Judge: Mark A. Young, Case: BC572579, Date: 2023-03-24 Tentative Ruling

Case Number: BC572579    Hearing Date: March 24, 2023    Dept: M

CASE NAME:           Lawler, v. Choudhury, et al.

CASE NO.:                BC572579

MOTION:                  Motion for Terminating, Issue or Evidentiary Sanctions

HEARING DATE:   3/24/2023

Legal Standard

If a party fails to obey a court order compelling it to provide a discovery response, “the court may make those orders that are just, including the imposition of an issue sanction, an evidence sanction, or a terminating sanction . . ..  In lieu of or in addition to this sanction, the court may impose a monetary sanction . . ..” (CCP §§ 2030.290(c), 2030.300(e), 2031.300(c), 2031.320(c).) Misuse of the discovery process, which includes disobeying a court order to provide discovery, is conduct subject to sanctions. (CCP § 2023.010(g).) Possible sanctions are:

(a) [A] monetary sanction ordering that one engaging in the misuse of the discovery process, or any attorney advising that conduct, or both pay the reasonable expenses, including attorney's fees, incurred by anyone as a result of that conduct….

(b) [A]n issue sanction ordering that designated facts shall be taken as established in the action in accordance with the claim of the party adversely affected by the misuse of the discovery process. The court may also impose an issue sanction by an order prohibiting any party engaging in the misuse of the discovery process from supporting or opposing designated claims or defenses.

(c) [A]n evidence sanction by an order prohibiting any party engaging in the misuse of the discovery process from introducing designated matters in evidence.

(d) [A] terminating sanction by one of the following orders:

(1) An order striking out the pleadings or parts of the pleadings of any party engaging in the misuse of the discovery process.

(2) An order staying further proceedings by that party until an order for discovery is obeyed.

(3) An order dismissing the action, or any part of the action, of that party.

(4) An order rendering a judgment by default against that party.

(e) [A] contempt sanction by an order treating the misuse of the discovery process as a contempt of court.

(CCP § 2023.030 [emphasis added].)

The party seeking to impose sanctions need only show the failure to obey earlier discovery orders. (Puritan Ins. Co. v. Superior Court (1985) 171 Cal.App.3d 877, 884 [interpreting former statute dealing with “refusal” to comply].) However, numerous cases hold that severe sanctions (i.e., terminating or evidentiary sanctions) for failure to comply with a court order are allowed only where the failure was willful. (See R.S. Creative, Inc. v. Creative Cotton, Ltd. (1999) 75 Cal.App.4th 486, 495; Vallbona v. Springer (1996) 43 Cal.App.4th 1525, 1545; Biles v. Exxon Mobil Corp. (2004) 124 Cal.App.4th 1315, 1327.) The burden of proof then shifts to the party seeking to avoid sanctions to establish a satisfactory excuse for his or her conduct. (Corns v. Miller (1986) 181 Cal.App.3d 195, 201; Williams v. Russ (2008) 167 Cal.App.4th 1215, 1227.)

EVIDENTIARY ISSUES

Defendant’s request for judicial notice is GRANTED.

Plaintiff’s request for judicial notice is GRANTED.

Analysis

Plaintiff Jill Lawler moves for an order of sanctions against Defendants Bikram Choudhury and Bikram’s Yoga College of India, L.P (BYIC).

The Court concludes that Plaintiff has demonstrated that Defendants have willfully violated this Court’s discovery orders. Simply put, Defendant Bikram Choudhury, the principal partner and party-affiliated witness of BYIC, has repeatedly refused to sit for his deposition in violation of multiple court orders. Defendants have thereby deprived Plaintiff of a fair opportunity to elicit evidence necessary to prosecute her case against both Defendants.

A timeline of events is illustrative of Defendants’ offensive conduct.  From 2015 to 2016, Plaintiff engaged in informal efforts to secure Choudhury’s deposition without success. (Reed Decl., ¶ 10.) After those efforts failed, on August 1, 2017, Lawler first noticed Choudhury’s deposition for September 7, 2017, and September 8, 2017. (Id. ¶ 14, Ex. 7.) Choudhury objected to the deposition and refused to appear. (Id., Ex. 8.) From October 15, 2017, through May 21, 2020, this case was subject to a bankruptcy stay. Following the lifting of the bankruptcy stay, the parties re-engaged in discussions regarding Choudhury’s deposition. (Reed Decl., ¶ 17.)

