Judge: Teresa A. Beaudet, Case: 21STCV05410, Date: 2023-04-04 Tentative Ruling

Case Number: 21STCV05410    Hearing Date: April 4, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Plaintiff Eduardo Quijano (“Plaintiff”) filed this action on February 9, 2021 against Defendants Marlo Cayton and Michelle Cayton (jointly, “Defendants”).

The Complaint asserts causes of action for (1) set aside of transfers of community property without spousal consent, (2) conversion of community property, (3) imposition of constructive trust, (4) community property had and received, (5) unjust enrichment, (6) accounting of community property, (7) quiet title, (8) reformation of deeds, (9) declaratory relief, (10) declaration that gifts of community personal property are void, (11) declaration that Bonnie Brae Convalescent Hospital, Inc. is community property, (12) declaration that St. Sharbel Residential Care Facility, Inc. is community property, (13) partition of real property, and (14) financial elder abuse.

Plaintiff alleges that he was married to Elma Ballo Cayton at all relevant times alleged in the Complaint through the time of Elma Ballo Cayton’s passing in January 2021. (Compl., ¶ 1.) Defendants are daughters of Elma Ballo Cayton from a previous marriage. (Compl., ¶¶ 2-3.) Plaintiff alleges that Defendants diverted community property funds of Plaintiff and Elma Ballo Cayton into accounts and titles in an attempt to divest Plaintiff of his community property rights. (Compl., ¶ 8.) Elma Ballo Cayton worked as the Chief Executive Officer and sole Director of the medical facility Bonnie Brae Convalescent Hospital, Inc. (“Bonnie Brae”). (Compl., ¶ 79.) Plaintiff alleges that Defendants diverted the community’s share of profits from Bonnie Brae and have attempted to seize control of Bonnie Brae. (Compl., ¶ 80.)

Plaintiff also alleges that during the marriage of Plaintiff and Elma Ballo Cayton, in 2005, Elma Ballo Cayton purchased a residential care facility called St. Sharbel Residential Care Facility, Inc. (“St. Sharbel”) using community funds. (Compl., ¶ 84.) Plaintiff alleges that Defendants diverted the community’s share of profits from St. Sharbel and have attempted to seize control of St. Sharbel. (Compl., ¶ 86.)   

On March 1, 2022, Plaintiff filed motions to compel subpoena compliance and document production by Bonnie Brae and St. Sharbel. On April 28, 2022, the Court issued an Order granting Plaintiff’s motions to compel subpoena compliance and document production. The April 28, 2022 Order provides, inter alia, that “the parties agreed at the hearing that the documents would be produced no later than 60 days from today’s date.” The Court denied Plaintiff’s request for sanctions.

Plaintiff’s counsel states that “[s]hortly before the hearing date on the motions to compel, Bonnie Brae and St. Sharbel finally produced some documents. The production, however, was grossly incomplete.” (Belcher Decl., ¶ 11.)

On June 8, 2022, Plaintiff’s counsel sent a letter to Oliver Morrison of Lagerlof, LLP[1], indicating, inter alia, “[o]ur preliminary review of Bonnie Brae’s and St. Sharbel’s production indicates that the production is incomplete.” (Belcher Decl., ¶ 13, Ex. C.) Plaintiff’s counsel asserts that certain documents were requested but never received, and that certain documents were “incomplete.” (Ibid.) 

Plaintiff’s counsel states that “[d]espite the passage of 60 days…Defendants have not produced additional documents.” (Belcher Decl., ¶ 16.)

Plaintiff now moves for an order that Bonnie Brae and St. Sharbel comply with the Court’s Order of April 28, 2022, and produce documents. Plaintiff also moves for an order that Bonnie Brae and St. Sharbel pay monetary sanctions, jointly and severally, in the amount of $9,750 to Plaintiff. Defendants oppose.

Discussion

As an initial matter, Plaintiff moves for an order that Bonnie Brae and St. Sharbel “comply with the Court's Order of April 28, 2022, and produce documents.” The Court notes that it does not issue orders to comply with its orders, so no further order is necessary or appropriate to compel compliance with the Court’s April 28, 2022 Order.  

Plaintiff also seeks monetary sanctions. Plaintiff notes that misuses of the discovery process include “[d]isobeying a court order to provide discovery.” (Code Civ. Proc., § 2023.010, subdivision (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, issue, and terminating sanctions. (¿¿Code Civ. Proc., § 2023.030¿¿.) A monetary sanction may be imposed against one engaging in the misuse of the discovery process. (¿¿Code Civ. Proc., § 2023.030, subdivision (a).) 

