Judge: Michael Shultz, Case: 24STCP00215, Date: 2025-01-03 Tentative Ruling

DEPARTMENT 40 - JUDGE ANNE RICHARDSON - LAW AND MOTION RULINGS
The Court issues tentative rulings on certain motions.The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) email Dept 40 by 8:30 a.m. on the day of the hearing (smcdept40@lacourt.org) with a copy to the other party(ies) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no email is necessary and all parties should appear at the hearing in person or by Court Call. 

Case Number: 24STCP00215    Hearing Date: January 3, 2025    Dept: 40

24STCP00215 Shareholder Representative Services, LLP V. SSCA, Inc.

Friday, January 3, 2025

[TENTATIVE] ORDER GRANTING PETITIONER’S MOTION FOR ISSUANCE OF AN ORDER TO SHOW CAUSE AS TO WHY RESPONDENT AND ITS COUNSEL SHOULD NOT BE HELD IN CONTEMPT AND SANCTIONED FOR RESPONDENT’S ONGOING VIOLATION OF THIS COURT’S ORDER

                                                  I.          BACKGROUND

Petitioner obtained a subpoena issued by a Delaware court in Shareholder Representative Services, LLC v. Nestl USA, Inc. (Case No. 2023-0498-SKR), an action to recover certain payments that Respondent allegedly failed to pay to the security holders of Freshly, Inc. Petitioner issued a subpoena in the Delaware action for production of documents pertaining to communications regarding the Delaware action, certain contracts and agreements and payments received  which Respondent refused to produce on grounds of privilege, relevance, and overbreadth. Petitioner commenced this action to enforce the subpoena issued in the Delaware action. (Pet. 1/19/24.)

On September 30, 2024, the Hon. Anne Richardson granted Petitioner’s motion to enforce the Delaware subpoena and compelled Respondent to provide further responses and production of documents within 30 days of the court’s ruling. (M.O. 9/30/24.)

                                                   II.         ARGUMENTS

Petitioner moves for an order to show cause why Respondent, Spencer/ShenkCapers & Associates (“Respondent”), should not be held in contempt and sanctioned for Respondent’s failure to comply with Judge Richardson’s order to provide further responses to the subpoena and to produce documents. Petitioner argues that Respondent produced documents on October 30, 2034, but the production did not fully comply with the scope of the subpoena.

Petitioner has met and conferred with Respondent to offer any reasonable accommodation necessary to facilitate production of documents because Respondent’s counsel, Polina Ross, was recovering from illness and surgeries. Respondent’s counsel refused to transition this matter to another attorney and declared herself “unavailable” to participate in discovery, ex parte applications, motions, or other proceedings until January 2, 2025, which violates Judge Richardson’s order. (Chessari decl., Ex. 2, 3.) Petitioner is aware from public records that Ms. Ross continues to sign and file her own motions, supporting declarations, and briefs in other matters since November 14, 2024. (Chessari decl., ¶ 19, Ex. 4.)

On December 19, 2024, the court granted Petitioner’s ex parte application to advance the hearing on this motion, previously set for March 27, 2025. (M.O. 12/19/24.) Petitioner served Respondent with the court’s order on December 20, 2024.  Ms. Ross stated she would not appear at the hearing on this motion. (Chessari decl., Ex. 7.) Petitioner requests an award for reasonable fees and costs to prepare this motion.

Respondent did not file an opposition.  

                                                         III.        DISCUSSION

In matters of indirect contempt, the court may issue a warrant of commitment upon an order to show cause. (Code Civ. Proc., § 1212.) After notice to the opposing party’s counsel, and if the court is satisfied with the sufficiency of the affidavit, the court “must sign an order to show cause re contempt in which the date and time for a hearing are set forth. (§ 1212; Arthur v. Superior Court (1965) 62 Cal.2d 404, 408, [‘an order to show cause must be issued’]; Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 1999) § 9:715, p. 9(II)–47.) The order to show cause acts as a summons to appear in court on a certain day and, as its name suggests, to show cause why a certain thing should not be done." (Cedars-Sinai Imaging Medical Group v. Superior Court (2000) 83 Cal.App.4th 1281, 1286.)

