Judge: Mark C. Kim, Case: 19LBCV00551, Date: 2023-05-18 Tentative Ruling

Case Number: 19LBCV00551    Hearing Date: May 18, 2023    Dept: S27

1.     Background Facts

Plaintiff, MOC Products Company, Inc. filed this action against Defendants, Hooman Automotive Group and Hooman Michael Nissani for breach of contract and related claims arising out of Defendants’ alleged breach of an exclusive distribution contract.  Plaintiff filed the complaint on 9/10/19.  The complaint includes causes of action for breach of contract, quantum meruit, account stated, and open book account. 

 

Plaintiff has added numerous defendants as doe defendants in the action, including R&H Automotive Group, Inc., HTL Automotive, Inc., and HTL Automotive, Inc.

 

2.     Motion to Compel Deposition

Plaintiff moves to compel the deposition of Defendants’ PMKs.  Both parties’ papers present numerous issues for resolution.  Notably, the Court previously ordered the parties to use a discovery referee to resolve discovery issues, as the parties have been unable, throughout the litigation, to resolve their issues.  The parties remain uncooperative and issues remain unresolved.

 

The issues presented by way of the motion include:

·         Has the discovery cut-off passed such that the Court cannot rule on this motion?

·         If the Court can rule on this motion, which Defendant entities are currently active entities with the California Secretary of State?

·         Is Tina Palamores the PMK for the entities?

·         Do Defendants need to produce documents in connection with any depositions that go forward?

·         If the motion is otherwise granted, did Plaintiff provide a necessary separate statement for imposition of sanctions more harsh than monetary sanctions?

·         Was proper notice given of the type of sanctions sought?

·         If notice was given and the separate statement was provided, are such sanctions appropriate?

 

  1. Initial Notes

The caption of Defendants’ opposition papers indicates Duncan J. McCreary has filed the opposition papers, and he is “specially appearing” for Defendants.  The caption goes on to identify the papers as “HOOMAN NISSANI’S OPPOSITION…”  It is not clear why McCreary is specially appearing, as he has been retained by Defendants throughout this litigation.  It is also not clear whether all of the defendants are opposing the motion, or only Hooman Nissani. The Court asks McCreary to be prepared to address this issue at the hearing.

  1. Discovery Cut-Off

The threshold issue on this motion is whether the discovery motion cut-off date has passed.  Defendants contend discovery was cut off as of 2/06/23.  The parties appeared at the FSC on 3/03/23.  The Court’s minute order does not clearly state everything that happened that day, but does state that the FSC and trial dates are being continued, and does state, “Plaintiff is to take the deposition of Defense’s Person Most Knowledgeable is scheduled for March 9, 2023, at 10:00 a.m. via Zoom.” 

 

Thus, at a minimum, the Court extended the discovery cut-off as to Defendants’ PMK depositions, which were to take place on 3/09/23.  The order is silent as to documents, but because documents had, at all times been sought in connection with the PMK depositions, the Court finds the order was intended to encompass documents as well.

 

The Court finds this motion is a motion that arises out of Defendants’ alleged violation of the 3/03/23 order, and therefore there are no issues relating to the discovery cut-off that preclude a hearing of this motion on its merits.

 

  1. Defense Corporate Entities

There are five corporate entities named as defendants in this case.  It appears R&H Automotive Group, Inc., RHH Automotive, Inc., HK Automotive, Inc., and RHN, Inc. are active corporate entities at this time.  The Court wishes to have the parties confirm this information at the time of the hearing.

 

  1. Tina Palamores

R&H produced Palamores as the PMK for R&H.  It appears the remaining corporate entity defendants intend to produce Palamores as well.  The parties agree that Palamores is a clerical person who was hired after Defendants ceased doing business and she merely does collections work for Defendants.  Defendants contend Palamores is their sole employee, and therefore she is necessarily the person most knowledgeable to the defendants on all topics.  Both the Court and the discovery referee have previously found this to be impossible, as Palamores herself has testified that someone, Torres or Nissani, hired her to do collections.  It seems that Torres and/or Nissani retains an ownership interest in the defendant entities, and defendants are taking the position that they are not “employees” because they have an ownership interest but do not do day-to-day work at the companies.  The Court knows of no authority to support this position.  If these persons have superior knowledge of the workings of the corporate entities, then they are the PMKs as to the entities, and they must appear for deposition.  Notably, if one of them is the PMK on some topics and another is the PMK on other topics, then they must both appear.  

 

  1. Sanctions

It is clear that Defendants have been playing games at every step of the litigation, such that sanctions are appropriate.  The issue is which sanctions to impose. 

 

The Court finds monetary sanctions in the requested amount of $4692.50 is both reasonable and appropriate.  Defendants and their attorney of record, jointly and severally, are ordered to pay monetary sanctions to Plaintiff, by and through its attorney of record, in the amount of $4692.50.

 

The Court finds the request for issue and/or evidentiary sanctions must be denied because Plaintiff did not clearly detail what specific sanctions is it seeking. 

 

The Court finds terminating sanctions are arguably appropriate as to H&R, which was ordered to produce its PMK for deposition on 11/20/20 and 3/03/23, but has continued to fail to do so.  Terminating sanctions against the other entities are arguably appropriate for their failure to produce a PMK despite the 3/03/23 order.  Because terminating sanctions are the most severe penalty available, the Court will give Defendants one more opportunity to produce their actual PMK(s) for deposition.

 

Because there has been difficulty in scheduling, the Court asks the attorneys for both parties to come to the hearing with their calendars ready to schedule PMK depositions.  Defense Counsel must contact the PMKs for Defendants and determine their availability, and must have numerous dates available for scheduling when he appears at the hearing.