Judge: Teresa A. Beaudet, Case: 22STCV03916, Date: 2023-08-16 Tentative Ruling

Case Number: 22STCV03916    Hearing Date: October 5, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Plaintiffs Daniel Wang and Grace Lee (jointly, “Plaintiffs”) filed this action on January 31, 2022 against Defendants 360 Capital Ventures Inc. (“360 Capital”), Sachin Patel (“Patel”), and Miguel Soltero (collectively, “Defendants”).

On March 21, 2023, 360 Capital and Patel filed a Cross-Complaint against Plaintiffs and other Cross-Defendants. On July 27, 2023, 360 Capital filed the operative First Amended Cross-Complaint, alleging causes of action for (1) reformation, (2) equitable indemnity, (3) equitable indemnity, (4) apportionment and contribution, (5) declaratory relief, (6) bond liability, and (7) bond liability.

On April 13, 2023, Plaintiffs filed the operative First Amended Complaint (“FAC”), asserting causes of action for (1) restitution, (2) negligence, and (3) breach of written contract.

360 Capital indicates that on December 13, 2022, 360 Capital served an Amended Demand for Site Inspection on Plaintiffs. (Woo Decl., ¶ 6, Ex. C.) On December 15, 2022, Plaintiffs served a “Response to Amended Demand for Site Inspection.” (Woo Decl., ¶ 7, Ex. E.)

360 Capital’s counsel and Plaintiff’s counsel met and conferred regarding Plaintiffs’ response to the amended demand for site inspection. (Woo Decl., ¶¶ 8-12.) The Court notes that on March 22, 2023, the parties participated in an Informal Discovery Conference (“IDC”). The Court’s March 22, 2023 minute order provides that “[t]he matter is called for hearing. The parties fulfilled the Informal Discovery Conference obligation for the issues outlined in Plaintiff’s Informal Discovery Conference Statement filed March 17, 2023.”[1]

360 Capital now moves “to Compel Further Responses to its Amended Demand for Site Inspection propounded to Plaintiffs Daniel Wang and Grace Lee.” 360 Capital also seeks monetary sanctions. Plaintiffs oppose.

Legal Standard

Code of Civil Procedure section 2031.310, subdivision (a) provides that “[o]n receipt of a response to a demand for inspection, copying, testing, or sampling, the demanding party may move for an order compelling further response to the demand if the demanding party deems that any of the following apply: (1) A statement of compliance with the demand is incomplete. (2) A representation of inability to comply is inadequate, incomplete, or evasive. (3) An objection in the response is without merit or too general.” A motion to compel further responses to a demand for inspection must set forth specific facts showing good cause for the discovery sought and must be accompanied by a meet and confer declaration. (Code Civ. Proc., § 2031.310, subd. (b).)

Discussion

A.    Plaintiffs’ Procedural Arguments

As an initial matter, Plaintiffs assert that 360 Capital’s Amended Demand for Site Inspection was untimely. Plaintiffs cite to Code of Civil Procedure section 2031.030, subdivision (c)(2), which provides that “[e]ach demand in a set shall be separately set forth, identified by number or letter, and shall do all of the following:…(2) Specify a reasonable time for the inspection, copying, testing, or sampling that is at least 30 days after service of the demand, unless the court for good cause shown has granted leave to specify an earlier date…” As set forth above, on December 13, 2022, 360 Capital served an Amended Demand for Site Inspection on Plaintiffs. (Woo Decl., ¶ 6, Ex. C.) The Amended Demand states, inter alia, that “[t]he inspection and other related activities described herein are scheduled to commence on January 8, 2023 at 8:00am, and will continue thereafter from day to day, excluding weekends and holidays.” (Ibid.) Plaintiffs note that January 8, 2023 is only 26 days after December 13, 2022, the date of service of 360 Capital’s Amended Demand for Site Inspection.

