Judge Salvatore Sirna, Case 19PSCV00318 2023-04-17 Tentative Ruling

Judge: Salvatore Sirna, Case: 19PSCV00318, Date: 2023-04-17 Tentative Ruling

The Court may change tentative rulings at any time. Therefore, counsel are advised to check this website periodically to determine whether any changes or updates have been made to the tentative ruling. Counsel may submit on the tentative rulings by calling the clerk in Department G at (909) 802-1104 prior to 8:30 a.m. the morning of the hearing.

Case Number: 19PSCV00318 Hearing Date: April 17, 2023 Dept: G

Plaintiff Accu-Blend Corporation’s Motion for Terminating Sanctions, or in the Alternative, Evidentiary/Issue Sanctions

Respondent: NO OPPOSITION

TENTATIVE RULING

Plaintiff Accu-Blend Corporation’s Motion for Terminating Sanctions, or in the Alternative, Evidentiary/Issue Sanctions is GRANTED IN PART as to Defendants Henry James Shishido, Alona Lynn Shishido, H&S Mfg., Robert Fuentes, Desirae Fuentes, and Athena Marie Soto and DENIED IN PART as to Defendant Nicholas Shishido.

Terminating sanctions are imposed, Defendants Henry James Shishido, Alona Lynn Shishido, H&S Mfg., Robert Fuentes, Desirae Fuentes, and Athena Marie Soto’s Answer to Plaintiff’s First Amended Complaint is STRICKEN and DEFAULT is entered against Defendants as of this date.

BACKGROUND

This is an action arising from alleged fraud. Plaintiff Accu-Blend Corporation is in the business of manufacturing wax. Defendant Henry James Shishido (Henry Shishido) has served as Plaintiff’s daily operations manager since 2005. In January 2008, Plaintiff alleges Henry Shishido began replacing key personnel in Plaintiff’s accounting department, packaging and shipping department, and receiving department with individuals close to Henry Shishido. In particular, Plaintiff alleges Henry Shishido hired Defendant Alona Lynn Shishido (Alona Shishido), who was Henry Shishido’s wife, as bookkeeper and controller. Plaintiff alleges Henry Shishido then began stealing purchasing orders placed with Plaintiff by fulfilling orders under Henry Shishido’s name or under the name of Defendant H&S Mfg. (H&S), a sole proprietorship owned and operated by Henry Shishido.

In order to fulfill these orders, Henry Shishido allegedly utilized Plaintiff’s raw material, equipment, and labor. Henry Shishido would then package and ship the final products with the H&S logo and would collect payment on those orders. After Plaintiff conducted an audit, Plaintiff discovered a shortage of approximately $1,200,000 worth of raw materials.

On April 8, 2019, Plaintiff filed a complaint against Henry Shishido, Alona Shishido, H&S, and Does 1-50, alleging the following causes of action: (1) fraud, (2) conversion, (3) intentional interference with contract, (4) violation of Business and Professions Code section 17200, (5) conspiracy, (6) breach of fiduciary duty, and (7) constructive trust.

On August 12, 2019, Plaintiff filed a First Amended Complaint (FAC) against Henry Shishido, Alona Shishido, H&S, Robert Fuentes, Desirae Fuentes, Athena Marie Soto (Soto), and Does 1-20, alleging the same causes of action and additional causes of action for (7) violation of Business and Professions Code section 17044, (8) constructive trust, and (9) injunctive relief.

On September 27, 2019, Plaintiff amended the FAC to name Doe 2 as Defendant Nicolas James Shishido (Nicolas Shishido). On January 31, 2022, Plaintiff filed a motion to compel Henry Shishido, Alona Shishido, H&S, Robert Fuentes, Desirae Fuentes, and Soto to respond to requests for production of documents, form interrogatories, and special interrogatories. On February 22, the court denied Plaintiff’s motion on the ground that Plaintiff failed to provide proper notice.

On August 18, 2022, Plaintiff filed the following motions to compel: motion to compel responses to request for production of documents (against Henry and Alona Shishido), motion to compel responses to special interrogatories (against Henry Shishido, Alona Shishido, Robert Fuentes, Desirae Fuentes, Soto, and H&S), and a motion to compel responses to form interrogatories (against Henry Shishido, Alona Shishido, Robert Fuentes, Desirae Fuentes, Soto, and H&S). On September 27, the court granted Plaintiff’s motions to compel.

