Judge: Robert B. Broadbelt, Case: 19STCV22996, Date: 2024-02-09 Tentative Ruling

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Case Number: 19STCV22996    Hearing Date: February 9, 2024    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTIES:             Plaintiffs Paul Schenly and Annette Schenley

RESPONDING PARTY:       Defendant Renee Cohen

(1)   Motion for Discovery Sanctions or, in the Alternative, a Protective Order

MOVING PARTY:                 Defendant Renee Cohen        

RESPONDING PARTIES:    Plaintiffs Paul Schenly and Annette Schenley

(2)   Motion to Continue Trial and Reopen Discovery

The court considered the moving, opposition, and reply papers filed in connection with each motion.

BACKGROUND

Plaintiffs Paul Schenly and Annette Schenley (“Plaintiffs”) filed this action against Renee Cohen (“Defendant”) on June 28, 2019, alleging nine causes of action for (1) breach of fiduciary duty; (2) breach of fiduciary duty of loyalty; (3) breach of fiduciary duty of confidentiality;         (4) constructive fraud; (5) financial abuse of an elder and/or dependent adult; (6) financial abuse of an elder and/or dependent adult; (7) conversion; (8) accounting; and (9) treble damages pursuant to Penal Code section 496.

Now pending before the court are two motions: (1) Plaintiffs’ motion for discovery sanctions or, alternatively, for a protective order, and (2) Defendant’s motion to continue trial and reopen discovery.

PLAINTIFFS’ MOTION FOR SANCTIONS OR A PROTECTIVE ORDER

Plaintiffs move the court for an order prohibiting Defendant from introducing the following evidence at trial: (1) bank records related to transactions that were not previously produced during discovery; (2) document(s) written by an unknown individual consisting of questions and answers regarding the unproduced records; and (3) testimony from any person intending to discuss those records. 

“The court may impose an evidence sanction by an order prohibiting any party engaging in the misuse of the discovery process from introducing designated matters in evidence.”  (Code Civ. Proc., § 2023.030, subd. (c).)  “A trial court has broad discretion to impose discovery sanctions, but they ‘ “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.” ’  [Citation.]  A discovery sanction should only be such as is ‘ “suitable and necessary to enable the party seeking discovery to obtain the objects of the discovery he needs,” ’ and may not be designed to impose punishment.”  (Manlin v. Milner (2022) 82 Cal.App.5th 1004, 1024 [internal citation omitted].)

Plaintiffs contend that Defendant failed to produce evidence in discovery that was in her control and that she was engaging in gamesmanship by concealing that evidence.  Plaintiffs have presented the following evidence in support of their motion.

Plaintiff Annette Schenley served Defendant with her Requests for Production of Documents on July 9, 2020.  (Chesney Decl., Ex. 3, Annette Schenley Requests for Production of Documents, p. 7 [proof of service].)  Defendant served responses on August 10, 2020.  (Chesney Decl., Ex. 4.)  Included therein was demand number 9, which requested the production of “ALL DOCUMENTS RELATING TO [Defendant’s] contention that [Defendant’s] three withdrawals, totaling $774,000 of JOINT ASSETS, from Wells Fargo account nos. 99724344154 and 9972434162, on or around July 1, 2010 were proper and/or authorized by PLAINTIFFS.”  (Chesney Decl., Ex. 3, Annette Schenley Requests for Production of Documents, p. 5:1-4.)  In response to that demand, Defendant (1) served objections, and (2) stated, without waiving those objections, that “the documents that are currently in [her] possession, relevant to this discovery request or are under [her] control are as follows: COH0005-0007.”  (Chesney Decl., Ex. 4, p. 7:9-19.)  Defendant served amended responses to certain of the Requests for Production of Documents on March 21, 2023, but she did not identify any additional documents responsive to demand number 9.  (Chesney Decl., Ex. 7, Def. Second Amended Responses, p. 7:9-19 [identifying responsive documents to be “COH0005-0007”].)

