Judge: Lon F. Hurwitz, Case: JCCP5140, Date: 2023-09-27 Tentative Ruling

1. Motion for Terminating and Monetary Sanctions Against Faith A. Devine, and Compelling Compliance with ESI Order

2. Status Conference

Motion for Terminating and Monetary Sanctions

Moving Party: Defendants/Cross-Complainants Alfred Baldwin; Baldwin & Sons, LLC: Randall Bone; Sunranch Capital Partners, LLC; SRC-PH Investments, LLC; Lakeview 1, LLC; Lakeview 2, LLC; Otay Project, LP; Village II of Otay HB Sub, a California General Partnership; Signature SR V2 R20, LLC; Cantamar SR V2 R23, LLC; and Defendants Portola Project, LLC and Southwind Development, LLC (collectively, the “Baldwin/Bone Parties”)

Responding Party: Plaintiff Faith Devine (in her capacity as Successor Receiver)

SERVICE: May 21, 2023, by electronic service.

UPCOMING EVENTS: None

RELIEF SOUGHT: The Baldwin/Bone Parties seek an order imposing terminating sanctions against Plaintiff Faith A. Devine and/or compelling compliance with this Court’s ESI Order and correcting deficiencies in her document productions. The Baldwin/Bone Parties also seek monetary sanctions against Devine and her counsel.

FACTS/OVERVIEW:

This coordinated proceeding involves three cases, which have previously been referred to as “The San Diego Action” (OCSC Case 2019-00048300), “The HCR Action” (OCSC Case 2017- 00929218), and “The Devine Action” (OCSC Case 2017- 00936368).

The HCR Action and the Devine Action are complex cases that involve two separate Plaintiffs (HCR Moorpark Investors, LLC and Faith Devine) who are suing real estate developer brothers, Alfred Baldwin and James Baldwin, and a host of affiliated entities and individuals.

The HCR and Devine Actions involve a long and convoluted sequence of events, spanning decades. Both actions are essentially creditors’ rights claims premised upon a $26.8 million arbitration award obtained by HCR against two companies, North Park Communities LLC and Forstar, LLC. North Park and Forstar are companies affiliated with real estate developer James Baldwin.

Judgment was entered on HCR’s arbitration award by the Los Angeles Superior Court. The judgment was amended several times and ultimately includes James Baldwin and JB Finco alongside North Park and Forstar as judgment debtors. The nominal plaintiff/receiver in the Devine Action, Faith Devine, serves as receiver on behalf of judgment debtors Forstar and JB Finco.

While the two cases do not involve identical causes of action, they both seek to set aside void and/or fraudulent transfers in violation of the Uniform Voidable Transactions Act (Cal. Civ. Code, § 3439 et. seq.). They also assert claims for breach of fiduciary duty. The gist of the allegations is that a complex series of fraudulent transfers was carried out by the defendants in those two actions in order to make collection on the $26.8 million judgment impossible.

The San Diego Action was filed by plaintiff Otay Lakes, L.P. against defendant Moller Otay Lakes Investment, LLC in the San Diego Superior Court. The First Amended Complaint (ROA 244) asserts causes of action for Breach of Contract and Breach of the Implied Covenant of Good Faith and Fair Dealing.

The agreement at issue is an April 22, 2014 Option Agreement through which Moller Otay allegedly granted Otay Lakes the option to acquire certain specified property. Otay Lakes claims that it attempted to exercise the option on October 13, 2015, but that Moller Otay created obstacles to the transfer of the Property and close of escrow. Per Otay Lakes, Moller Otay’s actions proximately caused the failure of the Property to be transferred to Otay Lakes, ultimately depriving Otay Lakes of the benefit of the Option Agreement.

Cross-Complaints The Baldwin/Bone Parties and OVSD each filed cross-complaints in both the HCR Action and the Devine Action. Each of these cross-complaints currently alleges a single cause of action to Set Aside Void Judgment on the basis that HCR’s judgment is void because HCR was cancelled in Delaware in 2008 and the cancellation was not corrected until 2017.

