Judge: Mel Red Recana, Case: 23STCV00405, Date: 2024-10-31 Tentative Ruling
Case Number: 23STCV00405 Hearing Date: October 31, 2024 Dept: 45
Hearing Date: October
31, 2024
Moving Party: Plaintiff
and Cross-Defendant Coutudi Corp.
Responding Party: Defendant and
Cross-Complainant Fang Wang
(1) Motion to Compel Further Responses
to Request for Production of Document Nos. 1, 5, and 6
The court has considered the moving
papers and opposition, no reply was filed.
The
court GRANTS Plaintiff’s motion to
compel responses to Request for Production of Documents, Set One. The court
orders Defendant Fang Wang to serve verified responses, without objections, to
Special Interrogatories, Set Two, within 30 days of the date of this ruling.
The
court GRANTS Plaintiff’s request for
monetary sanctions for its motion to compel responses to Request for Production
of Documents, Set One, in the reduced amount of $1,433 The court orders Defendant
Fang Wang and their counsel of record, jointly and severally, to pay $1,433 to
Plaintiff, through her counsel of record, within 20 days of the date of this
ruling.
Background
Plaintiff Coutudi
Corp., (“Plaintiff”) filed this action on January 9, 2023, against Defendants
Denim Place, Inc., doing business under the fictious name Moderno Jeans (“Denim
Place”) and DOES 1 through 25, alleging causes of action for (1) breach of
contract for the sale of goods, (2) good sold and delivered, and (3) quantum
valebant. On October 16, 2023, Plaintiff Coutudi filed the operative first
amended complaint (“FAC”) against Defendants Modern Jeans, Wei Mao (aka Michael
Mao, “Mao”), Fang Wang (aka Eva Wang, “Wang”), Chang Bo Wu, individually, and
doing business under the fictitious business name Pristine Wear (aka Eric Wu,
“Wu”), Pristine-Wear, Inc., (“Pristine-Wear”) and DOES 1 through 50. The FAC
alleges the following:
Plaintiff
Coutudi Corp. was established through Quanzhou Yuying Garment Co., Ltd.
(“Yuying”), a custom-design clothing manufacturer, for the purpose of building
a U.S. marketing channel and customer base. (FAC, ¶ 13.) Defendant Mao was
hired to incorporate and oversee the U.S. operations of Cotudi Corp., which
included hiring its sales agents Defendants Wang, and Wu. (Id., ¶ 14.) Plaintiff
alleges that Defendants Wang, Wu, and DOES 11 through 25, participated in a fraud
scheme led by Defendant Mao. (Id., ¶ 17.) Plaintiff alleges that
Defendants Mao, Wang, and Wu, used resources provided by Plaintiff to form an
entity, Pristine-Wear Inc., with the purpose of fraudulently diverting funds
from Plaintiff to Defendants’ personal accounts. (Id., ¶¶ 17-19.) Defendant
Wang is listed as the Secretary of Pristine-Wear Inc. (Id., ¶ 21.)
Plaintiff alleges that in July 2022, it discovered that Defendants Mao, Wang,
and Wu were counterfeiting invoices to charge Plaintiff’s customers higher
prices than previously reported to Plaintiff, resulting in over $250,000 in embezzled
profits. (Id., ¶¶ 22-23(a)-(b).) Plaintiff also alleges that Defendants
diverted over $431,000 from Plaintiff by diverting customer remittances to
their personal bank accounts. (Id., ¶ 23(c).) According to the falsified
records, Plaintiff alleges that they incurred legal expenses to uncover the
fraudulent scheme. (Id., ¶ 23(d).)
Procedural
History
On February 24, 2023, Defendant Moderno Jeans filed an
answer and a cross-complaint against Plaintiff and ROES 1 through 20 alleging
causes of action for (1) vicarious liability, (2) breach of contract, (3)
negligent interference with prospective economic relations. On April 14, 2023,
Defendant and Cross-Complainant Modern Jeans filed a first amended
cross-complaint (“FACC”) for damages for breach of implied warranties against
Plaintiff and Cross-Defendant Coutudi, which was answered on May 8, 2023.