Similarly, on February 10, 2023, plaintiff Paul Schenly served Defendant with a Deposition Notice.  (Chesney Decl., Ex. 5.)  The Deposition Notice included document requests for similar documents (i.e., requests pertaining to documents regarding Defendant’s withdrawals).  (Id., pp. 4:26-4:28, 5:3-12.)  During her March 22, 2023 deposition, Defendant was asked to check if she had all responsive documents, to which she stated that she would “write th[at] down[.]”  (Chesney Decl., Ex. 2, Def. Dep., p. 53:15-21.)

Thereafter, Plaintiffs assert that, on the date of mediation, Defendant’s counsel claimed that Defendant had uncovered evidence that was probative to her defenses and provided that evidence to Plaintiffs’ counsel.  (Mot., p. 7:21-23; Holmes Decl., Ex. 11, p. 1 [letter from Plaintiffs’ counsel stating that certain documents were provided to counsel’s office on September 28, 2023, the day of mediation].)  Plaintiffs further state that it is their understanding that Defendant will introduce those documents at trial, which consist of Wells Fargo records related to the subject transactions, an annotated document authored by an unknown individual regarding those transactions, and testimony from a person discussing those records, all of which should have been but were not produced in discovery.

In opposition, Defendant argues that she did not make misrepresentations in her discovery responses because, “[s]o far as she knew, all documents” had been provided.  (Opp., p. 8:19-21.)   In her declaration, Defendant states the following: (1) in response to Plaintiffs’ claims, she “went to 2 branches of Wells Fargo bank in the San Fernando Valley and one in Los Angeles asking for assistance in locating the banking history of these funds[;]” (2) she was informed that there were no records “because the information was so old[;]” (3) in 2019, she moved to Orange County and visited two additional Wells Fargo branches; (4) she was informed, again, that there were no records because the transactions were too old; (5) in the summer of 2023, her daughter reminded her that a neighbor—Carina Lins (“Lins”)—worked at a Wells Fargo bank and could potentially assist Defendant in locating the relevant documents; (6) after several weeks, Lins (i) informed Defendant that she was successful in locating the documents, (ii) met with Defendant to complete the tracing of the $500,000 transaction, and (iii) provided those documents to Defendant; and (7) Defendant thereafter provided those documents to her attorney, and she authorized him to produce them to Plaintiffs.  (Cohen Decl., ¶¶ 4-8.)  Defendant’s counsel produced the documents to Plaintiffs’ counsel for the first time at mediation.  (Waecker Decl., ¶ 8.) 

At the time that Plaintiffs filed the pending motion, Defendant had not served Plaintiffs with copies of the subject documents in discovery.  (Holmes Decl., ¶ 4.)  The court notes that     (1) Defendant’s counsel asserted, in support of Defendant’s opposition, that counsel would “be serving Plaintiffs with the documents at issue in the instant motion contemporaneously with the filing of this opposition as verified discovery responses, and no later than the hearing date for this motion,” and (2) Plaintiffs’ reply papers do not appear to dispute that Defendant has since produced those documents.  (Becker Decl., ¶ 4; Reply, p. 3, fn. 1 [“on the afternoon of January 29, 2024, defense counsel finally produced copies of the ‘new’ evidence, styled as a supplemental response” to demand number 9] [emphasis omitted].)

After considering the evidence and arguments submitted by the parties, the court finds that Plaintiffs have shown that Defendant has engaged in a misuse of the discovery process and that the court should exercise its discretion to impose evidence sanctions against Defendant.  (Code Civ. Proc., §§ 2023.030, subd. (c), 2023.010, subd. (d).)

