Judge: Teresa A. Beaudet, Case: 21STCV20335, Date: 2024-11-08 Tentative Ruling

Case Number: 21STCV20335    Hearing Date: November 8, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

On June 1, 2021, Plaintiffs Sherry Hennington (“Hennington”) and Lorrie Irving (jointly, “Plaintiffs”) filed this action against Defendant Glen Dollarhide (“Defendant”). The Complaint alleges causes of action for (1) breach of fiduciary duty, (2) breach of undivided loyalty,

(3) fraud, (4) conversion, (5) intentional interference with contractual relations, (6) intentional interference with prospective economic relations, (7) negligent interference with prospective economic relations, and (8) defamation.

In the Complaint, Plaintiffs allege, inter alia, that in or about September 2017, Plaintiffs and Defendant entered into a partnership to provide transportation services for mortuaries. (Compl., ¶ 7.) On September 22, 2017, Plaintiffs and Defendant formed and incorporated Carriage Transit Solutions, Inc. (the “Company”). (Compl., ¶ 8.) Defendant was elected as “Chief Financial Officer board member” of the Company. (Compl., ¶ 9.) Plaintiffs allege that “[i]n or about July 2020, Plaintiffs discovered that [Defendant] regularly failed to performed [sic] his duties as the chief financial officer, including but not limited to failure to manage the Company’s accounts and receivables, pay the Company’s debts and refused to permit Plaintiffs access to the Company’s financial and transportation records.” (Compl., ¶ 15.)

Plaintiffs further allege that Defendant “converted the Company’s and Plaintiffs’ assets and monies without permission or consent.” (Compl., ¶ 17.) Defendant “formed his own transportation services company in direct competition with the Company. Thereafter, [Defendant] caused the Company’s clients to use his company’s transportation services instead of the Company’s services.” (Compl., ¶ 18.)

Hennington previously moved for an order to compel Defendant’s deposition, and for monetary sanctions against Defendant. On July 2, 2024, the Court issued an Order granting the motion. The Court’s July 2, 2024 Order provides, inter alia, that “Hennington’s motion to compel the in-person deposition of Defendant is granted. The Court orders Defendant to appear for his deposition on July 16, 2024 at 10 a.m., at the following location: 609 Deep Valley Drive, Ste. 200, Rolling Hills Estates, CA 90274…Hennington’s request for sanctions is granted. Defendant is ordered to pay monetary sanctions in the amount of $2,076.60 to Hennington within 30 days of the date of this Order.” (July 2, 2024 Order at p. 4:18-22.)

In her declaration in support of the instant motion, Plaintiffs’ counsel indicates that “Plaintiffs…duly noticed Defendant’s court ordered deposition by serving the notice on July 2, 2024.” (Westmoreland Decl., ¶ 4, Ex. 3.) Plaintiffs counsel states that “Defendant did not appear at the court ordered deposition on July 16, 2024, without explanation or reason. Plaintiffs attempts to contact Defendant, but received no response.” (Westmoreland Decl., ¶ 5.) In addition, Plaintiffs’ counsel states that Plaintiffs attempted to take Defendant’s deposition again. “Plaintiffs duly noticed Defendant’s deposition on July 31, 2024, by serving the deposition notice on July 16, 2024…Again, Defendant did not appear for deposition.” (Westmoreland Decl., ¶¶ 6-7.) Plaintiffs’ counsel indicates that “Plaintiffs have attempted to contact Defendant to schedule his court ordered deposition, but Defendant has refused and continues to refuse to respond to Plaintiffs’ communications.” (Westmoreland Decl., ¶ 8.)

Plaintiffs now move for: (1) an order striking the Answer of Defendant and entering his default; (2) alternatively, an order for evidentiary and/or issue sanctions; and (3) an order awarding monetary sanctions against Defendant. The motion is unopposed. 

Discussion

Misuses of the discovery process include “[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, subds. (d), (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.) “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 the motion, Plaintiffs first assert that “the Court should impose terminating sanctions against Defendant for his refusal to appear for his Court ordered deposition on July 16, 2024.” (Mot. at p. 8:11-13.) The Court does not find that the circumstances warrant the imposition of terminating sanctions at this time. Other than the July 2, 2024 Order, Plaintiffs do not provide evidence that Defendant has disobeyed any previous court order to provide discovery. The Court notes that “the 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.) The Court does not find that Plaintiffs have provided evidence showing that less severe sanctions would not produce compliance with the discovery rules.

Next, Plaintiffs assert that “alternatively, this Court should impose evidentiary sanctions against Defendant for his refusal to appear for his Court ordered deposition on July 16, 2024.” (Mot. at p. 9:16-18.) Pursuant to Code of Civil Procedure section 2023.030, subdivision (c), “[t]he court may impose an evidence sanction by an order prohibiting any party engaging in the misuse of the discovery process from introducing designated matters in evidence.”  

Plaintiffs assert that Defendant should be precluded from introducing any evidence at trial pertaining his claims including any: (1) documentary and testimonial evidence that he does not owe monies to the Plaintiffs and/or the Carriage Transit Solutions, Inc., (2) documentary and testimonial evidence regarding Defendant’s defenses to Plaintiffs’ first cause of action for breach of fiduciary duty; (3) documentary and testimonial evidence regarding Defendant’s defenses to Plaintiffs’ second cause of action for breach of undivided loyalty, (4) documentary and testimonial evidence regarding Defendant’s defenses to Plaintiffs’ third cause of action for fraud, (5) documentary and testimonial evidence regarding Defendant’s defenses to Plaintiffs’ fourth cause of action for conversion, (6) documentary and testimonial evidence regarding Defendant’s defenses to Plaintiffs’ fifth cause of action for intentional interference with contractual relations, and (7) documentary and testimonial evidence regarding Defendant’s defenses to Plaintiffs’ sixth cause of action for intentional interference with prospective economic relations. (See Mot. at pp. 9:24-10:15.)

