Judge Lynne M. Hobbs, Case Number: 19STCV31631, Date: 2024-09-17 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 19STCV31631, Date: 2024-09-17 Tentative Ruling

Case Number: 19STCV31631 Hearing Date: September 17, 2024 Dept: 61

CLAUDETTE MARIE LESLIE, et al. vs NEW CENTURY MORTGAGE CORPORATION, et al.

TENTATIVE

Plaintiffs Claudette Marie Leslie and Rodwell N. Leslie’s Motion for Spoliation Sanctions is GRANTED, in part. Plaintiffs are awarded $6,075.00 in monetary sanctions. Judicial Assistant is to calendar in 120 days an OSC re evidentiary sanctions to preclude Defendant from introducing any audio recordings or portions of the activity log at trial.

Plaintiffs to give notice.

DISCUSSION

Misuse of the discovery process may result in the imposition of a variety of sanctions. These include payment of costs, sanctions barring the introduction of certain evidence, sanctions deeming that certain issues are determined against the offending party, and sanctions terminating an action in favor of the aggrieved party. Misuse of the discovery process includes failing to respond or submit to authorized discovery, providing evasive discovery responses, disobeying a court order to provide discovery, unsuccessfully making or opposing discovery motions without substantial justification, and failing to meet and confer in good faith to resolve a discovery dispute when required by statute to do so. The court may impose sanctions to the extent authorized by the chapter governing any particular discovery method or any other provision of this title.

The trial court has broad discretion to impose sanctions for violations of court orders, including those intended to compel compliance with a party's disclosure and discovery obligations, subject to reversal only for arbitrary or capricious action. (In re Marriage of Eustice (2015) 242 Cal.App.4th 1291, 1308–1309, internal quotation marks, citations, and alterations omitted.) The court may impose terminating sanctions, include an order striking pleadings, and order dismissing an action, or an order rendering judgment by default against a party, for conduct that is a misuse of the discovery process. (Code Civ. Proc., § 2023.030.) This conduct includes “[f]ailing to respond or to submit to an authorized method of discovery,” and “[d]isobeying a court order to provide discovery.” (Code Civ. Proc., § 2023.010.)

Spoliation of evidence means the destruction or significant alteration of evidence or the failure to preserve evidence for another's use in pending or future litigation. Such conduct is condemned because it can destroy fairness and justice, for it increases the risk of an erroneous decision on the merits of the underlying cause of action. Destroying evidence can also increase the costs of litigation as parties attempt to reconstruct the destroyed evidence or to develop other evidence, which may be less accessible, less persuasive, or both. While there is no tort cause of action for the intentional destruction of evidence after litigation has commenced, it is a misuse of the discovery process that is subject to a broad range of punishment, including monetary, issue, evidentiary, and terminating sanctions. A terminating sanction is appropriate in the first instance without a violation of prior court orders in egregious cases of intentional spoliation of evidence.

Discovery sanctions are intended to remedy discovery abuse, not to punish the offending party. Accordingly, sanctions should be tailored to serve that remedial purpose, should not put the moving party in a better position than he would otherwise have been had he obtained the requested discovery, and should be proportionate to the offending party's misconduct. (Williams v. Russ (2008) 167 Cal.App.4th 1215, 1223, internal quotation marks and citations omitted.) One seeking a spoliation sanction must show “that the records were destroyed with a culpable state of mind,” and that “the destroyed records were relevant to the party's claim or defense.” (Reeves v. MV Transportation, Inc. (2010) 186 Cal.App.4th 666, 681–682.)

Plaintiffs Claudette Marie Leslie and Rodwell N. Leslie (Plaintiffs) move for terminating, issue, evidentiary, and monetary sanctions against Defendant Citimortgage, Inc. (Defendant) based on Defendant’s failure to preserve audio recordings relevant to this case, and alteration of the activity log for the subject loan.

Plaintiffs present the following facts. On November 9, 2020, Plaintiffs served a request for production seeking audio recordings of all telephone calls between Defendant and Plaintiffs regarding the loan from 2015 onward. (Reed Decl. ¶ 3, Exh. D.) Defendant responded on December 28, 2020, stating that it would produce all responsive records but required the relevant phone numbers to search for the relevant call recordings. (Reed Decl. Exh. E.) The parties conferred regarding the supposed necessity of phone numbers to obtain audio recordings related to the loan, and after a May 2021 informal discovery conference, Defendant agreed to produce additional documents. (Reed Decl. ¶¶ 5–7.) In a supplemental response served on October 20, 2021, Defendant stated: “Citi has not located any documents responsive to this request.” (Reed Decl. Exh. H.) In a following meet-and-confer email, Defendant stated that the word “documents” in its response encompassed the term “audio files,” and further stated that Citimortgage “does not have any audio files requested under this request.” (Reed Decl. Exh. I.)1