First, as set forth above, Plaintiffs served discovery on Defendant demanding the production of documents relating to Defendant’s contention that her withdrawals from certain Wells Fargo accounts were proper or authorized by Plaintiffs.  (Chesney Decl., Ex. 3, Annette Schenley Requests for Production of Documents, p. 5:1-4.)  Although Defendant contends that she was diligent in obtaining all documents responsive to this request—including the documents that were produced to Plaintiffs’ counsel on the date of mediation—the court disagrees.  Defendant’s declaration states, in vague and conclusory fashion, that she visited five Wells Fargo banks “asking for assistance in locating the banking history of these funds” and was informed that no records could be found.  (Cohen Decl., ¶¶ 4-5.)  But Defendant did not (1) identify the persons she spoke to on those occasions; (2) present evidence showing that she made written requests for this information; or (3) present evidence showing that she followed up on her oral requests to the unidentified Wells Fargo employees.  (Ibid.)  Thus, the court finds that Defendant has not established that she was diligent in obtaining these records, which were in her control.[1]

Second, the evidence supports a finding that Defendant intentionally withheld the documents from Plaintiffs for at least two months.

Defendant’s declaration does not state the exact date on which she received the subject documents.  Rather, Defendant has stated only that she was reminded that her daughter’s neighbor (i.e., Lins) worked at Wells Fargo in “the summer of 2023[,]” made an appointment with Lins at some unspecified time, and, “[a]fter several weeks,” Lins informed Defendant that she was able to locate documents and met with Defendant to complete the tracing of the $500,000 transaction.  (Cohen Decl., ¶¶ 6-8.)  The evidence establishes that Defendant was in possession of these documents by no later than August 2023.  (Waecker Decl., ¶ 7 [“In or around August of 2024 [sic],[2] [Defendant] provided me with three pages missing from a previously partially-produced Wells Fargo bank documents”].) 

Despite possessing these documents since August 2023, Defendant (1) did not supplement her previous discovery responses or inform Plaintiffs’ counsel of her discovery, and (2) elected to withhold those documents until the parties engaged in mediation nearly two months later, on September 28, 2023.  (Waecker Decl., ¶ 8 [“These additional documents were reviewed and exchanged at the mediation”].)  Defendant concedes that her counsel “chose to disclose the documents to Plaintiff[s] for the first time at the mediation for the purposes of eliminating [or] reducing the $500,000.00 claim.”  (Opp., p. 4:13-14 [emphasis added].)  Moreover, it appears that Defendant approved this act, since she stated in her declaration that they “had scheduled a Mediation to occur at the end of September 2023 and [she] authorized [counsel] to produce [the subject documents] to the Plaintiffs in an effort to resolve this claim.”  (Cohen Decl., ¶ 9.)

Third, Defendant did not produce the documents to Plaintiffs in discovery until January 29, 2024, which was also after the close of discovery.[3]

            “The purpose of discovery is to make trial ‘ “less a game of blindman’s bluff and more a fair contest with the basic issues and facts disclosed to the fullest practicable extent.” ’”  (Reales Investment, LLC v. Johnson (2020) 55 Cal.App.5th 463, 473; Manlin, supra, 82 Cal.App.5th at p. 1025 [“The object of discovery is to prevent surprise at trial”].)  The court finds that, by          failing to promptly obtain and disclose evidence requested by Plaintiffs, Defendant was engaging in gamesmanship and engaging in conduct that is a misuse of the discovery process.  (Code Civ. Proc., §§ 2030.030, subd. (c), 2023.010, subd. (d) [it is a misuse of the discovery process to “[f]ail[] to respond or to submit to an authorized method of discovery”].)

            The court finds that, in order to remedy the prejudice suffered by Plaintiffs as a result of Defendant’s conduct, evidence sanctions are warranted.  (Code Civ. Proc., § 2023.030, subd. (c); Manlin, supra, 82 Cal.App.5th at p. 1024.) 

The court therefore grants Plaintiffs’ motion and makes the orders set forth below.