Procedural Background

The parties have overwhelmed both this Court and the discovery referee with never-ending discovery disputes and motion practice.

Most recently, Plaintiff Devine, along with Plaintiff HCR Moorpark Investors, LLC, filed a motion for sanctions against the Baldwin/Bone Parties claiming the Baldwin/Bone Parties had: (a) violated several Court orders to produce documents, (b) commingled documents produced, (c) forced Plaintiffs to file two motions to enforce the Court’s production orders in addition to three other motions to obtain the production orders in the first instance, (d) sought to reserve a non-existent “right” to produce documents after Court-ordered deadlines, (e) commingled documents produced in a unified production without stating which documents were being produced by which persons, and (f) otherwise sought to suppress, delay, and/or hide evidence they were ordered to produce.

Plaintiffs claimed the Baldwin/Bone Parties prevented Plaintiffs from inquiring into almost 38,000 pages of evidence at the depositions of 11 witnesses. The documents were produced more than a year after the Court-ordered production deadline, and after Plaintiffs had taken the depositions in reliance on the Baldwin/Bone Parties’ representation that they had completed the production pursuant to the August 29, 2019 Order. As a result, Plaintiffs sought to strike the Answer of the Baldwin/Bone Parties, re-open the depositions, obtain a written verification from the Baldwin/Bone Parties attesting to the completion of production, and monetary sanctions.

At the hearing on February 24, 2023, the Court denied Plaintiffs’ request to strike the Baldwin/Bone Parties’ Answer and re-open the depositions. Plaintiffs’ request for written verification regarding the completion of production was granted, and the Court took the request for monetary sanctions under submission. (ROA 1861).

On March 27, 2023, regarding the submitted matter, the Court found and ruled as follows:

1. Although the Baldwin/Bone Parties’ production exceeded the deadlines imposed in the Court Orders issued on August 29, 2019, July 28, 2022, and September 2, 2022, the ultimate production of over 390,000 pages of documents between April 22, 2020, and January 16, 2023, attested that the amount of material to review and provide was extensive. In addition, the Court noted that the COVID-19 shutdown and related Emergency Orders commenced on March 18, 2020, and May 1, 2020, respectively.

2. The Baldwin/Bone Parties never sought the aid of the Court to extend the production deadlines in the three Court Orders. Although Plaintiffs argued prejudice in relying on representations by defense counsel that all responsive documents had been produced prior to the commencement of depositions, no specific reference was made as to which documents produced after the subject depositions would have been material to the taking of those depositions.

3. On February 24, 2023, the Court had ordered all Parties to file a Verification attesting to the completion of Court-ordered production within 20 days of said Order – to wit: March 15, 2023. The Court noted it was in receipt of 16 separate Verifications—14 from the Baldwin/Bone Parties, and two from Plaintiffs Devine and HCR Moorpark Investors, LLC.

4. The Court had previously indicated in its tentative ruling regarding monetary sanctions that it believed the total amount requested by Plaintiffs, $43,260.00, was reasonable. The Court’s analysis was based upon Plaintiffs’ claim that a total of 72.1 hours, at the rate of $600 per hour, was necessary for the motion. However, upon further consideration and review, the Court re-evaluated Plaintiffs’ assertion.

5. Given the failure of Plaintiffs to point to any document not produced prior to the depositions, thereby resulting in the denial of the request to re-open the depositions; the failure to succeed on the requests for terminating sanctions as to Defendants Alfred Baldwin and Randall Bone; and the filing of nearly 1,000 pages by Plaintiffs in bringing the motion, the Court stated it could not find that the expenditure of 72.1 hours was necessary for the ultimate result.

As a result, the Court found that a total of 40 hours was reasonably necessary for the preparation and argument of Plaintiffs’ motion, for a total sanction of $24,000 against the Baldwin/Bone Parties. (ROA 1919).