In August 2020, Choudhury informed Plaintiff that he would not submit to a deposition by any means, other than written questions. (Reed Decl., ¶ 17.) Despite this untethered demand, Plaintiff noticed Choudhury’s deposition via remote means for September 9, 2020. (Id., Ex. 10.) On September 3, 2020, Choudhury objected yet again and refused to appear. (¶ 19, Exhibit 11.) Mr. Choudhury reiterated that he would refuse to make himself available until “after the conclusion of the global pandemic and regaining access to legal counsel and reliable technology. In the meantime, Mr. Choudhury is willing to immediately respond to written deposition questions.” (Id.)

On October 23, 2020, Plaintiff filed a motion to compel the deposition of Mr. Choudhury and sought sanctions in the amount of $6,000. (Id., ¶ 23, Ex. 12.) Ultimately, on November 20, 2020, the parties, including both Defendants, entered into a stipulation whereby defendant Choudhury was to be produced for deposition via remote means by February 28, 2021. (¶ 25, Ex. 13.) Thus, both Choudhury and BYCI stipulated that they would work with Plaintiff “to coordinate the deposition of [Choudhury] virtually via Zoom . . . by February 28, 2021[.]” (Ibid.) On February 15, 2021, having received no deposition dates from Defendants regarding the deposition, Plaintiff noticed Choudhury’s deposition for February 26, 2021. (Id., ¶ 26, Ex. 14.) The parties again agreed to a 30-day extension to produce Choudhury for deposition.

On March 18, 2021, Defendants jointly moved for summary judgment.  On April 12, 2021, Lawler filed a second motion to compel the deposition of Defendant Choudhury. (Reed Decl., ¶ 31.) On May 6, 2021, the Court ordered Choudhury to appear for his deposition within 20 days. (Ex. 18.) The Court noted that Choudhury had violated the stipulation requiring him to appear by February 28, 2021. The Court also disbelieved Choudhury’s unsupported assertions that he did not have reliable access to the internet. (Id.) While Choudhury’s deposition was held on May 24, 2021, the deposition lasted only approximately one hour, in part due to Choudhury and defense counsel’s behavior. Accordingly, the Court again granted Plaintiffs’ motion to compel Choudhury’s deposition and for a protective order against Choudhury and counsel on June 25, 2021. (¶ 34, Ex. 19.) The Court also appointed a referee. (Id.)  In its written ruling, the Court concluded that Defendants’ counsel made numerous improper objections and appeared to have been coaching the witness.  (Id.)

On June 30, 2021, the referee attempted to obtain dates for the continued deposition. (Id., Ex. 20.) However, Defendants’ counsel proffered a new excuse — Choudhury was not available for deposition because he recently had an undisclosed family member pass away.  Negotiations between the parties for the continued deposition did not begin again until 2022. On January 13, 2022, defense counsel notified Plaintiff that Choudhury has been non-responsive for some time, that Choudhury was not then currently responding to Defense counsel, and that they would again try to reach Choudhury and get back to Plaintiff’s counsel within the week regarding his deposition. (Reed Decl., ¶ 42, Ex. 23.) Plaintiff attempted to follow up throughout January 2022. (Id., Exs. 22-24.)

On February 23, 2022, Plaintiff filed a fourth motion to compel Choudhury’s deposition. Defendants both opposed this motion. On March 23, 2022, the Court granted Plaintiff’s fourth motion to compel Choudhury’s deposition, finding that Choudhury willfully disobeyed the Court’s June 2021, order.  (Reed Decl., Exh. 25.)  In concluding that Choudhury acted willfully and without substantial justification, the Court considered the entire history of the matter and Choudhury’s actions. 

Despite these four court orders, and almost eight years of efforts by Plaintiff’s counsel, Plaintiff has not been able to meaningfully depose Choudhury, a named defendant, the alleged tortfeasor, and BYCI’s principal. There is no dispute that Choudhury’s deposition remains outstanding, and it is unlikely that it will ever occur. Furthermore, Choudhury ended contact with his counsel. Based on these facts, there is no reasonable probability that he will comply with any of this Court’s orders, or appear for a deposition, personally or on behalf of BYIC. Thus, in light of the continued discovery abuse by Choudhury and the Court’s attempts to impose lessor sanctions to encourage compliance, there is no meaningful alternative sanction that the Court could impose other than a terminating sanction against Choudhury.

The only question that remains is whether BYCI should be subject to the same sanction. Given the above discussed record, the Court concludes that it is.  Under the longstanding principles of agency law, general partners are both agents and principals of the partnership, and, as such, they are jointly and severally liable for the acts of the partnership. (Corp. Code § 16301; Goehring v. Superior Court (1998) 62 Cal.App.4th 894, 906; see Blackmon v. Hale (1970) 1 Cal.3d 548, 557 [every partner is an agent of the partnership for the purpose of its business, and the act of every partner for apparently carrying on in the usual way the business of the partnership of which he is a member binds the partnership].) The Court would also note that the discovery act recognizes that if a motion to compel a party affiliated witness is granted, both the deponent and the party “with whom the deponent is affiliated” are both subject to sanctions. (CCP § 2025.450(g)(1).) A “party affiliate witness” is defined by the code as “an officer director, managing agent, or employee of the party.” (Lopez v. Watchtower Bible (2016) 246 Cal.App.4th 566, 600.)  Even a “third party (such as … a former officer) may be deemed a party’s ‘managing agent’ upon a factual showing that the deponent currently serves in that functional role.” (Id., at 601.)