DEFENDANT’S MOTION TO CONTINUE TRIAL AND REOPEN DISCOVERY

Defendant moves the court for an order (1) continuing trial, which is currently scheduled for April 17, 2024, and (2) reopening discovery.

First, the court finds that Defendant has not met her burden to show good cause to continue trial because (1) Defendant has not shown that she was diligent in attempting to obtain the discovery that she described in her motion, (2) Plaintiffs would be unduly prejudiced by the continuance, and (3) the interests of justice are not best served by a continuance.  (Cal. Rules of Ct., 3.1332, subd. (c) [“The court may grant a continuance only on an affirmative showing of good cause requiring the continuance”]; Cal. Rules of Ct., rule 3.1332, subds. (c)(6), (d)(5), (d)(10).)  The court therefore denies Defendant’s request for a trial continuance.

Second, the court finds that Defendant has not met her burden to show that the court should exercise its discretion to reopen discovery.

“On motion of any party, the court may grant leave . . . to reopen discovery after a new trial date has been set.”  (Code Civ. Proc., § 2024.050, subd. (a).)  In exercising its discretion to grant or deny a motion to reopen discovery, the court shall take into consideration any matter relevant to the leave requested, including the factors set forth by Code of Civil Procedure section 2024.050.  (Code Civ. Proc., § 2024.050, subd. (b).)

This action was filed almost five years ago, on June 28, 2019.  As set forth above, on July 25, 2023, the court continued trial in this action and ordered that “the discovery cut-off will remain fixed at July 24, 2023[.]”  (July 25, 2023 Order, p. 1:19-25.)  Trial is now set for April 17, 2024.  Defendant requests that the court reopen discovery so that she may conduct the deposition of plaintiff Paul Schenly and two other witnesses, conduct further discovery regarding new evidence (i.e., the documents at issue in Plaintiffs’ motion for sanctions), and issue additional subpoenas.  (Waecker Decl., ¶¶ 8-9, 13-14.)

After considering the factors set forth in Code of Civil Procedure section 2024.050, the court exercises its discretion to deny Defendant’s request to reopen discovery in this action.  (Code Civ. Proc., § 2024.050, subds. (a), (b).)  The court further finds that (1) Defendant has not shown diligence in seeking the discovery requested in this motion, and (2) permitting further discovery would result in prejudice to Plaintiffs.  (Code Civ. Proc., § 2024.050, subd. (b).)

The court grants Plaintiffs’ request for monetary sanctions against Defendant.  (Code Civ. Proc., § 2024.050, subd. (c).)  The court finds that $4,616.30 ((3 hours x Holmes’s $630 hourly rate) + (5 hours x Chesney’s $540 hourly rate) + $26.30 in filing costs) is a reasonable amount of sanctions to impose against Defendant in connection with this motion.  (Holmes Decl., ¶¶ 23, 26, 28-29.)

ORDER

The court grants plaintiffs Paul Schenly and Annette Schenley’s motion for sanctions or, in the alternative, for a protective order as follows.

The court orders that defendant Renee Cohen is prohibited from introducing in evidence (1) the three pages of Wells Fargo bank records that defendant Renee Cohen provided to her former attorney, Mark Waecker, in or around August 2023 (as referenced in paragraph 7 of the declaration of Mark Waecker filed on January 29, 2024) and that defendant Renee Cohen produced to plaintiffs Paul Schenly and Annette Schenley after the July 24, 2023 discovery cutoff in this action, and (2) any testimony regarding those records.  (Code Civ. Proc., § 2023.030, subd. (c).)

The court denies defendant Renee Cohen’s motion to continue trial and reopen discovery.

The court orders defendant Renee Cohen to pay monetary sanctions to Paul Schenly and Annette Schenley in the amount of $4,616.30 within 30 days of the date of service of this order.

The court orders Paul Schenly and Annette Schenley to give notice of this ruling.

IT IS SO ORDERED.

DATED:  February 9, 2024

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court