In the reply, 360 Capital asserts that Plaintiffs agreed to the January 8, 2023 date and affirmed the propriety of the timing in its Response to the Amended Demand for Site Inspection. Indeed, 360 Capital’s counsel’s declaration in support of the motion attaches a December 12, 2022 email from Plaintiffs’ counsel stating “[c]onfirmed for January 8, 2023. Let me know the start time. Also, everyone who plans on attending will have to sign a release.” (Woo Decl., ¶ 5, Ex. A.) In addition, Plaintiffs’ response to the Amended Demand for Site Inspection states, inter alia, that “Plaintiffs will allow the inspection to proceed as requested in the Demand, but will not allow the inspection to ‘continue thereafter from day to day, excluding weekend and holidays.’” (Woo Decl., ¶ 7, Ex. E.)

Plaintiffs also assert in the opposition that 360 Capital’s Amended Demand fails to comply with Code of Civil Procedure section 2031.030, subdivision (c)(4), which provides that “[e]ach demand in a set shall be separately set forth, identified by number or letter, and shall do all of the following:…(4) Specify any inspection, copying, testing, sampling, or related activity that is being demanded, as well as the manner in which that activity will be performed, and whether that activity will permanently alter or destroy the item involved.”

Plaintiffs assert that here, 360 Capital “fails to specify what testing or sampling it was demanding and the manner in which it will be performed.” (Opp’n at p. 7:1-2.) But as noted by 360 Capital, the Amended Demand for Site Inspection provides, inter alia, that “Defendant 360 CAPITAL VENTURES INC. hereby demands that Plaintiffs DANIEL WANG and GRACE LEE…permit inspection of the real property located at 15105 Weddington St., Sherman Oaks, CA 91411…in order to inspect and to measure, survey, photograph, test, or sample the land or other property, or any designated object or operation on it.” (Woo Decl., ¶ 6, Ex. C.) The Amended Demand for Site Inspection also states “[t]he above demanded activities shall be done according to standards within the industry for said activities by persons qualified to perform the requested activities. The requested activities are not expected to permanently damage, destroy, or alter the Property or inventory.” (Ibid.)

The Court does not find that Plaintiffs have demonstrated that 360 Capital’s Amended Demand for Site Inspection is inadequate under Code of Civil Procedure section 2031.030, subdivision (c)(4) such that the instant motion should be denied.  

B.     360 Capital’s Amended Demand for Site Inspection

As set forth above, Code of Civil Procedure section 2031.310, subdivision (a) provides that “[o]n receipt of a response to a demand for inspection, copying, testing, or sampling, the demanding party may move for an order compelling further response to the demand if the demanding party deems that any of the following apply: (1) A statement of compliance with the demand is incomplete. (2) A representation of inability to comply is inadequate, incomplete, or evasive. (3) An objection in the response is without merit or too general.”

            360 Capital asserts that “Plaintiffs’ responses of purported compliance are not code compliant.” (Mot. at p. 8:9.) Pursuant to Code of Civil Procedure section 2031.220, “[a] statement that the party to whom a demand for inspection, copying, testing, or sampling has been directed will comply with the particular demand shall state that the production, inspection, copying, testing, or sampling, and related activity demanded, will be allowed either in whole or in part, and that all documents or things in the demanded category that are in the possession, custody, or control of that party and to which no objection is being made will be included in the production.”

            360 Capital notes that Plaintiffs’ response to the demand for site inspection does not specifically state that “the production, inspection, copying, testing, or sampling, and related activity demanded, will be allowed either in whole or in part.” (Code Civ. Proc., § 2031.220.)

Instead, Plaintiffs’ response indicates, inter alia, that “Plaintiffs will allow the inspection to proceed as requested in the Demand, but will not allow the inspection to ‘continue thereafter from day to day, excluding weekend and holidays.’ Plaintiffs will only allow a visual, non-invasive inspection. Destructive testing of the Property is prohibited. Should Defendant desire to perform any testing or sampling of the Property, Defendant must first disclose to Plaintiff’s counsel the type of testing or sampling requested and obtain Plaintiff’s counsel’s written permission before doing so. Before the inspection, however, and before entering onto the Property, any person taking part in the inspection must sign, date and return to Plaintiffs’ counsel the attached Release (see Exh. A).” (Woo Decl., ¶ 7, Ex. E.)

