Judge: Stephen P. Pfahler, Case: 23CHCV00689, Date: 2023-08-29 Tentative Ruling

Case Number: 23CHCV00689    Hearing Date: November 22, 2023    Dept: F49

Dept. F-49 

Date: 11-22-23

Case # 23CHCV00689 

Trial Date: Not Set 

FURTHER SPECIAL INTERROGATORIES

MOVING PARTY: Defendants/Cross-Complainants, Reza Abad, et al. 

RESPONDING PARTY: Plaintiff/Cross-Defendant, James Hoseini

RELIEF REQUESTED 

Motion to Compel Further Responses to Special Interrogatories (set one)

SUMMARY OF ACTION 

Plaintiff James Hoseini owns and operates a business identified as Milan Door. On an unspecified date, defendants Reza Abad and Aiden Bohloul formed a California corporation identified as defendant Teza Products, Inc., doing business as “Teza Doors & Windows.” Abad and Bohloul are the nephews of Plaintiff.  

In May 2021, the parties entered into a joint venture, whereby Plaintiff would merge operations of Milan Door with Teza Doors & Windows in exchange for a 50% ownership interest, with Abad and Bohloul jointly owning (25% each) the remaining half. The individual defendants also presented terms for business operations.  

On August 14, 2021, the individual parties executed a written “Joint Venture and Operating Agreement.” Prior to the execution of the agreement—June 15, 2021—Plaintiff “transferred…assets, inventory, receivables, and goodwill of Milan Door” with certain business establishments “valued” at a minimum of one million dollars.   

Notwithstanding the agreement, Plaintiff alleges the individual defendants violated the agreement in refusing to distribute net profits according to ownership interests, denying Plaintiff access to the corporate bank account, making purchases in excess of $5,000 without majority shareholder approval, removing Plaintiff’s name as a designated officer in the corporate registration documents with the California Secretary of State, transferring corporate assets to personal bank accounts, conducting business as individuals rather than on behalf of the corporate entity, transferring web-site operations to other independently operated websites, and formation of three new corporate entities and operations in two new locations, as well as two residential properties.  

On March 6, 2022, Plaintiff filed a complaint for Fraud, Breach of Written Contract, Breach of Oral Contract, Breach of Fiduciary Duty, Accounting, and Constructive Trust. On March 20, 2023, Plaintiff filed a first amended complaint for Fraud, Breach of Written Contract, Breach of Fiduciary Duty, Elder Abuse, Accounting, and Constructive Trust. On April 24, 2023, Defendants answered and filed a verified cross-complaint for Fraud, Conversion, Accounting, Indemnity, Constructive Trust, Permanent Injunction, And Declaratory Relief. 

In the cross-complaint, Abad and Bohloul allege the existence of their own preexisting door businesses, and contend Hoseini was “hired” as an “independent contractor” for the Teza corporate entity in June 2021. The cross-complaint acknowledge the later formation of the joint venture, which was formed for the manufacture of wooden doors in Mexico. No actual manufacturing or sales ever occurred, which led to the alleged abandonment of the joint venture in September 2021. Although Hoseini allegedly previously agreed to the independent contractor hiring, the cross-complaint again alleges the hiring after the discontinuation of the Teza joint venture.  

The parties allegedly agreed to opening an operations hub in Houston, Texas, whereby Hoseini would be identified as the corporate secretary in order to execute documents on behalf of the corporation. Abad and Bohloul deny any other agreement for shares or ownership interests. 

Hoseini executed a lease for commercial premises in Houston in May 2022, and amendment to the lease in August 2022. In December 2022, Abad and Bohloul allege Hoeine “abandoned” the premises. Abad and Bohloul “removed” Hoseini as an officer of the corporation.  

On an unspecified date, Hoseini “locked Cross-Complainants out of the property and changed the locks” on the premises identified as a “warehouse/office located at NORDHOFF” where Teza conducted “business since 2020.” Abad and Bohloul allege the lockout was part of a greater scheme to default them into a acquiring the purported 50% interest in Teza, along with the other identified conditions. Abad and Bohloul additionally allege that following the lockout and assumption of control of the premises, Hoseini proceeded to transfer inventory to a new location, and selling items for personal gain. Abad and Bohloul also challenge the exhibits regarding the alleged written agreement of the parties as incorporated into the first amended complaint, and also offer factual challenges to specific allegations of the complaint regarding the Nordhoff premises.  

On April 25, 2023, the court granted in part and denied in part the ex parte motion for temporary restraining order. The court enjoined Hoseini from disposing, selling, liquidating or transferring any property from 20115 Nordhoff St., Chatsworth pending further adjudication of the action, and denied all other requested relief. On May 30, 2023, the court denied the motion for preliminary injunction brought by Defendants/Cross-Complainants Abad, Bohloul, and Teza Products, Inc., and dissolved the temporary restraining order.

On August 29, 2023, the court granted the motion of counsel for Hoseini to be relieved as counsel of record. The court docket shows no new substitution of counsel.

On September 1, 2023, Teza Products, Inc., Teza Doors, Inc., Reza Abad, and Aiden Bholouli filed a first amended cross-complaint against Hoseini for Fraud, Conversion, Constructive Trust, and Permanent Injunction.

RULING: Granted.

Objections to Supplemental Declaration: Overruled.

The court denies “the motion to strike” the motion, due to the failure of responding party to reserve a hearing date within the reservation system, and lack of any special setting by the court. Court policy generally requires all hearings either specially set or reserved through the computer reservation system. Even considering the request, the court finds no basis of authority to block the filed the motion simply based on a supplemental declaration.

