Judge: Teresa A. Beaudet, Case: 18STCV06807, Date: 2023-01-09 Tentative Ruling

Case Number: 18STCV06807    Hearing Date: January 9, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Plaintiff Brian Weiner, individually and derivatively on behalf of Onyx Tower Management, LLC (“Plaintiff”) filed this action on November 30, 2018, against a number of defendants. The operative Third Amended Complaint was filed on October 22, 2020, asserting causes of action for breach of contract, breach of the covenant of good faith and fair dealing, constructive trust, accounting, declaratory relief, constructive fraud, fraud, and appointment of receiver.

On March 6, 2020, defendant Michael Hakim filed a Cross-Complaint against a number of cross-defendants, including Onyx Tower Management, LLC. On January 19, 2021, a number of defendants filed a Cross-Complaint against Plaintiff.   

Plaintiff now moves for terminating sanctions against defendants Sam Hakim, Onyx Tower, LLC, Onyx Tower Group, LLC, and Onyx Tower Holdings, LLC.

Onyx Tower Group; Onyx Tower, LLC, Onyx Tower Holdings, Onyx Tower Management, LLC, Sam Hakim, Julia Hakim, Tanya Hakim, and Said Hakim (collectively, the “Onyx Parties”) oppose. In addition, Michael Hakim opposes.

Objection to Sur-Reply

Sustained.

Discussion

Disobeying a court order to provide discovery is a misuse of the discovery process. ((Code Civ. Proc., § 2023.010, subd. (g).) There are a broad range of sanctions available against anyone engaging in conduct that is a misuse of the discovery process, including the issuance of monetary, evidentiary, contempt, and terminating sanctions. (Code Civ. Proc., § 2023.030.) “The court may impose a terminating sanction by one of the following orders: (1)¿An order striking out the pleadings or parts of the pleadings of any party engaging in the misuse of the discovery process. (2)¿An order staying further proceedings by that party until an order for discovery is obeyed. (3)¿An order dismissing the action, or any part of the action, of that party. (4)¿An order rendering a judgment by default against that party.” (Code Civ. Proc., § 2023.030, subd. (d).)  

In addition, Plaintiff notes that pursuant to Government Code section 68608, subdivision (b), “[j]udges shall have all the powers to impose sanctions authorized by law, including the power to dismiss actions or strike pleadings, if it appears that less severe sanctions would not be effective after taking into account the effect of previous sanctions or previous lack of compliance in the case. Judges are encouraged to impose sanctions to achieve the purposes of this article.”

Plaintiff asserts that terminating sanctions are warranted in this case. Plaintiff notes that the parties participated in an informal discovery conference (“IDC”) on July 18, 2022. Per the Court’s July 18, 2022 minute order, the parties agreed and the Court ordered as follows: “1. The depositions of Sam Hakim as the PMK for all three Onyx entities regarding the identification of documents only, as set forth in the Plaintiff’s amended notices of deposition dated July 11, 2022, will take place on July 26, 2022, at the times designated in the amended notice via Zoom. 2. The cut-off date for completing all depositions is extended from July 29, 2022, to October 7, 2022.”

On July 19, 2022, Plaintiff’s counsel sent a Zoom link for a July 26, 2022 deposition, and asked for dates of availability in August and September so that the other depositions could be set. (Levine Decl., ¶ 14.) On July 22, 2022, defendants served objections to the deposition notices objecting to each topic, but indicating that they would appear at the July 26, 2022 deposition. (Levine Decl. ¶ 15.) On July 24, 2022, counsel for all defendants except Michael Hakim (Dennis Wilson) indicated that Sam Hakim would not be attending his July 26, 2022 PMK deposition because “he is feeling very ill and has Covid like symptoms and will be seeking medical attention tomorrow.” (Levine Decl., ¶¶ 16-17, Ex. 9.) Plaintiff’s counsel asked for alternative dates of availability for the depositions, and Mr. Wilson offered the dates of August 24, 2022 and/or August 30, 2022 for the PMK deposition. (Levine Decl., ¶¶ 17-18, Exs. 9-10.) Ultimately, Sam Hakim’s PMK deposition took place on November 30, 2022 and December 5, 2022. (Levine Decl., ¶¶ 27-18.) 