CONTENTIONS AND ANALYSIS:

On May 22, 2023, the Baldwin/Bone Parties (hereinafter, “Defendants”) filed the current Motion for Terminating and Monetary Sanctions against Plaintiff Faith Devine (“Devine”), and Compelling Compliance with ESI Order. (ROA 1935). Devine opposes the motion, and Defendants reply.

Statement of the Law

Failure to comply with an order to provide discovery is a “misuse of the discovery process”, for which a broad range of sanctions is provided. (CCP § 2023.010(g).) Available sanctions include contempt, issue, and evidentiary sanctions, as well as terminating sanctions. (Weil & Brown, Calif. Practice Guide, Civ. Pro. Before Trial, § 8:864 [TRG 2009].) The burden of proof is on the party seeking the sanctions. (Id. at § 8:874.)

A trial court has broad discretion in selecting discovery sanctions, but should consider both the conduct being sanctioned and its effect on the party seeking discovery and, in choosing a sanction, attempt to tailor the sanction to the harm caused by the withheld discovery. (Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967, 992.) It cannot impose sanctions for misuse of the discovery process as a punishment. (Id.) 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. (Id.; see also Lopez v. Watchtower Bible and Tract Society of New York, Inc. (2016) 246 Cal.App.4th 566, 606 [trial court erred in ordering terminating sanctions without evidence that lesser sanctions would have failed to obtain compliance and effectively remedied the discovery violation].) Furthermore, the sanction chosen should not provide a windfall to the other party, by putting the prevailing party in a better position than if he or she had obtained the discovery sought and it had been favorable.” (Rutledge v. Hewlett-Packard Co. (2015) 238 Cal.App.4th 1164, 1193.)

Evidentiary Objections: (ROA 1955, 1956)

In reply, Defendants submit objections to the Declaration of Faith A. Devine. (ROA 1955). The recommended rulings are as follows:

1. Para. 2 – OVERRULED

2. Para. 4 – OVERRULED

Defendants also submit objections to the Declaration of Michael R. Adele. (ROA 1956). The recommended rulings are as follows:

1. Para. 2 – OVERRULED

2. Para. 3 – SUSTAINED, lack of foundation

3. Para. 5 – OVERRULED

4. Para. 6 – OVERRULED

5. Para. 8 – SUSTAINED, improper opinion

6. Para. 9 – SUSTAINED, lack of personal knowledge

7. Para. 10 – OVERRULED

8. Para. 11- SUSTAINED, lack of personal knowledge

9. Para. 12- SUSTAINED, lack of personal knowledge

10. Para. 13 – SUSTAINED, lack of foundation

11. Para. 14 – SUSTAINED, argumentative

12. Para. 15 – SUSTAINED, improper opinion

13. Para. 16 – SUSTAINED, improper opinion

14. Para. 17 – SUSTAINED, argumentative

Arguments of the Parties

Defendants contend that Devine has “played games” with her document production, violated Court orders, and deliberately produced the documents in a confusing and non-compliant format. In addition, Defendants contend that Devine’s recently-produced Verification of completeness of production was “at best signed with a reckless disregard for the truth or was knowingly false.” [Motion, 4:5-6.]

Defendants state that on or around February 14, 2020, they propounded their second set of Requests for Production, Requests for Admission, and Form Interrogatories on Devine. [Declaration of Randall A. Smith (“Smith Decl.”) (ROA 1931), ¶ 4.] According to Defendants, these discovery requests sought to determine the evidentiary support for Devine’s Uniform Voidable Transfer Act claim. The RFPs sought the production of records provided to Devine or her predecessor receiver by former defendant, First Bank, in connection with Devine’s investigation of the claims asserted in this litigation. [Ibid.] Defendants note that Devine’s counsel repeatedly sought, and was granted, extensions of time to respond. Devine finally served her responses to all of the written discovery on or around April 14, 2020. [Id. at ¶ 5.] Defendants contend, however, that her responses were inadequate. Although Devine subsequently served verified supplemental responses after extensive meet and confer efforts by Defendants, her responses remained inadequate. [Id.]