As discussed, Plaintiffs provide evidence that “Defendant did not appear at the court ordered deposition on July 16, 2024...” (Westmoreland Decl., ¶ 5.) In addition, as set forth above, Defendant’s deposition was noticed again for July 31, 2024, but Defendant did not appear for such deposition. (Westmoreland Decl., ¶¶ 6-7.) Plaintiffs’ counsel states that “Plaintiffs have attempted to contact Defendant to schedule his court ordered deposition, but Defendant has refused and continues to refuse to respond to Plaintiffs’ communications.” (Westmoreland Decl., ¶ 8.) Defendant does not oppose the instant motion, and thus does not dispute that he failed to appear for the July 16, 2024 or July 31, 2024 depositions. Moreover, Defendant does not oppose Plaintiffs’ request for evidence sanctions. Based on the foregoing, the Court finds that evidence sanctions are appropriate here.[1]

Lastly, Plaintiffs request that the Court issue monetary sanctions against Defendant for “his failure to sit for his depositions and to compensate Plaintiff for attorney’s fees and costs incurred by filing of this motion [sic].” (Mot. at p. 14:11-13.) Pursuant to Code of Civil Procedure section 2023.030, subdivision (a), “[t]he court may impose a monetary sanction ordering that one engaging in the misuse of the discovery process, or any attorney advising that conduct, or both pay the reasonable expenses, including attorney’s fees, incurred by anyone as a result of that conduct…If a monetary sanction is authorized by any provision of this title, the court shall impose that sanction unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.”  

As discussed, Plaintiffs provide evidence that “Defendant did not appear at the court ordered deposition on July 16, 2024...” (Westmoreland Decl., ¶ 5.) In addition, Defendant did not appear for his deposition noticed for July 31, 2024. (Westmoreland Decl., ¶¶ 6-7.) Defendant does not oppose the motion. Thus, the Court does not find that Defendant has shown that he acted with substantial justification or that other circumstances make the imposition of monetary sanctions unjust. The Court finds that Plaintiffs have shown that monetary sanctions are warranted here.

Plaintiffs’ counsel states that “[a]s to costs, Plaintiffs are seeking costs for obtaining a certificate of nonappearance in the amount of $571.70,” and that “Plaintiffs seeks costs for the motion filing fee and electronic filing fee in the amount of $75.00.” (Westmoreland Decl., ¶¶ 10-11.) Plaintiffs’ counsel also states that “Plaintiffs incurred attorneys fees in total of 8.5 hours…My reasonable hourly [sic] is at $1,000 per hour, which has been approved by superior courts for similar actions…I drafted and assembled this Motion, which amounted to 4.5 hours. I conducted legal research for this Motion in the amount 1 hour. I anticipate time will be spent to review Defendant’s opposition and writing a reply as well as conducting further legal research that will take at least 2 hours. I anticipate spending 1 hour to appear at the hearing and arguing the motion… However, Plaintiffs are only seeking reasonable attorneys fees and costs for the total amount of $4,646.70.” (Westmoreland Decl., ¶¶ 12-14.)

The Court does not find that Plaintiffs’ counsel has demonstrated that the requested $1,000.00 hourly billing rate is reasonable. In addition, the motion is unopposed, and Plaintiffs did not file any reply in support of the motion. Thus, the Court finds that it is reasonable to award a total of $4,546.00 in sanctions ($646.00 in costs + $3,900 in attorney’s fees).[2] 

Conclusion

Based on the foregoing, Plaintiffs’ motion is granted in part and denied in part.¿Plaintiffs’ motion for evidentiary sanctions and monetary sanctions is granted. Plaintiffs’ motion for terminating sanctions and alternative request for issue sanctions is denied.

            The Court orders that Defendant is prohibited from introducing the following matters in evidence at trial: (1) documentary and testimonial evidence that he does not owe monies to the Plaintiffs and/or the Carriage Transit Solutions, Inc., (2) documentary and testimonial evidence regarding Defendant’s defenses to Plaintiffs’ first cause of action for breach of fiduciary duty; (3) documentary and testimonial evidence regarding Defendant’s defenses to Plaintiffs’ second cause of action for breach of undivided loyalty, (4) documentary and testimonial evidence regarding Defendant’s defenses to Plaintiffs’ third cause of action for fraud, (5) documentary and testimonial evidence regarding Defendant’s defenses to Plaintiffs’ fourth cause of action for conversion, (6) documentary and testimonial evidence regarding Defendant’s defenses to Plaintiffs’ fifth cause of action for intentional interference with contractual relations, and (7) documentary and testimonial evidence regarding Defendant’s defenses to Plaintiffs’ sixth cause of action for intentional interference with prospective economic relations.

In addition, Defendant is ordered to pay monetary sanctions in the amount of $3,246.00 to Plaintiffs within 30 days of the date of this Order.

Finally, Defendant is ordered to appear for his deposition on a date noticed by Plaintiffs within the next two weeks from the date of this Order. If Defendant fails to appear at the deposition, Plaintiffs may move for an order striking the Answer of Defendant and entering his default.

Plaintiffs are ordered to provide notice of this Order.¿ 

DATED:  November 8, 2024                   ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court