Judge: Thomas Falls, Case: 20PSCV00361, Date: 2022-07-27 Tentative Ruling

The Court may change tentative rulings at any time. Therefore, attorneys are advised to check this website to determine if any changes or updates have been made to the tentative ruling. Counsel may submit on the tentative rulings by calling the clerk in Dept. R at 909-802-1117 before 8:30 the morning of the hearing.

Case Number: 20PSCV00361    Hearing Date: July 27, 2022    Dept: R

Cathay Bank v. National Progressive, Inc. et al. (20PSCV00361)

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Defendants National Progressive, Inc.’s and Tony Hsu’s Motion to Compel Further Written Response and the Documents Sought in Request for Production, Set No. Two Against Plaintiff Cathay Bank and for Monetary Sanctions of $1,860 against Plaintiff

            Responding Party: Plaintiff, Cathay Bank

Tentative Ruling

Defendants National Progressive, Inc.’s and Tony Hsu’s Motion to Compel Further Written Response and the Documents Sought in Request for Production, Set No. Two Against Plaintiff Cathay Bank and for Monetary Sanctions of $1,860 against Plaintiff is DENIED.

Monetary Sanctions are Imposed on Defendants and Defense Counsel in the amount of $1,375.00.

Background

This case arises from Defendant National Progress Inc.’s purported default of a promissory note.

On June 2, 2020, Plaintiff Cathay Bank filed suit against Defendants National Progressive Inc., Tony Hsu (the guarantor on the commercial loan), and Does 1 through 100 for:

1.      Breach of Promissory note,

2.      Breach of Guarantee,

3.      Foreclosure of Security Agreement, and

4.      Money Lent

On December 2, 2020, the court granted Defendants’ ex-parte application to Set Aside Default and Default Judgment.

On December 2, 2020, Defendants answered.

On January 5, 2022, the court granted Defense Counsel Carlo C. Ignacio’s Motion to Be Relieved as Counsel for Defendant National Progressive Inc.

On May 13, 2022, the court issued the following ruling: The Motion to Compel Discovery (not Further Discovery) - 1 moving party, 1 motion filed by CATHAY BANK, a California Banking Corporation on 03/21/2022 is Granted. Plaintiff is awarded sanctions against defendants National Progressive, Inc. and Tony Hsu in the amount of $1,650.00.

On May 10, 2022, Defendants filed the instant Motion.

On July 14, 2022, Plaintiff filed its Opposition to the Motion.

On July 19, 2022, Defendants filed their Reply to the Motion.

Legal Standard

In the notice of motion, Plaintiff cites CCP section 2031.310 as authority. CCP §2031.31 states:

(a) On 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.

Discussion

Defendants seek records from Plaintiff of other occasions with other customers where a switch had been made from a line of credit with no fixed monthly payments to a loan with fixed monthly payments. (Motion p. 3.)

Here, neither Defendants’ motion nor the separate statement have explained how this information is at the very least relevant. Without describing the relevance of these documents, Defendants have inherently failed to comply with the requirement that the separate statement provide “[a] statement of the factual and legal reasons for compelling further responses, answers, or production as to each matter in dispute.” (Cal. Rules of Court, rule 3.1345(c)(3)) (emphasis added). 

Furthermore, a motion to compel further production must set forth specific facts showing good cause justifying the discovery sought by the inspection demand. (See Code Civ. Proc., § 2031.310(b)(1).) “Good cause” may be found to justify discovery where specific facts show that the discovery is necessary for effective trial preparation or to prevent surprise at trial. (See Associated Brewers Dist. Co. v. Superior Court (1967) 65 Cal.2d 583, 586-588; see also CCP §§ 2017.010, 2019.030(a)(1) (Information is discoverable if it is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence and it is not unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive.); Lipton v. Superior Court (1996) 48 Cal.App.4th 1599, 1611-1612 (noting a party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action, if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence).) 

Accordingly, to the extent that Defendants seek the information because “[t]he switch was based on unethical lending practices because there was no good cause for changing the terms of the obligation without reasonable explanation,” (Motion and Reply p. 3:7-9) Defendants have not explained how such an alleged unethical lending practice either is a defense to allegedly defaulting on a loan or is otherwise relevant to the instant litigation.

Therefore, absent an explanation as to why this information is needed (i.e., relevant), the court DENIES the motion.

Sanctions

Pursuant to CCP section 2031.310 subdivision (h), “the court shall impose a monetary sanction . . .  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.”

Here, as Defendants unsuccessfully made a motion, sanctions are warranted.

Counsel seeks sanctions in the amount of $1,925.00 against Defendants (seven hours at $275/hour).

Therefore, utilizing a Lodestar approach, and in view of the totality of the circumstances, the court finds that the total and reasonable amount of attorney’s fees and costs incurred for the work performed in connection with the pending motion is $1,375 (i.e., 5 hours at $275 hour).

Conclusion

Based on the foregoing, the motion is denied and, as a result, sanctions are imposed on Defendants and Defense Counsel in the amount of $1,375.00. Sanctions are payable within 30 days of the date of the hearing.