Defendants moved to compel Devine to provide further responses. On September 7, 2021, the discovery referee issued a report recommending that the motions be granted in part. The report noted that the fulfillment of Devine’s discovery obligations “requires a disclosure of the facts upon which the failure to admit a request for admission is based and not simply a regurgitation of the conclusory allegations contained in the operative Complaint”; the report then required Devine to produce the documents without objection (save for privilege). The Court adopted the discovery referee’s report and recommendations by Order filed September 17, 2021 (ROA 405). [Smith Decl., ¶ 6.]

Defendants contend that Devine subsequently violated the September 17, 2021 Order in several respects. According to Defendants, although Devine served supplemental responses to the Form Interrogatories and RFAs on October 25, 2021, they were facially deficient and continued to assert objections that had been overruled. Moreover, Defendants contend the supplemental responses directly contradicted sworn responses previously provided by Devine, and that Devine included an omnibus response that claimed she (now) lacked the facts to admit or deny RFAs that she had previously denied. [Smith Decl., ¶ 7.] Similarly, Devine purportedly provide non-responsive responses to the Form Interrogatories that contradicted her earlier sworn responses. [Ibid.]

As a result, on October 27, 2021, the Defendants moved for sanctions, including terminating sanctions, due to Devine’s purported non-compliance with the September 2021 Order. (ROA 535). Defendants contend that shortly before the hearing on the motion, Devine served another round of verified supplemental responses where she yet again changed her responses. [Smith Decl., ¶¶ 8-9.] At the hearing in January 2022, the Court denied Defendants’ request for monetary sanctions, primarily because Defendants failed to submit a declaration setting forth facts supporting the amount of sanctions requested. (ROA 1021). The Court also denied Defendants’ request for terminating, evidentiary, and issue sanctions “because sanctions should be incremental and the court, in the exercise of its discretion, considers that terminating/evidentiary or issue sanctions are not appropriate at this time.” (Ibid.) In addition, the Court declined to deem the RFAs as conclusively admitted. Notably, however, the Court found that Devine’s initial and supplemental responses “failed to comply with the court’s September 17, 2021 Order requiring responses ‘without objections.’” The Court also found that Devine had “engaged in the misuse of the discovery process” and exhibited a “blatant disregard of the Order.” (Ibid.)

Defendants note that the September 17, 2021 Order also required that Devine supplement her document productions without objection (except for privilege), including the production of documents Devine had obtained by subpoena from First Bank. [See, Smith Decl., ¶ 6.] Accordingly, on February 24, 2023, in ruling on Devine’s and HCR Moorpark Investor’s motion for sanctions against Defendants (see, Procedural Background, supra), the Court ordered the parties “to verify that they have produced all documents responsive to Court’s order for production known to the parties to date within 20 days of this Order.” (ROA 1861).

Defendants state that on March 24, 2023, Devine served her Court-ordered Verification stating that her document productions were complete. However, according to Defendants, on April 5, 2023, Devine’s counsel contradicted the Verification by producing almost 3,500 pages of additional documents and asserting that they were not sure if the documents had been previously produced. Defendants contend this April 5, 2023 production contained documents that were directly responsive to their RFPs, including documents obtained by Devine via subpoena from First Bank prior to initiating this litigation—documents which she specifically cited in her Complaints as a basis for her “meritorious” claims. Defendants argue that the documents were required to be produced long ago. [Declaration of Shoshana B. Kaiser (“Kaiser Decl.”) (ROA 1929), ¶ 4.]

Defendants also contend that they only recently discovered that many of the documents produced by Devine are not searchable. In addition, Defendants contend that of the approximately 4,800 documents produced by Devine in discovery, over 40 percent—approximately 2,000 documents—are litigation documents from the instant action, including CourtCall appearance notices, pleadings, meet and confer correspondence, discovery documents such as deposition notices, and correspondence with the discovery referee. As a result, Defendants contend Devine has inflated and confused her document productions by producing many non-responsive documents in a non-searchable format, thus providing an unreliable Court-ordered verification.

