Judge: Lon F. Hurwitz, Case: 17-00910966, Date: 2023-08-18 Tentative Ruling

1. Motion to Quash Discovery Subpoena (Motion for Sanctions Portion Only)

2. Status Conference

Motion for Sanctions (related to Motion to Quash Deposition Subpoenas)

Moving Party: Defendant Earth Support Systems, Inc.

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 that Plaintiffs and their counsel, jointly and severally, pay sanctions for the reasonable costs and attorneys’ fees incurred by Defendant in successfully bringing the Motion to Quash Deposition Subpoenas for Production of Business Records.

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. 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 Vue 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 Vue Project. Clauss Construction was involved demolition work in connection with the Project.

On April 14, 2023, Defendant Earth Support Systems, Inc. (Doe 6) (“ESSI”) filed a Motion to Quash Deposition Subpoenas for Production of Business Records Served on Third-Party Witness, and Request for Monetary Sanctions. (ROA 1045.) At the hearing on June 16, 2023, the Court granted the substantive portion of the motion, and ordered the subject deposition subpoenas quashed. (ROA 1075.) The Court then continued the sanctions portion of the motion to July 11, 2023. Subsequently, the Court continued the sanctions portion of the motion to August 18, 2023.

CONTENTIONS AND ANALYSIS:

Statement of the Law

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

ESSI contends sanctions should be awarded against Plaintiffs and their counsel because they did not have any justification for serving the subject subpoenas. As argued by ESSI, the service of the subpoenas was in direct contravention of the parties’ July 11, 2022 Stipulation wherein they expressly conditioned a former trial continuance and extension of the five-year statute on fact discovery being cut off as of July 22, 2022. In addition, ESSI contends service of the subpoenas was in violation of this Court’s February 3, 2023 Minute Order wherein the Court vacated the trial date, but did not re-open discovery. As a result, ESSI contends that as the prevailing party on the underlying motion to quash, it should be awarded monetary sanctions in the amount of $3,200.00. [Declaration of Jean A. Dalmore (“Dalmore Decl.”), ¶¶ 4, 5.]

Plaintiffs’ opposition to the underlying motion did not directly address ESSI’s request for sanctions.

As noted above, under Code of Civil Procedure section 1987.2, subdivision (a), a court may, in its discretion, award reasonable attorney fees and expenses incurred in making or opposing a motion to quash “if the court finds the motion was made or opposed in bad faith or without substantial justification.” “Substantial justification” means “ ‘that a justification is clearly reasonable because it is well grounded in both law and fact.’ [Citation.]” (Vasquez v. California School of Culinary Arts, Inc. (2014) 230 Cal.App.4th 35, 40.)

Here, regarding the motion to quash, the Court stated in relevant part:

…Plaintiffs misconstrue the effect of the Court’s vacation of the March 2023 trial Date on any prior orders. … [¶] [T]he 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. (ROA 1075.)

By these statements, the Court found that Plaintiffs did not have substantial justification to oppose the motion to quash.

ESSI’s counsel attests that in connection with the motion to quash, she spent at least 7.3 hours conducting a file review of the matter, conducted legal research, and drafted the motion, supporting declaration, and proposed Order. [Dalmore Decl., ¶ 4.a.] As of the date of counsel’s declaration, she further attested that she anticipated spending 3.5 hours reviewing Plaintiffs’ opposition documents regarding the motion to quash and drafting ESSI’s reply brief. In addition, counsel anticipated spending 2.0 hours preparing for and appearing at the hearing. [Id., ¶ 4.b.] Counsel attests that her hourly billable rate for this case is $250.00. [Id. at ¶ 5.] As a result, ESSI is seeking attorneys’ fees totaling $3,200.00. [Id. at ¶ 4.]

The expenditure of time by counsel appears to be reasonable; the hourly billable rate is also reasonable.

RULING:

Defendant Earth Support Systems, Inc.’s Motion for Sanctions (related to the Motion to Quash Deposition Subpoenas) is GRANTED.

IT IS ORDERED THAT Plaintiffs South Coast Shipyard, Inc. and Peter Stewart, and their counsel, Law Offices of David B. Dimitruk, pay sanctions in the amount of $3,200.00 to Defendant Earth Support Systems, Inc., within 20 days of this Court’s ruling.

Defendant Earth Support Systems, Inc. is to give notice of this ruling.

Status Conference

The Status Conference is continued to October 25, 2023 at 1:30 p.m. in Dept. CX 103.

Clerk to give Notice