Judge: Stephen P. Pfahler, Case: 23STCV24029, Date: 2024-01-31 Tentative Ruling

Case Number: 23STCV24029    Hearing Date: April 16, 2024    Dept: 68

Dept. 68

Date: 4-16-24 c/f 3-27-24

Case #23STCV24029

Trial Date: 1-27-25

SPECIAL INTERROGATORIES & DOCUMENTS

MOVING PARTY: Plaintiff, Limelight International, Ltd., et al.

RESPONDING PARTY: Defendant, RLoom Design Corp. aka Newstyle Fashion Inc.

RELIEF REQUESTED

Motion to Compel Responses to Special Interrogatories and Request for Production of Documents

SUMMARY OF ACTION

Plaintiff Limelight International Ltd., (Limelight) a Hong Kong based company authorized to conduct business in California alleges an unspecified defaulted balance owed by defendant RLoom LLC (RLoom) in 2022. On February 8, 2023, RLoom and defendant D. Masin Consulting, LLC (D. Masin) executed a “General Assignment for the Benefit of All Creditors,” whereby all assets were subject to liquidation for payment of outstanding debts. Also on February 8, 2022, D. Masin and RLoom Design Corp. aka Newstyle Fashion Inc. also entered into an “Asset Purchase Agreement, whereby said assets were assigned by RLoom to D. Masin were sold to Newstyle for $365,000. Limelight maintains an asset value of at least $9,000,000, including its claimed outstanding debt.

On March 27, 2023, Plaintiffs filed its complaint for Malicious Prosecution, Breach of Fiduciary Duty, Fraudulent Conveyance, Successor Liability, Aiding and Abetting Breach of Fiduciary Duty, and Conspiracy to Fraudulently Transfer Property. Following certain defendants answer to the complaint, the parties stipulated to the filing of a first amended complaint. The first amended complaint filed on January 3, 2024, alleges Malicious Prosecution, Breach of Fiduciary Duty, Fraudulent Conveyance, Successor Liability, Aiding and Abetting Breach of Fiduciary Duty, and Conspiracy to Fraudulently Transfer Property. On February 20, 2024, the court overruled the demurrers of D. Masin Consulting, LLC and Rosenthal & Rosenthal of California, Inc. D. to the first amended complaint. On March 1, 2024, Masin Consulting, LLC and Rosenthal & Rosenthal of California, Inc. answered the first amended complaint.

RULING: Granted as to Sanctions Only/Moot as to Responses

Plaintiff Limelight International, Ltd. aka Limelight International Limited moves to compel responses to Special Interrogatories (set one) and Inspection Demand (set one) from defendant RLoom Design Corp. aka Newstyle Fashion Inc. The court consolidates the two separately filed motions into a single ruling.

Plaintiff served Defendant with all items on November 29, 2023. [Declarations of Alexander Haberbush, ¶ 5, Exhibits.] At the time of the filing of the motions, no responses were received. [Id., ¶ 7.] The parties stipulated to continue the hearings. Defendant in opposition to the special interrogatories motion maintains the notice of motion is defective, Plaintiff failed to “properly meet and confer” prior to filing the subject motions, and responses were provided. On the documents motion, Defendant again reiterates the meet and confer argument, and represents responses were in fact served. Plaintiff in reply concedes to receiving the responses on March 13, 2024. Plaintiff denies any deficiencies in the motion, challenges the quality of the responses, requests an order for complete responses, and reiterates the request for sanctions.

"Whether a particular response does resolve satisfactorily the issues raised by a motion is a matter best determined by the trial court in the exercise of its discretion, based on the circumstances of the case. In many cases involving untimely responses, the propounding party will take the motion off calendar or narrow its scope to the issue of sanctions. If the propounding party proceeds with the motion, however, the trial court has the discretion to rule on the motion. The trial court might compel responses without objection if it finds no legally valid responses have been provided to one or more interrogatories; it might deny the motion to compel responses as essentially unnecessary, in whole or in part, and just impose sanctions; it might treat the motion as one under section 2030.300 and either determine that further answers are required, or order the propounding party to ‘meet and confer’ (citation) and file a separate statement (Cal. Rules of Court, rule 3.1020(a)(2), (c)); or it might take the motion off calendar, thereby requiring the propounding party to file a motion under [citation]." (Sinaiko Healthcare Consulting, Inc. v. Pacific Healthcare Consultants (2007) 148 Cal.App.4th 390, 408–409.)

Defendant RLoom Design Corp. aka Newstyle Fashion Inc. served verified responses to special interrogatories, and the request for production of documents, on March 13, 2023—after the January 30, 2024, filed motions. Any arguments regarding notice of the motion, and the meet and confer effort are waived.

The court therefore finds the motion moot for purposes of compelling responses, and declines to consider any argument regarding the sufficiency of the responses. Any substantive challenges to the responses remain the subject matter of a motion to compel further responses, where all parties remain able to brief the subject matter. The court does not conduct independent discovery conferences, and will set an OSC re referral to a discovery referee in cases of persistent, voluminous discovery disputes.

The court maintains a policy of imposing sanctions on parties that only serve responses upon the filing of a motion. (Code Civ. Proc., §§ 2030.290, subd. (a-b), 2031.300, subd. (a-b).) The minimum amount of sanctions for a motion to compel production of documents increased to $1,000 per motion. The revised section allows for imposition of sanctions against a party responding after the filing of a motion, including parties that only respond until after the filing of a motion. The rule applies to production within seven days of a hearing. (See Code Civ. Proc., § 2023.050, subd. (a)(2).) The responses were in fact provided on March 13, 2024, which was 14 days from the date of the original hearing, and the parties subsequently stipulated to continue the hearing either way. The court therefore concludes the minimum sanctions amount inapplicable under the circumstances, and declines to impose the $1,000 minimum. The court instead imposes sanctions of $250/each for the Special Interrogatories and Request for Production of Documents. Total sanctions in the amount of $500 joint and severally imposed against both counsel and RLoom Design Corp. aka Newstyle Fashion Inc., and payable within 30 days of this order. Continuing, successful discovery motions can lead to increased sanctions amounts.

Motion for Judgment on the Pleadings scheduled for September 3, 2024.

Plaintiff Limelight International, Ltd. aka Limelight International Limited to give notice to all parties.