Defendants contend that since Devine claimed ignorance as to whether these documents had been previously produced, then Defendants were required to expend significant time reviewing all of Devine’s productions. Defendants state they were ultimately able to determine that some of the recently-produced documents had indeed been previously produced. However, they had not been produced in searchable format. Defendants contend that a further examination of Devine’s productions revealed that a substantial portion of her documents are not accompanied by searchable text files, and approximately 80 percent do not have branded Bates numbers. As argued by Defendants, the fact that some of the documents were searchable obscured the fact that others were not, and as a result, there was nothing to alert counsel that the production was incomplete. [Kaiser Decl., ¶¶ 5-6.]

Defendants contend all of this violates the operative ESI Protocol Order entered on January 13, 2020 (“ESI Order”), which required that ESI be produced via “branded, searchable PDFs and Load Files.” Defendants note this is not the first time Devine has engaged in willful discovery misconduct and disregarded this Court’s Orders. As a result, Defendants argue that due to Devine’s continuing pattern of bad faith discovery tactics, the imposition of terminating sanctions is warranted. Therefore, Defendants ask this Court:

1. To enter an order striking Devine’s pleadings “for her ongoing and willful violations of this Court’s Orders and discovery gamesmanship;”

2. In the alternative, to enter an order requiring Devine to comply with the ESI Order and immediately correct the deficiencies noted above, including requiring her to provide documents with proper, searchable text files and Bates stamps; and

3. In either event, to impose an appropriate monetary sanction on Devine and her counsel to compensate Defendants for the expense incurred in analyzing her late production, reviewing her past productions for deficiencies, and preparing and filing the current motion. Defendants seek sanctions of $47,177.00.

In opposition, Devine contends the motion is substantively and procedurally deficient, and is nothing more than an attempt by Defendants to either avoid a trial on the merits of her claims or avoid being the only parties sanctioned for discovery abuses.

Regarding Defendants’ substantive arguments, Devine contends that the First Bank documents were already produced, and she was not required to “re-produce” them by Court order or otherwise. Instead, Devine contends these documents were only re-produced because counsel was unable to confirm their earlier production before a then-pending deposition. [Declaration of Michael R. Adele (“Adele Decl.”) (ROA 1947), ¶ 3.] According to Devine, this is “not even arguably a technical violation of any order.” [Opp. Brief, 1:13-14.] Moreover, Devine contends that Defendants have acknowledged the First Bank documents were previously produced by Devine, but Defendants have not said when that production occurred. In that regard, Devine states that she produced the First Bank documents in June 2020. [Adele Decl., at ¶ 5.]

Devine contends that she properly submitted her Court-ordered Verification on March 22, 2023. As argued by Devine, when she signed her Verification, neither she nor her counsel were aware of any deficiencies in her document productions. [Adele Decl., ¶ 2; Declaration of Faith A. Devine (“Devine Decl.”) (ROA 1946), ¶ 2.] Moreover, Devine contends production of the First Bank documents had nothing to do with any Court-ordered production or her Verification. Devine states that by April 5, 2023, there were only approximately 18 documents, including the First Bank production, that her counsel was unable to confirm had been previously produced. As a result, to ensure that Defendants had all the documents they were entitled to before the then-pending deposition, Devine contends she produced these documents. [Adele Decl., ¶ 4.]

It is noted, however, that Devine’s counsel attests that in the April 2023 production, 15 of the 18 documents produced were “new pdfs, totaling 699 pages….” [Adele Decl., ¶ 5.]