            Plaintiff asserts that Sam Hakim did not properly prepare as the Onyx entities’ PMK. Plaintiff indicates that Sam Hakim failed to identify documents in the noticed categories of documents except for an undated deed of trust. (Levine Decl., ¶ 27, Ex. 15, p. 71:15-24.) Plaintiff also contends that Sam Hakim testified “I don’t know” approximately 300 times to certain questions, including questions about his own job title, and whether he does anything for certain Onyx entities or receives income from such Onyx entities. (Levine Decl., ¶ 27, Ex. 15, pp. 10:12-11:22.)

            Plaintiff contends that terminating sanctions are appropriate here because defendants did not comply with the Court’s July 18, 2022 minute order. Plaintiff asserts that Sam Hakim’s deposition transcript demonstrates that, despite the Court’s order, Sam Hakim failed to comply with his duties of being a designated agent for the Onyx entities as set forth in in Code of Civil Procedure section 2025.230. Pursuant to Section 2025.230, “[i]f the deponent named is not a natural person, the deposition notice shall describe with reasonable particularity the matters on which examination is requested. In that event, the deponent shall designate and produce at the deposition those of its officers, directors, managing agents, employees, or agents who are most qualified to testify on its behalf as to those matters to the extent of any information known or reasonably available to the deponent.” (Code Civ. Proc., § 2025.230.) 

The Court does not find that the circumstances warrant the imposition of terminating sanctions at this time. Other than the July 18, 2022 minute order, Plaintiff does not appear to identify another specific Court order that it asserts defendants have violated, so there is no history of multiple discovery abuses to show that less severe sanctions would not produce compliance. “[T]he sanctioned party’s history as a repeat offender is not only relevant, but also significant, in deciding whether to impose terminating sanctions.” ((Liberty Mutual Fire Ins. Co. v. LcL Administrators, Inc. (2008) 163 Cal.App.4th 1093, 1106.) “A decision to order terminating sanctions should not be made lightly. But where a violation is willful, preceded by a history of abuse, and the evidence shows that less severe sanctions would not produce compliance with the discovery rules, the trial court is justified in imposing the ultimate sanction.” ((Mileikowsky v. Tenet Healthsystem (2005) 128 Cal.App.4th 262, 279-280.) 

In addition, although the July 18, 2022 minute order provides that “[t]he depositions of Sam Hakim as the PMK for all three Onyx entities regarding the identification of documents only, as set forth in the Plaintiff’s amended notices of deposition dated July 11, 2022, will take place on July 26, 2022,” Plaintiff acknowledges that Sam Hakim ultimately appeared for his PMK deposition on the later dates of November 30, 2022 and December 5, 2022. (Levine Decl., ¶¶ 27-28.) As set forth above, Sam Hakim’s counsel indicated that Mr. Hakim was ill and thus could not attend the deposition scheduled for July 26, 2022. (Levine Decl., ¶ 17, Ex. 9.) In the opposition, the Onyx Parties cite to Lopez v. Watchtower Bible & Tract Society of New York, Inc. (2016) 246 Cal.App.4th 566, 604, which provides that “the courts have long recognized that the terminating sanction is a drastic penalty and should be used sparingly…The discovery statutes…evince an incremental approach to discovery sanctions, starting with monetary sanctions and ending with the ultimate sanction of termination. Although in extreme cases a court has the authority to order a terminating sanction as a first measure, a terminating sanction should generally not be imposed until the court has attempted less severe alternatives and found them to be unsuccessful and/or the record clearly shows lesser sanctions would be ineffective.” (Internal quotations, citations, and emphasis omitted.) The Court does not find that Plaintiff has demonstrated that the record clearly shows lesser sanctions would be ineffective, or that the Court has attempted less severe alternatives.

Conclusion

Based on the foregoing, Plaintiff’s motion is denied.   

The Onyx Parties are ordered to give notice of this Order.

DATED:  January 9, 2023     

                        ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court