“Disobedience of any lawful judgment, order, or process of the court” is punishable by contempt. The court determines four issues in a contempt proceeding: "(1) the rendition of a valid order, (2) actual knowledge of the order, (3) ability to comply, and (4) willful disobedience." (Van v. LanguageLine Solutions (2017) 8 Cal.App.5th 73, 81.) As the contempt proceeding is quasi-criminal in nature, guilt must be established beyond a reasonable doubt. (Conn v. Superior Court (1987) 196 Cal.App.3d 774, 784; Code Civ. Proc., § 1209(a)(5).)

Moving party must prove the existence of a “valid court order, the alleged contemner's knowledge of the order, and noncompliance. If the petitioner proves those elements beyond a reasonable doubt the violation is established. He or she need go no farther.” (Moss v. Superior Court (Ortiz) (1998) 17 Cal.4th 396, 428.)

Petitioner’s evidence demonstrates that Judge Richardson issued a valid order on September 30, 2024, requiring Respondent to respond to the subpoena and produce documents. (Chessari Affidavit, ¶ 12, Ex. 1.) Petitioner determined that Respondent’s production of documents on October 30, 2024, did not fully comply with the court’s order. (Id.,¶ 14.)  Petitioner met and conferred with Respondent’s counsel regarding its deficient responses on November 14, 2024, but Ms. Ross indicated she could not respond “until December.” (Id. ¶ 15-16, Ex. 2.)

Petitioner sent a further email on December 30, 2024, again raising the issue of Respondent’s non-compliance, however, Ms. Ross considered the email “incredibly inappropriate” given her illness but stated she would “review and get back to [Petitioner’s counsel] at the end of next week.” (Id. ¶ 21.) Respondent’s “Notice of Unavailability” demonstrates Respondent’s refusal to comply with Judge Richardson’s order. (Id. ¶ 25, Ex. 3.)

Accordingly, Petitioner has met its burden of establishing Respondent’s actual knowledge of Judge Richardson’s order, an ability to comply given Respondent’s partial compliance on October 30, 2024, and willful disobedience demonstrated by Respondent’s counsel’s unwillingness to meet and confer with Petitioner regarding its deficient responses and production, and by removing herself from further proceedings in this action without providing Petitioner with other counsel to facilitate compliance with Judge Richardson’s order. (Aff., Ex. 3.)

                                                 IV.        CONCLUSION

Based on the foregoing, Petitioner’s motion for an order to show cause why Respondent should not be held in contempt for failing to comply with Judge Richardson’s order is GRANTED.  The court sets an OSC: re Contempt for January 31, 2025, in Department 40 of the Stanley Mosk Courthouse at 9:30 a.m. 

Petitioner acknowledges that Respondent complied in part with Judge Richardson’s October 30, 2024, but did not fully comply with the court’s order. (Chessari decl., ¶ 14.) The Court strikes Petitioner’s proposed OSC filed December 19, 2024, finding that the proposed OSC is vague as to how Respondent failed to fully comply with Judge Richardson’s October 30, 2024, order.    In addition, Petitioner’s proposed order identifies the Honorable Sheldon Ronnie as the judge presiding.  This is inaccurate.  Petitioner is ordered to submit a proposed OSC curing the above defects and must list with specificity the portions of Judge Richardson’s order violated by Respondent that form the basis of contempt.  Once signed by the Court, Petitioner is ordered to serve the OSC on Respondent and file proof of service with the Court two court days before the hearing date. (Cedars-Sinai Imaging Medical Group v. Superior Court (2000) 83 Cal.App.4th 1281.)

The court defers Petitioner’s request for attorney’s fees until the time of the order to show cause hearing as attorney’s fees are permitted where any person is adjudged guilty of contempt. (Code Civ. Proc., § 1218 subd. (a).)