Regarding her purported non-compliance with the ESI Order, Devine contends she and her counsel were previously unaware that documents were not produced with “searchable extracted text.” [Adele Decl., ¶ 13; Devine Decl., ¶ 3.] Devine states that her counsel hired ESI providers to assure her document productions were in compliance with the ESI Order, and the ESI provider confirmed receipt of the ESI Order and counsel’s instructions that it be followed. [Adele Decl., ¶¶ 6, 13.] As argued by Devine, since Defendants did not discover or did not report any purported non-compliance before now, then she and her counsel cannot be held responsible for not knowing of any such non-compliance before the filing of the instant motion. [See, Adele Decl., ¶ 14.] Moreover, Devine notes that Defendants concede that they also had issues with their own document productions and compliance with the ESI Order. As a result, Devine contends not only are sanctions not warranted, but if she is required to rectify any issues with her document productions, then Defendants should be required to do the same.

Devine contends that Defendants’ motion is deficient because Defendants have failed to identify: (1) any Court-ordered documents that were not timely produced; (2) the language in any purported Court order requiring her to produce such documents; and (3) the RFP number(s) corresponding to the documents purportedly at issue. In addition, Devine notes that although Defendants’ seeking terminating sanctions, they have not demonstrated any undue prejudice as a result of any purported discovery issues.

Regarding her production of litigation documents, Devine argues such documents can be material. Moreover, Devine contends this category of documents was not excluded from Defendants’ RFPs—document requests that were broad enough to render certain litigation documents as responsive. [Adele Decl., ¶ 6.] According to Devine, Defendants’ RFPs used broad terms such as “relating,” “evidencing,” and “supporting,” and since litigation documents often refer to underlying facts that are the subject of documents requests, then she thought it was better to produce them in response instead of withholding them as non-responsive. [Adele Decl., ¶ 15.]

Regarding the purported lack of Bates stamps, Devine contends that all of the documents she produced had a DEV Bates label identified. In addition, she contends that approximately 98 percent of the documents were produced with a DEV Bates label and a unique page identified on each page. [Adele Decl., ¶¶ 11-12.]

Devine denies any bad faith in her discovery actions, and contends that Defendants’ request for $47,177 in monetary sanctions is “wildly excessive.”

In reply, Defendants challenge Devine’s assertion that she complied with the ESI Order. According to Defendants, more than 16,000 pages of Devine’s documents were produced in a non-searchable format. Defendants argue that this is a direct violation of the ESI Order. Defendants also argue that this makes it more likely that responsive documents have not appeared in other searches of Devine’s document production, and therefore, any searches have always been incomplete.

Defendant argues that Devine’s attempts to explain her non-compliance with the ESI Order are without merit. Defendant also contends Devine’s attempt to justify the production of 2,000 litigation documents is without merit and another example of her intentional gamesmanship in the discovery process. Regarding Devine’s request for “reciprocity” and attack on Defendants’ document productions, Defendants argue this is yet another distraction from Devine’s own continuing discovery abuses.

Merits

As a preliminary matter, Defendants’ motion seems to be little more than retaliation for Devine’s similar motion heard by this Court in February 2023 and ruled on in March 2023. (See, ROA 1861 and 1919). It is also noted that this is not the first time Defendants have sought terminating sanctions against Devine. The Court should caution the parties against their continuing and unnecessarily aggressive behavior in the discovery process.

More substantively, it is again noted that despite the avalanche of discovery disputes and related motion practice in this case, the discovery referee has never recommended terminating, issue, or evidence sanctions, nor have such sanctions been ordered by this Court. It also appears this Court has ordered monetary sanctions on only one occasion—in its March 27, 2023 Order against these Defendants.

Given the lack of prior sanctions, with the one noted exception, it should be found that Defendants’ request for terminating sanctions is inappropriate. The theory of discovery sanctions, including terminating sanctions, was explained by our DCA in Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967, 992:

“’The discovery statutes evince an incremental approach to discovery sanctions, starting with monetary sanctions and ending with the ultimate sanction of termination. “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.’ (Citation.) If a lesser sanction fails to curb misuse, a greater sanction is warranted: continuing misuses of the discovery process warrant incrementally harsher sanctions until the sanction is reached that will curb the abuse. ‘A decision to order terminating sanctions should not be made lightly. But where a violation is willful, preceded by a history of abuse, and the evidence shows that less severe sanctions would not produce compliance with the discovery rules, the trial court is justified in imposing the ultimate sanction.’ (Citation.)”

