Judge: Theresa M. Traber, Case: 20STCP01943, Date: 2022-10-10 Tentative Ruling

Case Number: 20STCP01943    Hearing Date: October 10, 2022    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     October 10, 2022                   TRIAL DATE: NOT SET

CASE:                         Ofek Rachel, Ltd., et al. v. Suki Ben Zion

CASE NO.:                 20STCP01943           

APPLICATION FOR ORDER TO SHOW CAUSE WHY RESPONDENT CHAIM COHEN SHOULD NOT BE HELD IN CONTEMPT OF COURT

MOVING PARTY:               Petitioners Ofek Rachel, Ltd. and M.M.N. Yad David USA, Ltd.

RESPONDING PARTY(S): Non-party Respondent Chaim Cohen

CASE HISTORY:

• 06/17/20: Petition to Quash Service of Subpoena and Protective Order filed.
• 01/13/21: Petition to Quash Service of Subpoena and Protective Order Granted
• 03/19/21: Petition of Judgment Creditors for Order Directing Compliance with Deposition Subpoena and Subpoena for Production of Business Records filed.
• 04/19/21: Petition granted in part.
• 02/09/22: Second Petition of Judgment Creditors for Order Directing Compliance with Subpoena filed.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

            Plaintiffs Ofek Rachel Ltd. and M.M.N. Yad David USA Ltd. obtained a judgment against Defendant Suki Ben Zion in a New York case based on a previous money judgment entered in their favor in Israel.

            Petitioners move for the Court to set a hearing on an order to show cause why Respondent should not be held in contempt of court.

TENTATIVE RULING:

            Petitioners’ Application for an Order to Show Cause Why Respondent Chaim Cohen Should Not Be Found in Contempt of Court is GRANTED.

            The Court sets this matter to be heard on November 18, 2022.

DISCUSSION:

            Petitioners move for the Court to set a hearing on an order to show cause why Respondent should not be held in contempt of court.

Legal Standard

            Contempt is any act, in or out of court, “which tends to impede, embarrass or obstruct the court in the discharge of its duties.”  (In re Shortridge (1893) 99 Cal. 526, 532.)  Particular acts constituting contempt are enumerated by statute, including:¿ “(d)isobedience of any lawful ... order, or process of the court”;¿ “(d)isobedience of a subpoena duly served”; “refusing to ... answer as a witness”;¿ “(d)isorderly, contemptuous, or insolent behavior toward the judge while holding the court, tending to interrupt the due course of ... trial.” (Code Civ. Proc., § 1209(a); see also Code Civ. Proc. § 1991 [disobedience of subpoena]; and Pen.C. § 166 [misdemeanor].)  In addition, courts have inherent power to punish acts that interfere with the orderly conduct of proceedings.  (Code Civ. Proc., § 128(a)(3); In re Buckley (1973) 10 Cal.3d 237, 247.)  Any person who commits a contemptuous act may be punished for contempt, which includes attorneys (Hallinan v. Superior Court (1925) 74 Cal.App. 420, 426 [persisting in arguing objections after repeated warnings by judge]; Hanson v. Superior Court (2001) 91 Cal.App.4th 75, 84-85 [attorney misconduct during closing argument]) and parties (In re Coleman (1974) 12 Cal.3d 568, 573 [labor union violated temporary restraining order]). 

The contempt at issue is “indirect,” which requires a more elaborate procedure to notify the person(s) sought to be charged and to allow him or her an opportunity to be heard.  (Code Civ. Proc., §§ 1211–1218; see also Hanson v. Superior Court, supra, 91 Cal.App.4th at p. 81.)  “An affidavit must be presented to the court stating the facts constituting the contempt, an order to show cause must be issued, and hearing on the facts must be held by the judge.”  (Arthur v. Superior Court (1965) 62 Cal.2d 404, 407-408.)  Since the acts involved did not occur in the court’s presence, the affidavit (declaration) must cover each element of the commission of the contempt.  (Code Civ. Proc., § 1211.5.)  This affidavit serves as the “complaint” in indirect contempt proceeding (Lyon v. Superior Court (1968) 68 Cal.2d 446, 452) and must contain factual allegations based on firsthand knowledge. 

In indirect contempt proceedings based on disobedience of a prior court order, a valid judgment must meet “strict requirements.”¿ Each of the following must be established: (1) the rendition of a valid court order; (2) actual knowledge of the order; (3) ability to comply; and (4) willful disobedience of the order.  (Conn v. Superior Court (1987) 196 Cal.App.3d 774, 784 [repeated failures to turn over documents as ordered].)  Upon receipt of the affidavit, the court usually issues an order to show cause (OSC) why the person should not be held in contempt.  (Code Civ. Proc., § 1212.) Although not required, the alleged contemnor may respond to the affidavit and OSC by counteraffidavits or declarations.  These affidavits serve as the “answer” to the charging allegations in the original affidavit. (Lyon v. Superior Court, supra, 68 Cal.2d at p. 452.)  Such affidavits are not mandatory, however. The alleged contemnor may assert his or her defenses entirely at the hearing.  (Code Civ. Proc., § 1217.) 

Analysis

            On March 11, 2022, the Court entered an Order granting Petitioners’ Second Petition for Order Directing Compliance with Subpoena for Production of Business Records. (Declaration of Theodore H. Dokko ISO Mot. ¶ 2, Exh. A.) That order stated:

“Respondent is ordered to conduct an examination of his redactions [to documents already produced] to ensure that only Cohen’s own charges have been redacted from the credit card statements and other documents. Respondent is ordered to produce documents in response to document requests 3, 8, 9, 10 and 12 but applying the same 6-year scope stated in connections with other document requests. Respondent is to produce the American Express statements identified as missing in Petitioner’s moving papers and any documents reflecting payments made on the credit card statements that have been or will be produced. Respondent is to produce the Court-ordered responsive records, without objections, within 30 days of the date of this Order.