Plaintiff seeks $9,750 in sanctions for attorney’s fees incurred and anticipated to be incurred in connection with the instant motion, as well as attorney’s fees incurred in connection with the prior “motion to compel.” (Belcher Decl., ¶ 18.)

In the opposition, Defendants assert that the motion is improperly noticed. Defendants note that the notice of motion is directed “TO ALL PARTIES HEREIN AND THEIR ATTORNEYS OF RECORD,” but that Bonnie Brae and St. Sharbel are not parties in the instant action. (See Notice of Motion at p. 2:1.) Plaintiff does not respond to this point in the reply.

Defendants also assert that the motion has not been properly served on third parties Bonnie Brae and St. Sharbel. Specifically, Defendants assert that “the Proof of Service of the Motion shows service of the Motion on counsel for Defendants and there is no record of service of the Motion on Bonnie Brae and St. Sharbel.” (Opp’n at p. 2:11-12.) The proof of service attached to the motion indicates that the motion was served on Joshua R. Driskell and Steve Valerio of Lagerlof LLP. Plaintiff does not respond to this point in the reply. However, Plaintiff’s counsel states in his declaration in support of the motion that he “had multiple communications with counsel at Lagerlof LLP, which purported to represent Bonnie Brae and St. Sharbel in connection with the subpoenas.” (Belcher Decl., ¶ 4.)

Defendants also assert that the notice of motion is defective in failing to identify the grounds for the issuance of the requested order. California Rules of Court, rule 3.1110, subdivision (a) provides that “[a] notice of motion must state in the opening paragraph the nature of the order being sought and the grounds for issuance of the order.” The Court finds that the notice of motion is sufficient. It indicates, inter alia, that “[t]his motion is made on the ground that on April 28, 2022, this Court granted Plaintiffs motion to compel Bonnie Brae and St. Sharbel to comply with deposition subpoenas to produce its records. Bonnie Brae and St. Sharbel have not complied with the Court’s Order. This motion is also made on the ground that the documents requested in the deposition subpoena are directly relevant to the key issues in this case, including the community income generated by the decedent and the diversion of community assets.” (Notice of Motion at p. 2:10-16.) 

Defendants also assert that monetary sanctions are not justified. Defendants provide the Declaration of Michelle Cayton, who states that she is an officer of Bonnie Brae and St. Sharbel and was involved in responding to the records subpoenas served by Plaintiff on these entities. (Cayton Decl., ¶ 2.) Ms. Cayton states that she worked with attorney Oliver Morrison of the Lagerlof, LLP firm in assembling documents that were responsive to the records subpoenas. (Cayton Decl., ¶ 3.) Defendants indicate that Mr. Morrison “went on medical leave at the beginning of July 2022,”and that “it came to light after the start of Mr. Morrison’s leave of absence that his medical condition directly impacted his duties as counsel for several months prior to his departure.” (Pero Decl., ¶ 2.) Specifically, “there was a breakdown in Mr. Morrison’s ability to meet deadlines, including his involvement in this case including the responses to the subpoenas served on [Bonnie Brae and St. Sharbel].” (Pero Decl., ¶ 2.)

Defendants’ current counsel indicates that in October 2022, he worked with Plaintiff’s counsel to reach a Stipulated Protective Order regarding confidential records produced in this case. (Pero Decl., ¶ 3.) Defendants’ counsel states that on March 16, 2023, he completed a “supplemental production of documents delivered to Plaintiff’s counsel…all marked ‘CONFIDENTIAL’ pursuant to the terms of the Stipulated Protective Order, which documents were responsive to Plaintiff’s first and second sets of requests for production of documents and

which were also responsive to the records subpoenas served on Bonnie Brae and St. Sharbel.” (Pero Decl., ¶ 4.)

Ms. Cayton states that “[s]tarting in August 2022, I worked with George Hindmarsh and Matthew Pero, two attorneys with the Lagerlof, LLP firm, who became involved in this case after Oliver Morrison took a leave of absence. In working with Mr. Hindmarsh and Mr. Pero, I located additional company records responsive to the records subpoenas including banking and corporate records for Bonnie Brae and St. Sharbel. These records were all delivered to the Lagerlof, LLP firm for production…There are no other documents responsive to the records subpoenas within the possession, custody or control of these entities. The subpoenas sought the production of records dating back to 1993. The requested historical financial and corporate records of the companies no longer existed as of the time this lawsuit was filed.” (Cayton Decl., ¶ 4.)

Based on the foregoing, the Court does not find that the circumstances warrant the imposition of monetary sanctions against Bonnie Brae and St. Sharbel. Accordingly, the Court denies Plaintiff’s request for monetary sanctions.

Conclusion

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

The Court orders Defendants to give notice of this ruling. 

DATED:  April 4, 2023                     

________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court