Judge: Michael E. Whitaker, Case: 22SMCV01270, Date: 2024-02-15 Tentative Ruling

Case Number: 22SMCV01270    Hearing Date: February 15, 2024    Dept: 207

TENTATIVE RULING

MOTION

            This case arises from a dispute involving Plaintiff Ryan Macdhubhain’s (“Plaintiff”) employment termination.  Plaintiff contends, among other things, that pursuant to a December 2019 letter agreement, Defendants Advanced Nutrients, Inc.; Advanced Nutrients US, LLC; and Michael Straumietis (“Defendants”) agreed that in the event they terminated Plaintiff’s employment without cause before the end of 2022, Defendants would pay Plaintiff an additional 6 months of salary plus commission.  But Defendants failed to pay Plaintiff that amount when they terminated him without cause in May of 2022.  (Complaint ¶¶ 8, 19, 25.)

Defendants move for terminating and monetary sanctions against Plaintiff for repeatedly producing and presenting an altered version of the December 2019 letter agreement.  Plaintiff opposes and Defendants reply. 

LEGAL STANDARDS

When a party misuses the discovery process, the court in its discretion may impose sanction.  (See generally Code Civ. Proc., §§ 2023.010, 2023.030.)  Misuses of the discovery process include, but are not limited to:

(a) Persisting, over objection and without substantial justification, in an attempt to obtain information or materials that are outside the scope of permissible discovery.

(b) Using a discovery method in a manner that does not comply with its specified procedures.

(c) Employing a discovery method in a manner or to an extent that causes unwarranted annoyance, embarrassment, or oppression, or undue burden and expense.

(d) Failing to respond or to submit to an authorized method of discovery.

(e) Making, without substantial justification, an unmeritorious objection to discovery.

(f) Making an evasive response to discovery.

(g) Disobeying a court order to provide discovery.

(h) Making or opposing, unsuccessfully and without substantial justification, a motion to compel or to limit discovery.

(i) Failing to confer in person, by telephone, or by letter with an opposing party or attorney in a reasonable and good faith attempt to resolve informally any dispute concerning discovery, if the section governing a particular discovery motion requires the filing of a declaration stating facts showing that an attempt at informal resolution has been made.

(Code Civ. Proc., § 2023.010.)

California discovery law authorizes a range of penalties for a party's refusal to obey a discovery order, including monetary sanctions, evidentiary sanctions, issue sanctions, and terminating sanctions. A court has broad discretion in selecting the appropriate penalty, . . . . Despite this broad discretion, the courts have long recognized that the terminating sanction is a drastic penalty and should be used sparingly. A trial court must be cautious when imposing a terminating sanction because the sanction eliminates a party's fundamental right to a trial, thus implicating due process rights. The trial court should select a sanction that is tailored to the harm caused by the withheld discovery. Sanctions should be appropriate to the dereliction, and should not exceed that which is required to protect the interests of the party entitled to but denied discovery.

(Lopez v. Watchtower Bible & Tract Society of New York, Inc. (2016) 246 Cal.App.4th 566, 604 [cleaned up].)

When a party fails to respond to the opposing party's interrogatories, the court should begin by imposing monetary sanctions and ordering the party to respond. If a party then fails to obey an order compelling answers, the court may make those orders that are just, including the imposition of an issue sanction, an evidence sanction, or a terminating sanction.  In general, a court may not impose issue, evidence, or terminating sanctions unless a party disobeys a court order. 

(Moofly Productions, LLC v. Favila (2020) 46 CalApp.5th 1, 11 [cleaned up] [citing Code Civ. Proc., § 2030.290, subd. (c)].)  However, “a terminating sanction issued solely because of a failure to pay a monetary discovery sanction is never justified.” (Newland v. Superior Court (1995) 40 Cal.App.4th 608, 615.)

FACTUAL BACKGROUND

            Plaintiff filed his complaint in this matter on August 2, 2022.  Paragraph 8 of the Complaint indicates that Defendant Straumietis sent Plaintiff a December 10, 2019 letter agreement, indicating that in the event Plaintiff’s employment is terminated without cause prior to the end of 2022, Defendants will pay Plaintiff an additional 6 months’ salary and commission.  (Complaint ¶ 8.)  Although paragraph 8 of the complaint indicates a true and correct copy of the December 10, 2019 letter agreement is attached to the complaint as Exhibit A, the version of the complaint that was filed with the Court does not contain any attachments.  (See Complaint.)  Defendant contends that the version of the complaint it received did contain an Exhibit A, bearing a DocuSign ID beginning with 13B0F.  (Scala Decl. ¶ 2 and Ex. A.) 

            On November 9, 2022, Plaintiff filed an application for right to attach order and writ of attachment.  In support of that application, Plaintiff filed a declaration, indicating that Defendant Straumietis sent Plaintiff the December 19, 2019 letter agreement, a true and correct copy of which was purportedly attached to Plaintiff’s declaration as Exhibit A.  (Macdhubhain Decl. ¶ 3.)  The letter agreement attached as Exhibit A to the Macdhubhain Declaration bore the same DocuSign ID beginning with 13B0F.  (Macdhubhain Decl. ¶ 3 and Ex A.)

            In a verified response to Defendants’ request for production of documents, Plaintiff produced as MAC000003 a copy of the letter agreement bearing the same DocuSign ID beginning with 13B0F.  (Scala Decl. ¶¶ 5-6 and Exs. D-E.)  Defendants did not produce a copy of the letter agreement in discovery, indicating that they could not locate it in Plaintiff’s personnel file.  (Motion at p. 1:8-10.)