Defendants/Cross-Complaints Teza Products, Inc., Reza Abad and Aiden Bohloul brings a motion to compel further responses to Special Interrogatories (set one) from Plaintiff/Cross-Defendant Hoseini. Moving parties contend the responses are both factually deficient and/or replete with improper objections. Responding party in opposition maintains the responses and objections are proper. Moving parties in reply reiterate the basis of the motion and request for sanctions.

Responding party presents responses consisting of objections on grounds of vague and ambiguous, overbroad, speculation, financial privacy, and relevance, as well as terse factual conclusions. The relevance and financial privacy objections lack merit.

The form of question objections lack merit. Defendant may not intentionally misconstrue a work for obstreperous purposes. “Indeed, where the question is somewhat ambiguous, but the nature of the information sought is apparent, the proper solution is to provide an appropriate response.” (Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 783 superseded by statute on unrelated ground as stated in Guzman v. General Motors Corp. (1984) 154 Cal.App.3d 438, 444.) Defendant lacks support for the objections on vague and ambiguous to Judicial Council drafted form interrogatories.

“But ‘[f]or discovery purposes, information is relevant if it “might reasonably assist a party in evaluating the case, preparing for trial, or facilitating settlement….” [Citation.] Admissibility is not the test and information, unless privileged, is discoverable if it might reasonably lead to admissible evidence. [Citation.] These rules are applied liberally in favor of discovery [citation], and (contrary to popular belief), fishing expeditions are permissible in some cases. [Citation.]’ (Citations.)” (Cruz v. Superior Court (2004) 121 Cal.App.4th 646, 653–654.) The subject interrogatories seek relevant information regarding the information relevant to the case brought by Plaintiff. Plaintiff cannot pick and chose how much information will be disclosed based on unsupported parameters.

On the overbroad objections, the court finds the objection to number 47, 57, 58 valid. “When discovery requests are grossly overbroad on their face, and hence do not appear reasonably related to a legitimate discovery need, a reasonable inference can be drawn of an intent to harass and improperly burden. When a judge evaluates such factors to determine whether a party has acted reasonably and in good faith in attempting informal resolution, a factual component of decision, derived from the trial judge's knowledge of the case, is inevitably involved.” (Obregon v. Superior Court (1998) 67 Cal.App.4th 424, 431.) The court agrees the absolute demands are overly broad without a specific basis for such open ended discovery. (Calcor Space Facility, Inc. v. Superior Court (1997) 53 Cal.App.4th 216, 224–225.) The parties are ordered to meet and confer for a more limited, focused time frame and subject matter. The remainder of the objections lack merit.

“Privacy interests generally fall into one of two categories: (1) an interest in making intimate personal decisions or conducting personal activities without observation, intrusion, or interference (‘autonomy privacy’); and (2) an interest in precluding the dissemination or misuse of sensitive and confidential information (‘informational privacy’).” (Ortiz v. Los Angeles Police Relief Assn. (2002) 98 Cal.App.4th 1288, 1301.) A party “alleging an invasion of privacy in violation of the state constitutional right to privacy must establish each of the following: (1) a legally protected privacy interest; (2) a reasonable expectation of privacy in the circumstances; and (3) conduct by [a party] constituting a serious invasion of privacy.” (Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1, 39–40.) “[I]ndividuals have a legally recognized privacy interest in their personal financial information.” (International Federation of Professional & Technical Engineers, Local 21, AFL-CIO v. Sup. Ct. (2007) 42 Cal.4th 319, 330.) The objecting party has the burden to file evidence of the preliminary facts establishing a privilege exists. (Williams v. Superior Court (2017) 3 Cal.5th 531, 557; HLC Properties, Limited v. Sup. Ct. (2005) 35 Cal.4th 54, 59; Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th at pp. 39-40.)

The argument for privacy relies in part on an assumption of privacy, which dovetails into the relevance of the sought after information. Relevance constitutes a liberal standard, with privacy as a form of counterbalance. (Williams v. Superior Court (2017) 3 Cal.5th at p. 541.)

In context of the relevance objections, the court finds a lack of support to an objection specifically seeking information on an item placed at issue by responding party—loss of income. The court shows no effort by Responding Party to otherwise avoid placing the information at issue, or other efforts to shield the information. The court finds a waiver of the underlying substance to the objection.

On the remaining items, the court finds the responses factually incomplete. Responding Party needs to serve responses in compliance with Code of Civil Procedure section 2030.220. Responding Party may not refer to prior discovery. (Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 783–784 [“Answers must be complete and responsive. Thus, it is not proper to answer by stating, ‘See my deposition’, ’See my pleading’, or ‘See the financial statement’“].)

The motion is granted.  Responding party must serve verified further responses within 20 days from the date of this order.

Sanctions are awarded in the amount of $250 joint and several against responding parties and counsel. Court policy limits sanctions awards to $250 upon the first motion, with the potential for increasing amounts. (Code Civ. Proc., § 2030.300, subd. (d).) The court declines to consider the supplemental declaration request regarding the off-calendar motion to quash, challenges to credibility, or exceeding the limits of standard court policy simply based on aggressive litigation stances.

Motions to compel discovery set for December 11, 2023. The court continues to reserve the right to set an OSC re: Referral to a Discovery Referee at the time of the hearing upon reviewing the motion and in lieu of actually hearing any potential motions to compel further responses. The responses and objections represent a minimal effort. Further disputes over any and all production and/or supplemental responses will be considered as part of the basis for referee consideration. The parties may also stipulate to a referee. A discovery referee can also be vested with authority to impose sanctions in favor of the prevailing party.

Moving Parties to provide notice.