On September 15, 2022, Plaintiff filed a motion to deem admitted requests for admission against Henry Shishido, Alona Shishido, Robert Fuentes, Desirae Fuentes, and Soto. On October 10, the court granted Plaintiff’s motion.

On February 10, 2023, Plaintiff filed the present motion for terminating or evidentiary/issue sanctions. On March 10, Plaintiff filed a motion to deem requests for admission admitted and the court granted the motion on April 4.

A hearing on the present motion is set for April 17, 2023. A final status conference is also set for July 5 with a non-jury trial set to commence on July 18.

ANALYSIS

Plaintiff requested terminating sanctions or issue and evidentiary sanctions against Defendants on the grounds that Defendants have refused to provide discovery or comply with the court’s orders to compel. For the following reasons, the court GRANTS IN PART Plaintiff’s motion.

Legal Standard

The court may impose a monetary sanction, issue sanction, evidence sanction, terminating sanction, or contempt sanction on a party who engages in conduct that misuses the discovery process. (Code Civ. Proc., § 2023.030.) Misuse of the discovery process includes “[f]ailing to respond or to submit to an authorized method of discovery” and “[d]isobeying a court order to provide discovery.” (Code Civ. Proc., § 2023.010, subd. (d), (g).) Because the purpose of sanctions is remedial and not punitive, sanctions should “serve to remedy the harm caused to the party suffering the discovery misconduct.” (Kwan Software Engineering, Inc. v. Hennings (2020) 58 Cal.App.5th 57, 74.) “[A]bsent unusual circumstances, nonmonetary sanctions are¿warranted only if a party willfully fails to comply with a court order.” (Aghaian v. Minassian (2021) 64 Cal.App.5th 603, 618-619.) Terminating sanctions should only be ordered when there has been previous noncompliance and it appears a less severe sanction would not be effective. (Link v. Cater (1998) 60 Cal.App.4th 1315, 1326.)

Discussion

On April 10, 2020, Plaintiff first propounded written discovery on Defendants in the form of form interrogatories, special interrogatories, requests for admissions, and requests for production. (O’Connell Decl., ¶ 4.) After Defendants failed to respond, the court ordered Defendants to provide responses to the form interrogatories, special interrogatories, and requests for production within thirty (30) days of September 27, 2022, and imposed monetary sanctions. (O’Connell Decl., ¶ 5-8.) On October 10, the court granted Plaintiff’s motion to deem the first set of requests for admissions admitted and imposed monetary sanctions. (O’Connell Decl., ¶ 10-11.) On April 4, 2023, the court granted Plaintiff’s motion to deem the second set of requests for admissions admitted and imposed monetary sanctions. Despite the court’s previous order of September 27, 2022, Plaintiff did not receive any response to Plaintiff’s written discovery requests. (O’Connell Decl., ¶ 9, 15.) Henry Shishido also failed to show up for a noticed deposition set on January 21, 2023. (O’Connell Decl., ¶ 13-14.)

Here, where the trial date is three months away, Defendants have completely refused to participate in discovery, despite the court’s prior orders and the imposition of monetary sanctions. Further, Defendants failed to oppose to the present motion. Accordingly, the court finds terminating sanctions in the form of striking Defendants’ answer to Plaintiff’s FAC and entering default are the appropriate remedies for the Plaintiff.

However, to the extent Plaintiff seeks terminating sanctions against Defendant Nicolas Shishido, the court declines to grant the request. While Nicholas Shishido failed to respond to Plaintiff’s second set of requests for admissions, Plaintiff did not seek to compel responses from Nicholas Shishido with regards to the first set of discovery requests heard on September 27, 2022, and October 10. The declaration from Plaintiff’s counsel also does not refer to Nicholas Shishido or specify which discovery was propounded on this specific defendant. Thus, the court declines to impose any sanctions on Defendant Nicholas Shishido.

CONCLUSION

Based on the foregoing, Plaintiff’s motion for terminating sanctions is GRANTED IN PART as to Defendants Henry James Shishido, Alona Lynn Shishido, H&S Mfg., Robert Fuentes, Desirae Fuentes, and Athena Marie Soto, and DENIED IN PART as to Defendant Nicholas Shishido.

Defendants Henry James Shishido, Alona Lynn Shishido, H&S Mfg., Robert Fuentes, Desirae Fuentes, and Athena Marie Soto’s answers to Plaintiff’s FAC are STRICKEN. As a result, DEFAULT is entered against these Defendants as of this date.