Judge: Michael D. Washington, Case: 37-2021-00011291-CU-BC-NC, Date: 2024-06-13 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - May 16, 2024

05/17/2024  01:30:00 PM  N-31 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Michael D Washington

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Civil - Unlimited  Breach of Contract/Warranty Motion Hearing (Civil) 37-2021-00011291-CU-BC-NC VRDO PLAZA PARTNERSHIP VS TH & SC ENTERPRISES LLC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion for Sanctions, 04/25/2024

Disposition The Motion for Terminating Sanctions brought by plaintiff/cross-defendant VRDO Plaza Partnership (Plaintiff) is disposed as follows: --as to the request to strike the Answer filed by defendants/cross-complainants TH & SC Enterprises LLC, Tyler Kunz, and Man Sze Kunz (collectively, Defendants), the request is GRANTED and the Clerk is directed to STRIKE Defendants' Answer (ROA 47) --as to the request to strike the Cross-Complaint filed by Defendants, the request is GRANTED and the Clerk is directed to STRIKE Defendants' Cross-Complaint (ROA 50) --as to the request to render Judgment by Default the request is DENIED, Plaintiffs will have to proceed with a formal Request for Default (Judicial Council Form CIV-100) and the default prove-up procedure --as to the request for monetary sanctions in the amount of $4,680.00, the request is DENIED on grounds that as the harshest sanction of termination is already being granted, imposition of 'lesser' sanctions like monetary sanctions would have no role in compelling compliance and would compound in a manner that would be unjust under the circumstances.

To provide time for Plaintiffs to proceed with their default request and default prove-up, this matter is set for a Status Conference re Status of Default and Default Prove-Up on Friday, August 16, 2024 at 11:15 a.m. in Department N-31.

Request for Judicial Notice The Request for Judicial Notice brought by Plaintiff is GRANTED pursuant to Evidence Code § 451, et seq., as all documents for which judicial notice is requested are part of the court file. As an aside, the Court notes that all documents within the court file are within the record on this case and thus formal judicial notice is not required in order to acknowledge the history of filings in this case.

Procedural Issues – Striking Improperly Served Opposition On the Court's own motion, and pursuant to argument provided by Plaintiff in reply, the Opposition filed by defendants/cross-complainants TH & SC Enterprises LLC, Tyler Kunz, and Man Sze Kunz (collectively, Defendants) is ORDERED STRICKEN pursuant to Code of Civil Procedure § 436(b) because it is not drawn or filed in conformity with an order of the court.

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3108946 CASE NUMBER: CASE TITLE:  VRDO PLAZA PARTNERSHIP VS TH & SC ENTERPRISES LLC [IMAGED]  37-2021-00011291-CU-BC-NC Merits of Motion This case has a lengthy history of protracted discovery litigation. And, as this Court has previously noted, the density of that discovery litigation is out-of-sync with the scope of the underlying lawsuit – a lawsuit that pertains to the lease of a hot dog stand. Generally, as a result of that history of sub-par discovery practice, it appears that Defendants have been deficient in their responses or simply slow-to-respond using tactics designed to delay. This Court has now addressed these deficiencies on numerous occasions. (See ROA 112, 166, 175, and 237.) To the extent that the Court applies some discretion on the motion presently before it, that history informs the Court's deliberation.

Examples of this drawn-out history include the Court's following characaterizations: --'This entire history seems to be reflective of a bizarre cat and mouse approach to even the basics of litigation when it comes to simply serving documents professionally on opposing counsel.' (ROA 166, p. 6.) --'Likewise, the fact that Attorney Ramirez still intended to be serving supplemental missing documents that late also makes accurate assessment of the issue difficult. Nonetheless, the Court made clear in the prior ruling that substantive production was to be made, the fact that after significant passage of time that question still remains obfuscated is sufficient indication to the Court that a formal order compelling production is appropriate.' (ROA 175, p. 3.) --'Given that evidentiary sanctions are the harsher sanction, and, for reasons set forth above, there is sufficient basis i[n] this case to begin imposing sanctions beyond mere monetary sanctions, the Court will grant the evidentiary and monetary sanctions, but will not issue further orders to produce discovery responses. The evidentiary sanctions will foreclose the need to litigate the issues to which the discovery responses would pertain in any event.' (ROA 237, p. 3.) Plaintiff now brings a motion seeking terminating sanctions and seeking monetary sanctions in the amount of $4,680.00.

