Judge: Monica Bachner, Case: 20STCV08887, Date: 2022-09-16 Tentative Ruling

Case Number: 20STCV08887    Hearing Date: September 16, 2022    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Plaintiff’s unopposed motion to compel third-party 535 Chalette Drive LLC to comply with a subpoena to produce business records is granted. Plaintiff’s request that the Court order Chalette is to designate a person most knowledgeable and custodian of records pursuant to the Court’s February 8, 2022 Order is granted.

Plaintiff’s unopposed request for sanctions against 535 Chalette Drive LLC and Defendant’s counsel Behrouz Shafie is denied.

Plaintiff Ascentium Capital, LLC (“Plaintiff”) moves for an order compelling nonparty 535 Chalette Drive LLC (“Chalette”) to comply with the Civil Subpoena (Duces Tecum) (the “Subpoena”) served on it in connection with the third-party debtor’s examination.  (Notice of Motion, pg. 1.)  Plaintiff also moves for an order that Chalette designate a knowledgeable witness and custodian of records pursuant to its obligation under the Court’s February 8, 2022 Order for Appearance and Examination (“ORAP”).  (Notice of Motion, pgs. 1-2.)  Plaintiff further requests an award of monetary sanctions jointly against  Chalette and Behrouz Shafie (“Shafie”), counsel for Defendant and judgment debtor, in the amount of $14,559.59, pursuant to C.C.P. §2023.010.  (Notice of Motion, pg. 2.)

Background

On November 16, 2021, this Court entered judgment against Defendant Kamran Broukhim (“Defendant”). On February 11, 2022, Plaintiff served Chalette with the Subpoena in connection with a third-party debtor’s examination relating to the judgment against Defendant.  (Motion, pg. 1, Decl. of Overs ¶3, Exh. B [Subpoena].)  After failing to appear twice, Defendant appeared on behalf of Chalette, but did not produce any documents in response to the Subpoena and did not possess adequate knowledge to testify as to Chalette’s assets and/or debts.  (Motion, pg. 1, Decl. of Overs ¶¶9-21.)  On May 6, 2022, Plaintiff filed the instant motion to compel Chalette to produce the requested documents and designate a witness and custodian of records with sufficient knowledge of Chalette’s assets and debts.  (Motion, pg. 2.)  No opposition to the motion has been filed. 

Motion to Compel

          “[C.C.P.] section 708.120 limits third party discovery in judgment enforcement proceedings to questions pertaining to the third party’s control or possession of ‘property in which the judgment debtor has an interest’ or money ‘owe[d] [to] the judgment debtor.’” (Finance Holding Co. LLC v. The American Institute of Certified Tax Coaches, Inc. (2018) 29 Cal.App.5th 663, 681.) “Under section 708.120, a creditor is entitled to examine a third party if it convinces the court that the ‘third person has possession or control of property in which the judgment debtor has an interest or is indebted to the judgment debtor.’ If this showing is made, ‘the court shall make an order directing the third person to appear... to answer concerning such property or debt.’ Under its plain meaning, this statutory language provides the trial court with the authority to permit a creditor to seek information regarding the existence of the debtor’s property in the third party’s possession and/or a debt owed to the debtor. A third-party document subpoena must therefore be limited to ‘confirm[ing] the existence of the subject property [and/or] debt.’” (Id. at 682.)

           Plaintiff served Chalette with the Subpoena that sought 23 categories of documents and records regarding Chalette’s assets belonging to Defendant and its debts owed to Defendant, summarized as the following:

• Requests Nos. 1-6: Documents and records relating to Chalette’s bank accounts, financial records, assets, and the individual or entities that own Chalette;

• Requests Nos. 7-8: Chalette’s Operating Agreements and documents to identify its Manager;

• Requests Nos. 9; 11: Documents and records concerning Defendant’s ownership in Chalette and any funds transferred from 535 Chalette to Defendant; and

• Requests Nos. 10; 12-23: Documents and records regarding Chalette’s sale of the Property, including its transfer from the Trust to Chalette, the subsequent sale of the Property, any disbursements to Defendant and Minoo Broukhim, and any communications regarding the Property to avoid Defendant’s judgment.

(Motion, pgs. 4-5; Decl. of Overs, Exh. B.) 