360 Capital also asserts in the motion that “[a]ny such inspection cannot be limited to just a visual inspection, nor is Propounding Party required to obtain Plaintiffs’ written permission to perform testing or sampling. Neither is Propounding Party required to release any party from any claims, or be forced to indemnify and have its counsel indemnify Plaintiffs in any manner. Plaintiffs’ refusal to allow Propounding Party to inspect the Property is pure obstruction with no legal justification.” (Mot. at p. 9:20-10:1.) 360 Capital asserts that Plaintiffs “did not raise any objections…nor did it provide any reason for any inability to comply with the inspection…” (Mot. at p. 9:11-13.)

            In their opposition, Plaintiffs assert that “Plaintiffs’ Response to the Amended Demand complied with Section 2031.220 of the Code of Civil Procedure in that Plaintiffs agreed to allow the inspection in part…Plaintiffs agreed to the inspection provided it did not continue from day to day, that no destructive testing take place, that Defendant first disclose the type of testing or sampling requested (and obtain Plaintiffs’ consent), and that a standard personal injury release

be signed…These were all appropriate, reasonable and justifiable limitations.” (Opp’n at p. 7:18-23.) Plaintiffs further assert that “[s]ince Defendants demanded to inspect a construction site which was incomplete and posed significant dangers, Plaintiffs’ counsel simply requested that, out of an abundance of caution, each participant sign a personal injury release form…” (Opp’n at p. 7:25-28.) However, Plaintiffs do not appear to provide any legal authority in the opposition supporting the statements made in the response that “Plaintiffs will only allow a visual, non-invasive inspection,” that “[s]hould Defendant desire to perform any testing or sampling of the Property, Defendant must first disclose to Plaintiff’s counsel the type of testing or sampling requested and obtain Plaintiff’s counsel’s written permission before doing so,” and that “[b]efore the inspection…and before entering onto the Property, any person taking part in the inspection must sign, date and return to Plaintiffs’ counsel the attached Release…” (Woo Decl., ¶ 7, Ex. E.)[2]

            360 Capital notes that Code of Civil Procedure section 2031.010, subdivision (d) provides that “[a] party may demand that any other party allow the party making the demand, or someone acting on the demanding party’s behalf, to enter on any land or other property that is in the possession, custody, or control of the party on whom the demand is made, and to inspect and to measure, survey, photograph, test, or sample the land or other property, or any designated object or operation on it.” 360 Capital asserts that “[t]he heart of the dispute in this action is alleged nonconforming construction of various structures on Plaintiffs’ Property. The inspection of the Property is paramount in ascertaining what exactly is purportedly nonconforming and what scope of construction is still remaining to complete, if any.” (Mot. at p. 9:16-19.) In the FAC, Plaintiffs allege, inter alia, that “[i]n violation of their duties to Plaintiff, Defendants so carelessly and negligently constructed, modified, inspected, repaired, or performed work and services at the Property as to proximately cause resulting damage to the Property as alleged in this Complaint.” (FAC, ¶ 24.) Plaintiffs do not appear to dispute that 360 Capital has demonstrated good cause for the requested site inspection.

            Based on the foregoing, the Court finds that 360 Capital has demonstrated good cause for a further response to its Amended Demand for Site Inspection.

C.     Requests for Sanctions

Code of Civil Procedure section 2031.310, subdivision (h) provides that “[e]xcept as provided in subdivision (j), the court shall impose a monetary sanction under Chapter 7 (commencing with Section 2023.010) against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel further response to a demand, 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.” The Court finds that Plaintiffs have acted with substantial justification in presenting their position and thus declines to award sanctions against them. The Court also denies Plaintiffs’ request for sanctions against 360 Capital.  

Conclusion

Based on the foregoing, 360 Capital’s motion is granted. The Court orders Plaintiffs to provide a further response to 360 Capital’s Amended Demand for Site Inspection, within 30 days.

360 Capital’s and Plaintiffs’ requests for sanctions are denied.

360 Capital is ordered to give notice of this Order.¿ 

DATED:  October 5, 2023                             

________________________________

Hon. Rolf M. Treu

Judge, Los Angeles Superior Court