstrated that the requested documents are relevant to the addition of the indispensable parties as defendants. It is noted that in the February 3, 2023 Order, the Court did not find it necessary to reopen discovery for the purpose of adding these defendants.
Accordingly, ESSI’s Motion to Quash will be granted. Sanctions in the amount of $3,200 is imposed against Plaintiffs and their counsel. [See, Dalmore Decl., ¶¶ 4, 5.]
RULING:
Defendant Earth Support Systems, Inc.’s Motion to Quash Deposition Subpoenas for Production of Business Records Served on Third-Party Witness is GRANTED. The deposition subpoenas issued to Plamen Petrov, Stoney-Miller Consultants, Inc. dba Geofirm, and William Simpson & Associates, Inc. are ordered QUASHED. IT IS ALSO ORDERED THAT Plaintiffs and their counsel, David B. Dimitruk, pay sanctions to Earth Support Systems, Inc. in the amount of $3,200 within 20 days.
Defendant Earth Support Systems, Inc. is ordered to give notice.