In addition to previously issuing evidentiary sanctions as to some discovery, this Court also ordered production as to certain other discovery. (ROA 237 and 238.) According to the moving papers, Defendants have failed to comply with that court order as well.

Plaintiffs now move for terminating sanctions on grounds that, inter alia, lesser sanctions have proven ineffective at prodding Defendants to participate in the discovery process as required by law. The Court is in agreement with this position, but only to an extent. It appears that some of the prior orders on discovery have resulted in some subsequent production. It also further appears that most of the monetary sanctions that have been imposed have been paid to Plaintiffs.

On the other hand, partial compliance with a court order is not necessarily the strongest foundation upon which to oppose a request for sanctions. While court orders are not a 'pick and choose' kind of practice, wherein a party can get 'partial credit' for partial compliance, the entire purpose of the 'lesser sanctions first' approach in discovery motions is in the hope that as sanctions get harsher, parties will comply – thereby keeping the focus of the litigation on the substantive merits of the case rather than permitting a 'win' by procedural fiat. With that as background, the Court is mindful that Plaintiff is requesting the harshest sanction: termination. The Court is reticent to grant so harsh a sanction if lesser sanctions have been able to coax even partial compliance, as California law has a strong preference for trial on the merits.

Nonetheless, the Court does note that the discovery dispute in this case have been particularly challenging in terms of weeding through the deficiencies, which, over time, have seemed to rest more and more at the hands of Defendants.

Were failure to produce discovery the only deficiency currently being raise, the Court would exercise Calendar No.: Event ID:  TENTATIVE RULINGS

3108946 CASE NUMBER: CASE TITLE:  VRDO PLAZA PARTNERSHIP VS TH & SC ENTERPRISES LLC [IMAGED]  37-2021-00011291-CU-BC-NC discretion in a manner that favored continuing along the 'lesser sanctions first' pathway in order to avoid the harshest sanction of termination – not because the pattern of conduct at issue does not warrant termination, but because the strong policy preference toward trial on the merits warrants trying to give party every chance to come into compliance before applying the harshest sanction.

However, there is a secondary problem here that, when taken into consideration as part of the totality of the circumstances, pushes the case 'over the edge' and warrants the sanction being requested by Plaintiffs. At an early stage of the discovery dispute in this case, there was significant back-and-forth about producing documents electronically. This Court detailed the nature of that back-and-forth in its July 26, 2023 Minute Order. (ROA 166.) At that time, this Court specifically ordered, in bolded font, that the Court was expressly ordering that neither party could use electronic service going forward and, instead, the parties were to use old-school methods such as personal service, mail, overnight delivery, etc. to effect service in this case. (ROA 166, p. 2.) Defense counsel failed to comply with this order on at least one occasion, and then failed to comply with it again, at which time this Court ruled as follows: To the extent that Defendants oppose the instant motions, the Court first addresses a procedural argument: that the opposition briefs were improperly served electronically by Defendants. As Plaintiff has noted, this Court expressly ordered that all parties are to refrain from electronic service and use other methods (outlined in a previous order) and this order was made for a specific reason having do to with significant gamesmanship that was arising between the parties with regard to claiming that served documents were going unreceived due to ending up in 'junk' mail folders and efforts to utilize other technologies that would allow the sender to 'collect data' on the recipient in order to confirm that a recipient had opened an email (in order to counter the argument that certain service had ended up in 'junk' mail). Plaintiff's counsel appears to have fully complied with this court order since it issued.

Defense counsel has not – a failure that this Court has overlooked on at least one prior occasion. There is a certain unfairness that permeates into the process when an order issued across-the-board to both parties is followed by only one party and ignored by the other, and that unfairness dampens the solemnity of a court order in the first instance if it can go unheeded and ignored. As such, in a careful exercise of discretion, this Court finds it appropriate to decline to consider the opposition documents that have been submitted by Defendants but that only are supported by a proof of service indicating that they were electronically served on Plaintiff. In so declining to consider the opposition documents that were served electronically, the Court strongly cautions defense counsel that any future repeated failures of this nature to comply with the prior court order requiring service other than electronic service will be met with the same draconian exercise of discretion to not consider the filing.

In this particular instance, the Court notes no substantive difference in the outcome of the motions would result even if the oppositions were considered. Having access to the opposition briefs and having reviewed them before seeing the argument in reply as to the improper service, the Court is knowledgeable and informed about the substantive arguments made in opposition and finds them unpersuasive anyway.