On July 15, 2024,
Plaintiff filed a motion to compel responses from Defendant Wang, and request
for an order requiring Defendant Wang to produce a privilege log identifying
documents withheld due to privilege claims. Plaintiff also request $4,134.65 in
sanctions from Defendant Wang.
On August 5,
2024, Plaintiff filed a notice of non-receipt of an opposition.
On August 6,
2024, Defendant Wang filed an opposition.
On August 8,
2024, Plaintiff filed an objection to Defendant Wang’s late-filed opposition.
On August 20,
2024, the Court granted Plaintiff’s ex parte application to reset the hearing
on the motion to compel further responses to October 31, 2024.
Legal
Standard
A party responding to requests for inspection must either provide a
statement of compliance, represent that it lacks the ability to comply, or
object. (Code Civ. Proc. § 2031.210.)
If a party responds with a statement of compliance, the statement must
indicate whether production will be allowed in whole or in part and that all
documents in the responding party’s possession, custody or control to which no
objection is being made will be included in the production. (Code Civ. Proc. §
2031.220.)
If a party responds that a particular demand cannot be complied with it
must include a representation that a diligent search and reasonable inquiry
have been made and that the inability to comply is because the item has never
existed, has been lost, stolen, or misplaced, or has never been in or is no
longer in the responding party’s possession, custody, or control; such response
must also identify the name and address of any person or entity known or
believed to have possession, custody, or control of the item or category of
item. (Code Civ. Proc. § 2031.230.)
If a response includes objections, a privilege log identifying documents
being withheld must be provided. (Code Civ. Proc. § 2031.240.)
When a party propounding demands for inspection deems responses to the
responses to be incomplete or evasive, or deems objections to be without merit,
the propounding party may move for an order compelling further response. Such
motion must set forth facts showing good cause for the discovery, be
accompanied by a meet and confer declaration, and include a separate statement.
Such motion must also be made within 45 days of verified responses or
supplemental responses, or on or before any specific later date the parties
have agreed to in writing. (Code Civ. Proc. § 2031.310, subds. (a)-(c).)
Discussion
Motion
to Compel Further Responses to Request
for Production of Documents, Set One
Procedural
Issues
In this situation, a notice of motion to compel must be served, if at
all, within 45 days after verified responses, or any verified
supplemental responses, were served (extended under Code Civ. Proc., §§
1010.6(a)(3), 1013, if served by mail, overnight delivery, fax or
electronically; see ¶ 9:87 ff.), unless the parties agree in
writing to extend the time. (Code Civ. Proc., § 2030.300(c).) Thus, when
verifications are provided electronically, the deadline for filing the motion
is 45 calendar days plus 2 court days after service of verifications. (Code
Civ. Proc. § 1010.6(a)(3); Golf & Tennis Pro Shop, Inc. v. Sup.Ct.
(Frye) (2022) 84 CA 5th 127, 136-137, motion filed 1 day late was
untimely.) Papers opposing a motion must be served and filed at least 9
court days before the hearing, unless the court permits a shorter time.
(CCP § 1005(b); CRC 3.1300(a).)
On March 5, 2021, Plaintiff served the Request for Production of
Documents, Set One on Defendant and Cross-Complainant Fang Wang, with responses
due by April 8, 2024. (Declaration of Rodney W. Bell, (“Bell Decl.”) ¶ 2;
Exhibit 1.) On April 9, 2024, Defendant
Wang served responses to the Request for Production of Documents, Set One on
Plaintiff. Defendant Wang served responses on April 9, 2024, and served
supplemental responses on July 1, 2024. (Bell Decl., ¶¶ 2-3; Exhibit 1.)