There is no reasonable dispute that Choudhury was a party affiliated witness throughout this action. On October 15, 2017, Choudhury submitted documentation to the U.S. District Bankruptcy Court, declaring under penalty of perjury that he was a “general partner of Bikram’s Yoga College of India LP, a California limited partnership.” (Reed Decl., Ex. 27.) On September 29, 2020, Choudhury signed verifications in this action on behalf of BYIC for special interrogatories, form interrogatories (general), and request for admissions.  (Id., Exs. 35, 36, 37.) By having Choudhury sign these verifications, BYIC has admitted that he remained in his position as a general partner throughout the pendency of the bankruptcy.

Prior testimony also confirms that Choudhury controlled BYIC for all intents and purposes. Choudhury has previously stated that (1) he is the “head of the Yoga College” (Reed Decl., Exhibit 30, TT, 111:12-17, 137:27-138:10; Ex. 31, TT, 58:10-15), (2) he had “final say at the yoga college” (Ex. 30 at 122:15-21) (3) he was “President and an officer, President / CEO” (Ex. 30 at 158:6-13; Ex. 31 at 40:3-8), (4) “nobody gets paid without [his] permission” (Ex. 30 at 178:24- 179:4), (5) it was his college/business (Ex. 30 180:13-18; Ex. 31, at 27:11-16 ), (6) the Choudhury’s were the only persons authorized to sign checks on behalf of the College (Ex. 31 at 30:22-25), (7) he owns the College and only he and his wife appeared on the tax returns (Ex. 32 – 343:13-11, 346:5-9; Ex. 33, 545:21; Ex. 34, 911:13-913:8), and (8) BYIC is “his entity” (Ex. 33, 682:13-19).

BYCI argues that because it was in Chapter 7 bankruptcy during the relevant period, under operation of law, it could no longer operate as a business. (See Everett v. Art Brand Studios, LLC, (N.D. Cal. 2016) 556 B.R. 437, 440–41  ("[A] Chapter 7 bankruptcy results in the end of the debtor corporation's business operations and liquidation of the debtor corporation's assets. See 11 U.S.C. §§ 701–784. A Chapter 7 bankruptcy trustee is appointed, who gathers and sells the debtor corporation's nonexempt assets and uses the proceeds of such assets to pay the debtor corporation's creditors in accordance with provisions of the Bankruptcy Code. 11 U.S.C. §§ 701, 704.") BYCI posits no authority that shows that its general partners would no longer be considered officers, principals, or party-affiliated witnesses, whether or not it was allowed to operate its business pursuant to the Bankruptcy Code. This position is also contradicted by BYCI’s actions, including having Choudhury verify discovery responses on its behalf in this action.

Without citation to authority that BYCI cannot be held responsible for their partner’s actions while under Bankruptcy protection, the Court will not allow BYCI to avoid responsibility for its general partner under its control, especially where their interests align. Critically, both Defendants are advantaged by Choudhury’s discovery abuse to the prejudice of Plaintiff. Moreover, there is some evidence that joint counsel for Defendants have enabled Choudhury’s history of discovery abuse throughout this action, as a part of an aligned strategy to forestall discovery. Because Choudhury’s actions are directly attributable to BYIC, BYIC would ultimately benefit from this abuse, and BYIC was willfully involved in this abuse, a terminating sanction appear appropriate to both Defendants.

Moreover, BYIC has engaged in its own discovery abuse. At a minimum, BYIC violated its stipulation to produce Choudhury for deposition via remote means in February 2021. BYIC also joined in the various oppositions to Plaintiff’s motions to compel Choudhury’s depositions. Furthermore, Plaintiff notes that BYIC has made unmeritorious objections and copious evasive responses to discovery. (See, Reed Decl., Exs. 28-29, 44-45.) BYIC has also been resistant to producing any discovery dealing with Defendants’ substantive liability. Thus, the Court cannot conclude that BYIC has been anything but complicit with the discovery abuse that has taken place in this case.

Therefore, the Court will grant terminating sanctions against both Defendants. Defendants’ answers are ordered stricken and default is entered as to both Defendants.  Plaintiff may prepare a judgment and supporting documentation for the Court’s review.