(ROA 237, p. 2 (emphasis in original).) After at least two violations, and after the above court order in which the Court declined to consider an opposition filed by Defendants and admonished Defendants that future repeated failures of this nature will be met with the same draconian exercise of discretion to not consider the filing, Defendants yet again served the opposition brief or the instant motion electronically.

(ROA 273, p. 24.) Plaintiffs have objected that this remains improper and that, after the many admonitions, Plaintiffs' opposition must not be considered because Plaintiff is repeatedly – and perhaps even somewhat flagrantly – now proceeded to violate a court order.

To be clear, declining to consider an opposition brief on a motion of a different nature might have a less draconian impact. The proverbial stakes are quite high for the instant motion as Plaintiffs are seeking the sanction of termination. On the other hand, as noted above, Defendants' failures to comply with discovery have been continuous such that even if the Court would be reticent to reach the harsher sanction of termination on the discovery failures alone, this history of discovery in this case is well on its way toward the harsher remedy. Indeed, this Court has already issued evidentiary sanctions that will Calendar No.: Event ID:  TENTATIVE RULINGS

3108946 CASE NUMBER: CASE TITLE:  VRDO PLAZA PARTNERSHIP VS TH & SC ENTERPRISES LLC [IMAGED]  37-2021-00011291-CU-BC-NC preclude Defendants from introducing certain evidence at trial. Ultimately, while the fact that declining to consider the opposition brief in this case will have a cascading effect that ends in termination of the case, there are a number of checkpoints and guardrails that prevent such a result from being unjust or draconian as applied here.

Much like the sliding scale approach of an unconscionability test in the context of contract law, where both substantive and procedural unconscionability are required but where more of one results in a requirement of less of the other, here Defendants' failures fall into both procedural and substantive categories. Procedurally, the failure to serve an opposition brief in accordance with a court order might seem small, but it is less so when considering the repeated nature of the failure. Substantively, there is a trail of deficiency in discovery that, while occasionally responsive to lesser sanctions, has continued to be half-hearted or lackluster over time and resulted in a slow escalation of sanctions. Twinned together, these procedural and substantive failures now warrant the relief Plaintiff is seeking: termination – particularly in the context of the scope of the overall lawsuit, which is a landlord-tenant dispute about a hot dog stand.

With regard to termination, the Court is mindful that there are presently already some evidentiary sanctions in place. In making the leap to terminating sanctions, harsh as it is, the Court will make certain modifications to the relief Plaintiffs are requesting in order to avoid some of the more draconian impacts of termination and/or the risk of manifest injustice. Specifically, Plaintiff requests that the Court: --strike Defendants' Answer --strike Defendants' Cross-Complaint --render Judgment by Default against Defendants --award monetary sanctions in the amount of $4,680.00 (ROA 254, pp. 1:27-2:2.) The Court will grant the motion as to striking the Cross-Complaint. The Court will also grant the motion as to striking the Answer, which will leave Defendants without a responsive pleading and subject to entry of default. However, the Court will not automatically default Defendants or enter Judgment by Default. Instead, Plaintiffs will have to request entry of default using the formal Request for Entry of Default form. (See California Judicial Council Form CIV-100.) Thereafter, Plaintiffs will need to proceed via the default prove-up process. By requiring Plaintiffs to follow this formal process, concerns regarding a draconian or unjust result will be alleviated in that Plaintiffs will still have to produce basic evidence to support the prove-up of their claims. Additionally, as this Court previously noted (see ROA 237, p. 3), when travelling along the spectrum of sanctions, beginning with lesser sanctions and potentially ending with the strongest sanctions, the Court is not inclined to twin multiple sanctions together – i.e. if Plaintiff is winning the strongest sanction of termination, additional monetary sanctions for the trouble of bringing the motion to obtain those sanctions is unnecessary and has a bit of a 'pile on' effect. As such, to the extent that a terminating sanction is harsh enough, the Court will also decline to award the monetary sanctions being requested on grounds that other circumstances make the imposition of an additional monetary sanction unjust at this time.

Unless the ruling(s) above indicate that an appearance is necessary, parties who wish to submit, who are satisfied with the above tentative ruling(s), and/or who do not otherwise wish to argue the motion(s) are encouraged to give notice to the Court and each other of their intention not to appear.

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