Plaintiff filed the Motion to Compel on July 15, 2024, on the grounds
that the supplemental responses failed to address Request for Production
categories 1, 5 and 6. (Id., ¶ 2.) The hearing on the Motion to Compel was set for
August 13, 2024. On July 30, 2024, the action was reassigned from the Honorable
Michael P. Linfield to the Honorable Peter A. Hernandez in Department 34 at
Stanley Mosk Courthouse, effective August 5, 2024, (7/30/24 Minute Order.) On August
5, 2024, six court days before the hearing, Plaintiff filed proof of
service of the case reassignment, and notice of non-receipt of opposition.
(8/5/24 Notice of Non-Receipt of Opposition.) On August 6, 2024, five court
days prior to the scheduled
hearing, Defendant Wang filed an opposition. Defendant Wang’s counsel, Aujin
Zhang, declares the opposition was filed as soon as possible because while
traveling in China, where Yahoo email servers are inaccessible, notice of Plaintiff’s
Motion to Compel was not received until August 4, 2024. (Opposition, p. 5:18-6:2;
Declaration of Aijun Zhang (“Zhang Decl.”) ¶¶ 1-6.) On August 8, 2024, Plaintiff
filed an objection to Defendant’s late-filed opposition, arguing that Defendant’s
counsel failed to state a reasonable excuse because the moving papers were
e-served on Attorney Zhang on July 15, 2024, and the response was due on July
31, 2024. (Objection, pp. 2:15-3:11.)
The Court exercises its discretion to consider the late
opposition. (CRC 3.1300(d).)
Merits
of the Motion
Plaintiff Coutudi Corp. moves for an order compelling Defendant Wang to
provide further responses to its First Demand for Production of Documents (“RFP”)
(Set One) Categories 1, 5, and 6, which Plaintiff contends pertain to the issue
of Defendant’s liability as officer or employee of Defendant Pristine-Wear Inc,
as allegedly organized by Defendants Mao and Wu. Defendant Wang opposes the
motion on privacy grounds, arguing that Plaintiff has failed to make the
required showing of a compelling reason to invade Defendant’s privacy.
Category No. 1
RFP No. 1: “DOCUMENTS that reflect, evidence or refer to monies received by WANG
from Pristine-Wear Inc. between January 1, 2020, to February 29, 2024, without
regard to the reason for or characterization of the funds. Responsive material
includes but is not limited to, dividend statements, statements of account,
paychecks, paycheck stubs, checks, check stubs, checkbook registers, Form
1099s, Form W-2s, Form K-1s, loan applications, income tax returns, wire transfer
advices, deposit slips, ATM receipts, electronic transfer and deposit confirmations,
bank statements, credit union statements, diaries, journals, spreadsheets,
personal finance software reports, accounting reports, correspondence, email
messages, text messages, WeChat messages, telephone messages and notes.
Plaintiff compels for further production of documents on RFP No. 1 on
the grounds that it is likely to lead to the admission of relevant evidence in
revealing Defendants’ fraudulent scheme. In supporting this claim, Plaintiff points
to Defendant Wang’s April 9, 2024, verified responses, in which she states that
she had no relationship with Pristine-Wear, (Bell Decl., ¶ 6; Special
Interrogatory Nos., 3 and 5), as contradicted by invoices dated June 15, 2021,
citing Defendant Pristine-Wear and Plaintiff Coutudi Corp., listed at the same
address in Chino, California. (Bell Decl., ¶ 8; Exhibits 5 & 6), sales-related
emails forwarded by Defendant Wang to eva@pristine-wear.com, (Bell Decl., ¶ 9,
Exhibit 7), and a copy of the Statement of Information, listing Defendant Wang
as the Corporate Secretary of Pristine-Wear Inc., (Bell Decl., ¶ 10, Exhibits
10, 11.)
Category Nos. 5 and 6
RFP No. 5: “All DOCUMENTS created between January 1, 2020, and February 29, 2024
that contain, refer to or describe communications between WANG and Changbo
“Eric” Wu. Responsive documents include, but are not limited to correspondence,
email messages, text messages, WeChat messages, telephone messages and notes.”
RFP No. 6: “All DOCUMENTS created between January 1, 2020 and February 29, 2024
that contain, refer to or describe communications between WANG and Wei “Michael”
Mao. Responsive documents include, but are not limited to correspondence, email
messages, text messages, WeChat messages, telephone messages and notes.”