            At Plaintiff’s July 17, 2023 deposition, when questioned about the letter agreement, Plaintiff testified that Defendant Straumietis held a meeting with about 12-15 people, where he had Melissa Jordan hand out letter agreements to each member of the sales team, including Plaintiff, to assuage their concerns about the security of their job positions.  (Scala Decl. ¶ 7 and Ex. F)  Plaintiff further testified that he and all the other members of the sales team signed the agreements, then handed them back in to Melissa Jordan.  (Ibid.)  When asked how Plaintiff obtained a copy of the letter agreement, he indicated “I believe we got this as a copy when we were there.  I asked for it.  Yeah, a digital copy.”  (Ibid.)

            Two days later, at the deposition of Kennedy Tran, another former employee of Defendants, who also brought suit against Defendants, and who is also represented by Plaintiff’s counsel, Defendants’ counsel noticed that Kennedy Tran’s letter agreement bore the exact same DocuSign ID beginning with 13B0F.  (Scala Decl. ¶ 8 and Ex. G.)

            Subsequently, Defendants searched its DocuSign archives and found Plaintiff’s actual letter agreement, bearing a DocuSign ID beginning with 137D4 (Scala Decl. ¶ 8 (second)[1] and Ex. H.)  Defendants also found Kennedy Tran’s actual letter agreement, bearing a DocuSign ID beginning with 96F44.  (Scala Decl. ¶ 8 (second) and Ex. J.)  Defendants discovered the DocuSign ID beginning with 13B0F actually pertained to Melissa Jordan’s letter agreement.  (Scala Decl. ¶ 8 (second) and Ex. I.)  Melissa Jordan’s employment was terminated in February 2022 – three months prior to Plaintiff’s.  (Scala Decl. ¶ 12 and Ex. N.)  The substance of the three letter agreements is identical, except for the name of the letter recipient and the signatures.

            When confronted about the altered letter agreement bearing DocuSign ID beginning with 13B0F that Plaintiff had previously held out as a true and correct copy of Plaintiff’s letter agreement, Plaintiff’s counsel indicated that Plaintiff received the altered letter agreement from Melissa Jordan, and provided Defendants’ counsel with copies of the emails Melissa Jordan had sent to Kennedy Tran and to Plaintiff, containing the already-altered letter agreements.  (Scala Decl. ¶ 9 and Ex. K.)

            In supplemental discovery responses, Plaintiff admitted he received the altered letter agreement from Melissa Jordan on May 12, 2022.  (Scala Decl. ¶¶ 10-11 and Exs. L-M.)

            Defendants subsequently demanded a forensic inspection of Plaintiff’s cell phone, in an attempt to determine whether Plaintiff was involved in altering the letter agreement.  (Scala Decl. ¶ 15.)  The parties agreed to a protocol for the forensic analysis, but to date, Plaintiff has refused to retain a forensic analyst, pursuant to the agreement.  (Ibid.)

ANALYSIS

            Defendants contend that Plaintiff’s provision of altered evidence constitutes a misuse of the discovery process, pursuant to Code of Civil Procedure section 2023.010, warranting terminating and/or monetary sanctions pursuant to Code of Civil Procedure section 2023.030.  Plaintiff contends that the real misuse of the discovery process is Defendants’ failure to produce the real letter agreement, and requests monetary sanctions against Defendants.  Plaintiff also argues that Plaintiff, in good faith, obtained and relied upon what turned out to be an altered letter agreement from Melissa Jordan.  Defendant counters that Plaintiff’s changing testimony regarding the source of the altered letter agreement and the fact that Melissa Jordan emailed Plaintiff the letter agreement three months after her own termination (when she would no longer have had access to company files) demonstrate Plaintiff knowingly or at least negligently produced a false and altered copy of the letter agreement. 

Defendants rely on Code of Civil Procedure sections 2023.010 and 2023.030 as authority for their request.  However, “Section 2023.030 does not independently authorize the court to impose sanctions for discovery misconduct.”  (City of Los Angeles v. PricewaterhouseCoopers, LLC (2022) 84 Cal.App.5th 466, 502.)  Rather, “Section 2023.030 describes the types of sanctions available under the Discovery Act when another provision authorizes a particular sanction.”  (Ibid.)

Moreover, “[u]nlike provisions of the Discovery Act which expressly direct the court to impose specific types of sanctions under specific circumstances, there is no language in section 2023.010 stating that the court may impose a sanction under chapter 7 or stating the type of sanction to impose.”  (City of Los Angeles, supra, 84 Cal.App.5th at p. 500)  “Instead, each of the categories of misconduct listed in section 2023.010 are managed through the procedures set forth in the chapters governing the discovery methods, as well as the other provisions of the Discovery Act that regulate and sanction misconduct.”  (Ibid.)

            Here, Defendants do not cite to or rely on any other provision of the Discovery Act authorizing the Court to impose sanctions.  Similarly, Plaintiff does not cite to any authority in support of his request “that Defendants be subject to monetary sanctions, an amount to be determined upon request by the Court.” (Opp. at p. 9.)

CONCLUSION AND ORDER

Because neither Defendants nor Plaintiff have provided statutory authority authorizing the Court to impose the requested sanctions, the Court denies Defendants’ motion for terminating and monetary sanctions.  The Court similarly denies Plaintiff’s request for monetary sanctions. 

Defendants shall provide notice of the Court’s ruling and file a proof of service of such.

DATED:  February 15, 2024                         ________________________________

                                                                        Michael E. Whitaker

                                                                        Judge of the Superior Court