While the Court has discretion in deciding whether to award discovery sanctions, “this discretion must be exercised in a manner consistent with the basic purposes of such sanctions, e.g., to compel disclosure of discoverable information. . . . [S]anctions may not be imposed solely to punish the offending party. (Citation.) Furthermore, the sanction chosen should not provide a windfall to the other party, by putting the prevailing party in a better position than if he or she had obtained the discovery sought and it had been favorable.” (Rutledge v. Hewlett-Packard Co. (2015) 238 Cal.App.4th 1164, 1193). The trial court’s choice of sanctions is subject to appellate review only for abuse of discretion. (Sauer v. Sup.Ct. (Oak Industries, Inc.) (1987) 195 Cal.App.3d 213, 228.)

Here, the “ultimate sanction” of termination is not warranted. Regarding the First Bank documents, Defendants’ argument is obtuse and obscures the facts regarding the production of those documents. In their motion, Defendants claim that Devine’s April 2023 production “included 3,479 pages of documents from First Bank, more than three years after they were first requested, and eighteen months after the Court ordered her to produce such records.” [Motion, 11:5-7.] Defendants go on to assert that these documents are “manifestly relevant.” Notably, Defendants do not support these statements by citation to either of their attorney declarations. However, a closer look at the declaration of Ms. Kaiser reveals that, by Defendants’ own admission, the 3,749 pages had been previously produced by Devine. [Kaiser Decl. filed 5/22/23 @ ¶s 4 & 5] Therefore, contrary to Defendants’ assertions, the production of the First Bank documents was not untimely.

Defendants’ purportedly “recent” discovery that most of Devine’s document production lacks Bates numbers also seems disingenuous. As a preliminary matter, it appears that Devine’s purported violation of the September 17, 2021, was adjudicated by this Court—at least in part—at the January 28, 2022 hearing. (ROA 1021). Presumably, Defendants realized before now that at least some of Devine’s documents did not contain Bates numbers. Moreover, as admitted by Defendants in reply, their assertions regarding missing Bates numbers seems to boil down to discovery vendor error. Counsel attests that after conferring with their discovery vendor, it was determined that the vendor located certain Bates-stamped versions of documents that the vendor failed to load into the database. [Reply Declaration of Shoshana B. Kaiser (“Kaiser Reply Decl.”) (ROA 1949), ¶ 7.]

Similarly, it seems unlikely that in a case as complex as this one, that Defendants did not previously discover that at least some of Devine’s documents were not searchable or otherwise violated the ESI Order. Defendants note that approximately 55 depositions had been taken before Devine’s April 2023 production. Again, it is presumed that Defendants reviewed and used some of the documents produced by Devine in their preparation for those depositions. To the extent Devine’s documents may not have complied with the ESI Order, Defendants should have timely objected to the format of the production at the time the documents were produced. Their failure to do so render their objections on this ground as waived. (See, California Civil Discovery Practice (4th ed. Cal. CEB, § 4.50.)

Despite Defendants’ contentions regarding the purported deficiencies in Devine’s document production, Defendants have not argued or demonstrated any prejudice, nor have they identified any specific documents that should have been previously produced, but were not. Instead, Defendants simply reiterate old arguments that Devine has repeatedly engaged in discovery abuses, only to concede that the documents at issue had already been produced by Devine or that the “deficiencies” were due to vendor error.

Nonetheless, Devine’s production of 15 “new” documents after she verified the completion of her document production is troubling. As discussed above, the discovery in this litigation has been complex and disputed at every turn. Devine has not adequately explained how or why she submitted her Verification in March 2023, yet apparently found “new” documents a few weeks later. Even though these new documents did not consist of thousands of pages, they should have been produced under this Court’s September 17, 2021 Order.