In response to RFP Nos. 1, 5, and 6,
Defendant Wang answered:
“Objection. This request is unduly burdensome and overly broad.
Responding party objects to this request on the basis that this request is
vague and ambiguous. Further objection on the ground that this request seeks
information that is irrelevant and not likely to lead to the discovery of
admissible evidence. Further objection on the ground that this request seeks
information protected by right of privacy or protected from disclosure as
confidential proprietary information or by right of privacy.”
The Court finds that Defendant Wang’s responses to RFP Nos. 1, 5, and 6
must be supplemented. These requests seek information that is limited in scope
to support Plaintiff’s allegation that Defendant Wang was involved with the
Pristine-Wear entity. (Decl. of Bell, ¶ 9.) In light of the evidence produced
in discovery, and Defendant Wang’s absolute denial of involvement with
Defendant Pristine-Wear Inc., the Court finds the corporate relationship has
been placed at issue.
The court therefore GRANTS Plaintiff’s motion
to compel further responses to Request for Production of Documents, Set One. The
court orders Defendant Fang Wang to serve verified responses, without
objections, to Request for Production, Set One, within 30 days of the date of
this ruling.
Request for Monetary Sanctions
The court is
authorized to award as sanctions the moving party's reasonable expenses
including attorney fees on the motion to compel. “Reasonable expenses” include
the time moving party's counsel spent in research and preparation of the motion
and court time in connection with the motion. (See Ghanooni v. Super Shuttle
of Los Angeles (1993) 20 CA4th 256, 262, 24 CR2d 501, 505; Cornerstone
Realty Advisors, LLC v. Summit Healthcare REIT, Inc. (2020) 56 CA5th
771, 790, “Reasonable expenses may include attorney fees, filing fees, referee
fees, and other costs incurred”.) Lawyers or other self-represented litigants
(appearing on their own behalf) cannot recover attorney fees as discovery
sanctions. (Argaman v. Ratan (1999) 73 CA4th 1173, 1179, Kravitz v.
Sup.Ct. (Milner) (2001) 91 CA4th 1015, 1021, 111 CR2d 385, 389
(involving inspection demands).)
Plaintiff
requests $4,134.65 in attorney’s fees and costs for monetary sanctions against
Defendant and their counsel of record for this motion. (See Bell Decl., ¶ 13.)
Plaintiff’s counsel’s hourly rate is $450 per hour and Plaintiff requests a
total of 9 hours for this motion, the $61.65 filing fee and the $23.00
CourtConnect video appearance fee. (Id., at ¶ 14.) Plaintiff states
that 6.5 hours were incurred in preparing the Motion and supporting papers, an
anticipated 1.5 hours were to be incurred in reviewing the opposition and preparing
a reply, for a total of 8 hours at $3,600.00. (Id.) While Plaintiff’s counsel’s hourly
rate is reasonable, the number of hours Plaintiff seeks to recover is
unreasonable. The issues raised in the motion do not justify $4,134.65 in
attorney’s fees and costs. The court finds that reducing the recoverable hours
to three hours for this motion is reasonable. As for the costs, the court finds
Plaintiff’s request for the $61.65 filing fee and the $23.00 CourtConnect
appearance fee reasonable. Thus, Plaintiff’s total reduced recoverable amount
in attorney’s fees and costs for this motion is $1,433.00 ([$450/hour x 3 hours]
+ $60 filing fee + $23.00 CourtConnect fee).
The
Court therefore GRANTS Plaintiff’s request for monetary sanctions for its
motion to compel responses to Requests for Production of Documents, Set One, in
the reduced amount of $1,433.00 The court orders Defendant Wang and her counsel
of record, jointly and severally, to pay $1,433.00 to Plaintiff, through its
counsel of record, within 20 days of the date of this ruling.
It is so
ordered.
Dated:
October 31, 2024
_______________________
MEL RED RECANA
Judge of the
Superior Court