Judge: Virginia Keeny, Case: 19VECV00966, Date: 2023-05-25 Tentative Ruling
Case Number: 19VECV00966 Hearing Date: May 25, 2023 Dept: W
NOEL LUSTIG, M.D., INC., dba PSYCHIATRIC MEDICAL GROUP v. MARC L. NEHORAYAN, M.D., A PROFESSIONAL CORPORATION, et al.
PLAINTIFF NOEL LUSTIG, M.D., INC.'S MOTION TO PARTIALLY REOPEN PERCIPIENT DISCOVERY and request for sanctions
Department: W Case No.: 19VECV00966
Moving Party: Plaintiff Noel Lustig, M.D. dba Psychiatric Medical Group
Responding Party: Defendant Marc L. Nehorayan, M.D., a Professional Corporation and Marc Mehorayan, individually
BACKGROUND
Plaintiff Noel Lustig, M.D., Inc. d/b/a Psychiatric Medical Group (“PMG”) brings this case, alleging the misappropriation of receivables due PMG by Defendants Marc L. Nehorayan, M.D., a Professional Corporation (“Nehorayan Corp.”) and its principal Marc Nehorayan (“Dr. Nehorayan”). On July 10, 2019, PMG filed its original complaint. On October 25, 2022, PMG filed its second amended complaint (“SAC”) alleging: (1) breach of fiduciary duty; (2) conversion; (3) fraud; (4) breach of written contract; (5) unfair business practices; (6) unjust enrichment and constructive trust; (7) accounting; and (8) aiding and abetting breach of fiduciary duty. Plaintiff also asserted claims against Mary Fajardo, a former employee of PMG and Amy Steckdaub. Plaintiff dismissed Amy Steckdaub on January 3, 2023.
On July 28, 2020, Cross-Complainants Nehorayan Corp. and Dr. Nehorayan filed their original cross-complaint against PMG. On May 1, 2023, Cross-Complainants filed their fourth amended cross-complaint (“4ACC”), alleging: (1) conversion; (2) money had & received; (3) breach of contract; and (4) accounting.
[Tentative] Ruling
Plaintiff’s Motion to Partially Reopen Percipient Discovery is GRANTED. Plaintiff’s Request for Monetary Sanctions is DENIED.
discussion
Plaintiff/Cross-Defendant Noel Lustig, M.D., Inc. dba Psychiatric Medical Group move this Court for an order pursuant to Code of Civil Procedure section 2024.050, to partially reopen percipient discovery against Defendants and Cross-Complainants Marc L. Nehorayan, M.D., a Professional Corporation and Marc L. Nehorayan (jointly the “Nehorayan Defendants”) and Defendant Mary Fajardo. Plaintiff contends the discovery sought is regarding: (1) the new claims alleged against Defendants in the Third Amended Complaint, which are primarily based upon newly disclosed checks from 2010 through 2014 that were payable to PMG which counsel for Nehorayan Defendants represented had been deposited by Defendants into their accounts; (2) to take an additional deposition of Defendant Fajardo regarding these issues; and (3) to seek the production of specific categories of documents which are in the possession of the Nehorayan Defendants.
Except as otherwise provided, “any party shall be entitled as a matter of right to complete discovery proceedings on or before the 30th day, and to have motions concerning discovery heard on or before the 15th day, before the date initially set for trial of the action.” (CCP § 2024.020(a).) “[A] continuance or postponement of the trial date does not operate to reopen discovery proceedings” unless a motion to reopen discovery is filed and granted pursuant to Code of Civil Procedure section 2024.050. (CCP § 2024.020(b); Pelton-Shepherd Industries, Inc. v. Delta Packaging Products, Inc. (2008) 165 Cal.App.4th 1568.) Code of Civil Procedure section 2024.050 provides that “[o]n motion of any party, the court may grant leave to complete discovery proceedings, or to have a motion concerning discovery heard, closer to the initial trial date, or to reopen discovery after a new trial date has been set.” (CCP § 2024.050(a).)
“In exercising its discretion to grant or deny this motion, the court shall take into consideration any matter relevant to the leave requested, including, but not limited to…: [¶] (1) The necessity and the reasons for the discovery. [¶] (2) The diligence or lack of diligence of the party seeking the discovery or the hearing of a discovery motion, and the reasons that the discovery was not completed or that the discovery motion was not heard earlier. [¶] (3) Any likelihood that permitting the discovery or hearing the discovery motion will prevent the case from going to trial on the date set, or otherwise interfere with the trial calendar, or result in prejudice to any other party. [¶] (4) The length of time that has elapsed between any date previously set, and the date presently set, for the trial of the action.” (CCP § 2024.050(b).)
Plaintiff contends discovery should be partially reopened as the requested discovery addresses material issues in dispute, those being Defendants' deposit of PMG checks in 2010 to 2014 and failure to notify PMG or reconcile such checks. Counsel for Nehorayan Defendants has represented that he has such checks in his possession but has refused to produce them. Further, Plaintiff PMG has discovered that Defendants possess documents, which were subject to prior discovery, but were not previously produced.
Nehorayan Defendants argue PMG is seeking, by way of the instant Motion, to avoid the effect of the February 2022 Stipulation restricting non-expert discovery in this case to May 2, 2022 and seek to re-open discovery not only as to potentially thousands and thousands of additional documents sought directly from the Nehorayan Parties under the guise of only recently “discovering” their existence. Although Nehorayan Defendants are willing to reopen discovery as to Ms. Fajardo, Nehorayan Defendants request that the court hold PMG accountable for the Stipulation that it insisted on and not permit them to use their decision to add an individual Defendant late in this case as a means of evading the effect of this Stipulation. Nehorayan Defendants further contend the documents sought are either already in the possession of PMG or equally available to them. Nehorayan Defendants also contend Plaintiff did not sufficiently meet and confer prior to filing the instant Motion.[1]
The court finds the factors weigh in favor of reopening discovery. Overall, the court finds that Plaintiff has shown at least some necessity and reasons for discovery because the requested discovery is relevant as to the new claims in the TAC. Plaintiff also contends it did not discover the basis for the requested discovery until December 2022 and March 2023, after the discovery cutoff. Moreover, Defendants have not demonstrated they would be prejudiced by the reopening of discovery. Trial is set for next year. As for discovery already within Plaintiff’s possession, however, Defendants are not required to research information which is equally available to the propounding party. (Morgan v. Southern Cal. Rapid Transit Dist. (1987) 192 Cal.App.3d 976, 982, disapproved by Schwab v. Rondel Homes, Inc. (1991) 53 Cal.3d 428, 433 on other grounds.) The parties are to work together to ascertain what documents are equally available to Plaintiff via the PC Anywhere shared file system, flash drive, or publicly available. Moreover, if the records are no longer in Defendants’ possession, Defendants must provide code compliant responses stating such.
Plaintiff also requests monetary sanctions in the amount of $2,510.00 on the ground that there is no substantial justification for the Nehorayan Defendants' refusal to agree to partially reopen discovery as requested. Defendants also request monetary sanctions in the amount of $3,800.00 against PMG and its attorney, Alan Goldberg, on the grounds PMG either already has, either in its possession, or in manner equally available to it, nearly all of the information that it has requested that discovery be re-opened to obtain.
“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 extend or to reopen discovery, 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.”¿ (CCP § 2024.050(c).)¿¿¿
There being substantial justification, with merit to both sides, the court denies the requests for sanctions.