At the April 12, 2022, debtor’s examination, Defendant disclaimed possessing any meaningful information as to Chalette’s assets and/or debts and instead testified that Chalette’s other members, including Minoo Broukhim, “owned” and “managed” Chalette’s business operations.  (Motion, pg. 3, Decl. of Overs ¶¶14-15, Exh. D at 16:8, 18:19-19:6, 23:7-12, 28:14-19.)  Defendant also indicated that his two adult children, Robert and Michael Broukhim, were also members of Chalette and had more familiarity and knowledge of its business operations than Defendant.  (Motion, pg. 3, Decl. of Overs ¶15, Exh. D at 28:14-19, 30:6-9.)  While Defendant confirmed that Chalette received “millions” after selling the property to a third-party, Defendant denied having any other knowledge as to the sale of the property or to Chalette’s disbursements of such revenue, and that his dealings were at the direction of Minoo, Robert, and Michael.  (Motion pg. 3, Decl. of Overs ¶17, Exh. D at 16:14-17:19, 18:5-10, 33:10-19.)

Plaintiff argues that, given Defendant’s designation as Chalette’s Manager and his property transfer to Chalette for free, Defendant almost certainly has an ownership interest in Chalette.  (Motion, pg. 5; Decl. of Overs, Exh. E.)  Plaintiff argues that it is entitled to documents sought in the Subpoena because they relate to “‘the existence of [Defendant’s] property in [Chalette’s] possession and/or a debt owed to [Defendant] such as Defendant’s ownership of [Chalette] and any disbursements he may have received from [Chalette].” (Memorandum, pg. 5.) 

          Plaintiff further requests the Court order Chalette to comply with the Subpoena by designating a knowledgeable witness and custodian of records.  (Motion, pg. 6.)  Plaintiff asserts that at the April 12, 2022 debtor’s examination, Defendant failed to meaningfully answer and questions relating to Chalette’s properties and debts.  (Motion, pg. 6.)  However, Defendant did identify potential witnesses for Chalette with sufficient knowledge of and familiarity with Chalette’s business operation and its sale of the property, including Minoo, Robert, and Michael Broukhim.  (Motion, pg. 6; Decl. of Overs, Exh. D at 18:19-19:6; 28:14-19; 28:18-19; 30:6-9.)

          Plaintiff is entitled to an order compelling Chalette’s compliance with the deposition subpoena.  (See Shrewsbury Management, Inc. v. Superior Court (2019) 32 Cal.App.5th 1213, 1228; Finance Holding Co. LLC v. The American Institute of Certified Tax Coaches, Inc. (2018) 29 Cal.App.5th 663, 681-682.)  Plaintiff submitted evidence suggesting that Defendant’s testimony at the April 12, 2022, examination was unresponsive to the Subpoena and Defendant did not produce documents in Chalette’s possession responsive to the Subpoena.  (Decl. of Overs ¶¶20-21.)  Plaintiff also submitted evidence that it attempted to meet and confer with Chalette to no avail.  (Decl. of Overs ¶ 22.)  To the extent Chalette has not produced all responsive documents to the business records subpoena, it is ordered to do so.  Further, Chalette is ordered to designate a knowledgeable witness and custodian of records for deposition. (See Finance Holding Co. LLC, 29 Cal.App.5th at 682.)

          Based on the foregoing, Plaintiff’s unopposed motion to compel compliance with the deposition subpoena is granted.

Request for Sanctions

Plaintiff requests monetary sanctions against Chalette and Shafie for Chalette’s alleged misuse of the discovery process, including failing to respond to discovery, making evasive responses to discovery, and failing to meet and confer based on Chalette’s conduct at the April 12, 2022 third-party debtor examination during which Shafie explained Chalette’s other members refused to provide documents, which Plaintiff asserts amounts to a refusal to engage in discovery.  (Motion, pgs. 6-7; C.C.P. §2023.010.)  Plaintiff’s motion does not properly cite to statutory authority providing for an award of monetary sanctions against a nonparty deponent who fails to respond/produce documents in a deposition, as the Notice of Motion only cites C.C.P. §2023.010 in support of the sanctions request, and accordingly, the Notice of Motion failed to properly give Chalette and/or Shafie notice of the statutory basis for the requested monetary sanctions. 

Based on the foregoing, Plaintiff’s request for monetary sanctions is denied.

Dated:  September _____, 2022

Hon. Monica Bachner

Judge of the Superior Court