Devine’s production of litigation documents is also questionable. As asserted by Defendants’ counsel in reply, Devine purportedly produced as “responsive” documents certain correspondence regarding the ordering of hearing transcripts, CourtCall appearances, scheduling of a preliminary conference with the discovery referee, logistics for submitting a joint case management statement, and the scheduling of meet and confer phone calls. [Kaiser Reply Decl., ¶ 6.] Devine’s counsel could not reasonably have believed that these documents were responsive to any of Defendants’ RFPs or that they were the type of documents sought by Defendants. In a case involving thousands of documents, this type of discovery abuse seems geared toward thwarting Defendants’ efforts to obtain documents pertinent to their case.

Devine’s fingerpointing regarding her lack of compliance with the ESI Order is also indicative of the unnecessarily antagonistic nature of the relationship between the parties. To the extent that Devine believed Defendants’ document production did not comply with the ESI Order, this issue could have been raised in a separate motion.

Although the requested terminating sanctions are excessive, monetary sanctions are in order for Devine’s untimely production of 15 “new” documents after verifying that production was complete. Defendants’ counsel, Randall Smith, has set forth by declaration the following fees and costs incurred in bringing this motion:

5.3 hrs @ $855/hr = $4,531.50

9.2 hrs @ $830/hr = $7,636.00

9.4 hrs @ $750/hr = $7,050.00

23.2 hrs @ $650/hr = $15,080.00

28 hrs @ $460/hr = $12,880.00

TOTAL: 75.1 hours and $47,177.50 in fees. [Smith Decl., ¶¶ 16-21.]

The amount of time expended and fees incurred seems excessive in light of the minimal result. Most of Defendants’ arguments simply rehashed past disputes. Other arguments could have been, and should have been, raised before now. Many of the hours expended by Ms. Kaiser, in particular, were related to analyzing Devine’s various document productions—analysis that should have been done before now.

A trial court has broad discretion in selecting a discovery sanction, but should consider both the conduct being sanctioned and its effect on the party seeking discovery. In choosing a sanction, a court should attempt to tailor the sanction to the harm caused by the withheld discovery. (Doppes, supra, 174 Cal.App.4th at p. 992.) The court cannot impose sanctions for misuse of the discovery process. (Ibid.) 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. (Ibid.)

Defendants fail to point to any specific document that was not produced in response to earlier discovery requests. The Court finds that a total of no more than 32.5 hours was reasonably necessary for the preparation and argument of the instant motion, for a total monetary sanction of  $23,588.75.

RULING:

The Motion of Defendants and Cross-Complainants Alfred Baldwin; Baldwin & Sons, LLC: Randall Bone; Sunranch Capital Partners, LLC; SRC-PH Investments, LLC; Lakeview 1, LLC; Lakeview 2, LLC; Otay Project, LP; Village II of Otay HB Sub, a California General Partnership; Signature SR V2 R20, LLC; Cantamar SR V2 R23, LLC; and Defendants Portola Project, LLC and Southwind Development, LLC (collectively, the “Baldwin/Bone Parties”) for terminating and monetary sanctions against Plaintiffs HCR Moorpark Investors, LLC and Faith A. Devine is GRANTED IN PART AND DENIED IN PART.

The request of the Baldwin/Bone Parties for the terminating sanction of striking Plaintiffs’ pleadings is DENIED.

The request of the Baldwin/Bone parties for an order requiring Plaintiffs to correct the deficiencies in the production violative of the ESI Order is DENIED as untimely and waived.

The request of the Baldwin/Bone parties for monetary sanctions is GRANTED. Sanctions are awarded to the moving parties in the total sum of $23,588.75.

IT IS ORDERED THAT Plaintiffs and their counsel shall pay, jointly and severally, to Moving Party Defendants the sum of Twenty-three thousand, five hundred eighty-eight dollars and seventy-five cents ($23,588.75) no later than August 15, 2023.

Clerk to give Notice.