Plaintiff Claudette Marie Leslie presents her own declaration stating that during all conversations with Defendant’s representatives during the relevant period, she was advised that the conversations were being recorded. (Leslie Decl. ¶ 2.) Plaintiff also asked Defendant to produce all internal telephone activity logs pertaining to the subject loan for the relevant period. Defendant produced the logs in question on October 6, 2021. (Reed Decl. Exh. H.) But Plaintiff notes that on the entries for the dates November 2 and 5, 2018, the logs are listed as EDITED. (Reed Decl. ¶ 15; Exh. M.) Plaintiffs claim the dates are significant, as these are the dates listed on loan modification letters Plaintiffs claim to have received shortly before their foreclosure, letters that Defendant contends are forgeries. (Reed Decl. ¶¶ 14–15.)

Defendant in opposition contends that on March 4, 2024, it produced a supplemental response to Plaintiffs and produced responsive call recordings. (Winslow Decl. ¶ 3, Exh. 1.) The response states that Defendant initially searched for records in the “origination department,” but in responding to Plaintiffs’ latest special interrogatories Served January 30, 2024, it learned that responsive recordings existed in the “legacy servicing group.” (Winslow Decl. Exh. 1.)

As to the “Edited” notation on the activity log, Defendant provided this response to Special Interrogatory No. 18, also served by Plaintiff on January 30, 2024:

Both of the highlighted entries on the copy of CITI 001157 attached to plaintiff’s requests were made in relation to the “Follow up Log” for the subject loan. Each entry begins with “(EDITED) F/U Item.” Numerous other entries in the loan notes also begin this way, or similarly with “(ADDED) F/U Item.” These entries are procedural; they reflect the representative group inputting information as they are following up on or adding to previous items. There is no indication that anything has been removed from the loan note entries on CITI 001157 or edited out [of] them. (Winslow Decl. Exh. 3.)

Plaintiff in reply argues that there is no justification for the belated production of audio recordings after their prior representations that no such recordings existed. (Reply at pp. 3–5.) Plaintiffs further note that the recordings produced do not match the calls noted on the activity log: Defendant produced 17 recordings, constituting seven from 2016, eight from 2017, and two from November 7, 2018. (Supp. Reed Decl. ¶ 6.) However, the activity log does not describe any calls that took place on November 7, 2018. (Supp. Reed Decl. ¶ 9, Exh. T.) Moreover, calls that do appear on the activity log — such as for those that took place on January 5 and 18, February 8, 21, and 27, and November 8, 2018 — were not produced. (Supp. Reed Decl. ¶¶ 8–9, Exh. T.)

Plaintiffs’ motion presents strong evidence of discovery misconduct on the part of Defendant: specifically, it’s failure to produce relevant audio recordings until presented with a motion for sanctions. Indeed, Plaintiffs in reply offer evidence that Defendant’s production is incomplete and not in keeping with the activity log it previously produced. It is thus likely that other responsive audio recordings exist or once existed, but have not been produced. This is discovery misconduct warranting sanctions. (See Code Civ. Proc. § 2023.010, subd. (d), (f).)

Plaintiffs have not shown evidence of spoliation, however. The evidence shows that Defendant withheld production of responsive documents in its possession, and may indeed still be doing so. It is as yet unclear whether those recordings have been lost or destroyed. Moreover, there is no evidence of spoliation with respect to the “EDITED” entries in the activity log, other than the existence of the “EDITED” label. Plaintiff does not contest that many such entries in the log bear this indicator, and Defendant’s explanation that the log is continuously edited by the representative group is consistent with the log. Indeed, the entries themselves indicate that the edits themselves were input on November 5 and 6, 2018, mere days after the logs themselves were created and ten months before this litigation commenced. (Reed Decl. Exh. M.) This document is not evidence of wrongful spoliation.

Plaintiffs seek an order of terminating sanctions, or else issue and evidentiary sanctions prohibiting Defendant from challenging the authenticity of the letters Plaintiffs claims confirmed their loan modification application prior to their foreclosure. (Motion at pp. 10–11.)

The proper remedy is more limited. The motion is GRANTED, in part. Plaintiffs may obtain the monetary sanctions they seek in the amount of $6,075.00, representing 13.5 hours of attorney work at $450 per hour spent preparing the present motion. (Reed Decl. ¶ 19.) An OSC shall be set to determine whether Defendant should be precluded from introducing any audio recordings or portions of the activity log at trial, based on their failure to produce recordings.

This Court invites the parties to continue to meet and confer to resolve these issues.