(Id.)

            Respondent requested an extension to May 2, 2022 to provide the required responses, citing a need to obtain clean copies of American Express statements to comply with the Court’s order. (Id. ¶ 4, Exh. 2.) However, when Petitioners queried if the production would include other documents, no response was given. (Id. ¶ 5, Exh. C.) On April 8, 2022, Respondent served his Third Supplemental Response to Petitioners’ Subpoena for Production of Business Records, producing no documents and stating that no responsive documents have ever existed as to requests 3, 8, 9, 10, and 12. (Id. ¶ 6 Exh. D.)

            It is not disputed that the Court’s March 11, 2022 order was valid, or that Respondent had knowledge of that order. However, Respondent contends that Petitioners have not shown that Respondent is able to comply with the Court’s order and has not done so. This contention is incorrect. Petitioners offer evidence by reference to the Second Petition for Order Compelling Compliance, in connection with which, Petitioners produced substantial evidence of transactions not documented in the discovery previously provided and which Petitioners had reason to believe should have been documented. (See Dokko Decl. ¶¶ 16-19.)

            Here, as in connection with the Second Petition for Order Compelling Compliance, Respondent offers no explanation for why these documents, which reasonably should exist, do not. Indeed, Respondent concedes that there are documents which fall precisely within the scope of the requested documents, specifically referencing payments to the Ishimibayev Law Firm in 2017, which were not produced in response. (Cohen Declaration ISO Opp. ¶ 8.)

Cohen’s Supplemental Production

            On August 24, 2022, the day before this matter was originally scheduled to be heard, Respondent provided supplemental responses to Petitioners. The Court therefore ordered the parties to meet and confer and review Respondent’s production to determine whether the produced materials satisfied Respondent’s obligations.

            Petitioner contends that the production is not satisfactory. The produced credit card statements do not span the entirety of the six-year time span for which the Court ordered production. Respondent has only produced credit card statements dating back to January 2017, and bank statements dating back to January 2016, despite the Court’s order to produce documents within the six-year timespan designated in Petitioner’s document requests—namely, from February of 2015 forward. (See Dokko Decl. Exh. A; see also Supplemental Declaration of Theodore Dokko ISO Mot Exhs. 1-4.) Petitioner also contends that the documents contain inconsistent redactions and do not show charges identified in the evidence produced by Petitioner in connection with the Motion to Compel Compliance. Further, the Chase Bank and American Express statements list payments to the other institution that are not reflected in the statements produced, such that, for example, payments made from the Chase Bank account to American Express are not reflected in the American Express statements produced, while there are also payments made to the American Express card that are not reflected in the Chase Bank statements. (See Dokko Supp. Decl. Exhs 1, 2.) Petitioner argues that these discrepancies are clear evidence that Respondent has other sources of payment for the American Express card for which statements were produced, and that Respondent has other American Express cards for which statements were not produced.

            In opposition, Respondent contends that Petitioners have failed to carry their burden to justify this motion. Respondent argues that, first, the missing credit card and bank statements were not produced because they did not contain information responsive to the subpoena. Respondent characterizes the inconsistent redactions and the discrepancies in payments in the credit card and bank statements as human error, and maintains that the missing charges which Petitioners contend must exist simply were never made. Respondent argues that Petitioner has no evidence for the assertion that records reflecting the Sukis’ charges or the payment to the Ishimbayev Law Firm must exist, despite Petitioners directly citing the evidence in support of their claims in their moving papers and referencing that evidence in the supplemental brief.

            The Court is not persuaded by Respondents’ arguments. First, Petitioners, in reply, produced Respondent’s Third and Fourth document productions, which contained 2017 American Express card statements by the Sukis, and 2016 bank statements showing payments to American Express. (Supplemental Declaration of Theodore Dokko ISO Supp. Reply Exh. A.) In addition, although some inconsistencies in the redactions might have been the result of human error by themselves, Petitioners have produced evidence of credit card and bank records which should exist that reflect charges which other witnesses testified to under penalty of perjury. In the context of this evidence, the Court does not find Respondent’s supposition that the discrepancies are the product of human error compelling.

            The Court therefore finds that Petitioners have stated a prima facie basis for contempt. 

Requests for Sanctions

            Petitioners request that the Court impose a fine on Respondent in the amount of $1,000 or imprisonment up to 5 days pursuant to Code of Civil Procedure section 1218, and that the Court order Respondent to pay reasonable attorney’s fees and costs. Section 1218(a) only authorizes such punishment after the Court has taken all evidence in the contempt proceeding and found a party guilty of contempt. As this is a motion on whether the Court should order a hearing on whether Respondent should be found in contempt of Court, the requested relief is not proper at this juncture.

CONCLUSION:

            Accordingly, Petitioners’ Application for an Order to Show Cause Why Respondent Chaim Cohen Should Not Be Found in Contempt of Court is GRANTED.

            The Court sets this matter to be heard on November 18, 2022.

            Moving Parties to give notice.

IT IS SO ORDERED.

Dated: October 10, 2022                                 ___________________________________

                                                                                    Theresa M. Traber

                                                                                    Judge of the Superior Court

            Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.