Judge: Virginia Keeny, Case: LC106864, Date: 2023-01-13 Tentative Ruling

Case Number: LC106864    Hearing Date: January 13, 2023    Dept: W

lucky’s two-way radios, inc. et al., v. cannata

plaintiff’s request for sanctions and motions to compel further discovery

Date of Hearing:        January 13, 2023                               Trial Date:       March 13, 2023

Department:              W                                                        Case No.:        LC106864

BACKGROUND

Plaintiffs Lucky’s Two-Way Radios, Inc. and Buddy Corporation (“LTWR”) allege that Frank J. Cannata (“Cannata”) was a consultant for Plaintiffs’ business pursuant to a consulting services agreement. While consulting for Plaintiffs, Cannata allowed or arranged for valuable company property to be taken by “Mr. Recycling” without Plaintiffs’ consent. Plaintiff further claims that on December 8, 2017, Cannata improperly transferred proprietary information via e-mail to personal accounts. Plaintiff alleges a loss of $500,000 in property.

Plaintiffs filed a complaint on February 13, 2018. The Second Amended Complaint (“SAC”) was filed on August 7, 2020, alleging: (1) Breach of Contract; (2) Conversion; (3) Breach of Fiduciary Duty; (4) Fraud and Fraudulent Concealment; (5) Specific Performance; and (6) Permanent Injunction

On March 29, 2019, the court granted Cannata’s motion for leave to file a cross-complaint. Cannata filed the first amended cross-complaint against Plaintiffs Lucky’s Two-Way Radios, Inc. and Buddy Corporation on April 10, 2019.

Cannata filed a second amended cross-complaint (“SAXC”) on August 2, 2019. The SAXC against Cross-Defendants alleges several causes of action including breach of contract, indemnity, labor code retaliation and wage and hour violations, false pretenses, fraud, battery, stored communications violations, trespass, and unfair competition.

On October 13, 2020, default was entered against Defendant because he failed to file an answer to the SAC. Default was set aside and vacated on December 17, 2020.

[Tentative] Ruling

I.                    Plaintiffs/Cross-Defendants Lucky’s Two Way Radios Inc. and Buddy Corporation’s Request for Sanctions is DENIED

II.                  Plaintiffs’ Motion to Compel Cannata’s Further Responses to Special Interrogatories (Set Ten) and Motion to Compel Cannata’s Further Responses to Request for Production of Documents (Set Eight) is GRANTED, in part

discussion

I.                    PLAINTIFFS/CROSS-DEFENDANTS LUCKY’S TWOWAY RADIOS INC. AND BUDDY CORPORATION’S REQUEST FOR SANCTIONS

On October 24, 2022, Plaintiffs filed an ex parte application seeking an order that Cannata attend his properly noticed depositions at the Law Offices of Bradley, Gmelich & Wellerstein, LLP on October 31 and November 11, 2022. Plaintiff also sought monetary sanctions in the sum of $3,035.00 against Cannata and his counsel of record, Levi Lesches, Esq. for their ongoing misuse and abuse of the Code of Civil Procedure and Discovery Act. The court granted Plaintiffs’ ex parte application and set the request for sanctions for hearing.

“The 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.” (CCP §2023.030(a).)

The award of sanctions is further authorized by a motion to compel deposition. (CCP §2025.450(g)(1).) If a motion under 2025.450 is granted, the court shall impose a monetary sanction in favor of the party who noticed the deposition and against the deponent or the party with whom the deponent is affiliated, unless the court finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.

Plaintiffs argue despite their counsel’s extraordinary effort to try to work with Mr. Lesches in an effort to avoid this motion, neither Mr. Lesches nor Mr. Cannata have a valid reason for refusing to attend the deposition set on October 20, 2022. Specifically, after several months of going back and forth attempting to set Mr. Cannata’s deposition, Plaintiffs acquiesced to the October 20, 2022 – the date that Mr. Lesches insisted upon. However, several days before the deposition date, Mr. Lesches notified Plaintiffs’ counsel Cannata would not be attending the hearing. Plaintiffs contend Mr. Cannata instead attended the Soweto Gospel Choir at the Irvine Barclay Theater. Even after receiving Mr. Cannata’s untimely objection, Plaintiffs contend they sought to work with Mr. Cannata and Mr. Lesches to re-set the deposition date. However, Mr. Lesches was unhappy with some of the language of the Stipulation to re-set the deposition date and Plaintiffs thought the ex parte application was necessary. Plaintiffs believed Mr. Lesches was simply seeking to delay things yet again and the ex parte application became unavoidable.

In opposition, Cannata argues he was willing to stipulate to all the relief that Plaintiffs were seeking regarding the new deposition date. Cannata contends, however, Plaintiffs attempted to bootstrap a document dispute to the stipulation and Cannata rightfully would not waive his position regarding the documents. Moreover, Cannata contends the Soweto Gospel Choir is a red herring. Mr. Lesches admitted he made a scheduling error and apologized for any inconvenience caused. Upon notifying Plaintiffs of the error, Mr. Lesches offered to stipulate to new dates.

The court finds sanctions are not warranted at this time. While Cannata’s reasons for not being able to attend the October 20, 2022 deposition is disconcerting, the court finds Cannata did not refuse to attend the deposition in bad faith. The State Bar of California Attorney Guidelines of Civility and Professionalism provides that “[a]n attorney should delay a scheduled deposition only when necessary to address scheduling problems and not in bad faith.” (State Bar of California Attorney Guidelines of Civility and Professionalism § 9(a)(2).) Mr. Lesches states the scheduling conflict was his error and was willing to work with Plaintiffs to reset the deposition for a time Cannata was available. While the parties could not agree to a stipulation, Cannata has demonstrated he was willing to stipulate to the new deposition date outside of the added stipulation regarding documentation. The court believes the rescheduling was not done in bad faith and necessary as Cannata had already informed counsel he was unavailable that date. Whether Irvine is “out of town” and whether Cannata could have rescheduled his meeting with a friend/concert to attend the deposition is without consequence. Again, Plaintiffs have not demonstrated Cannata engaged in the misuse of discovery by asking to reschedule the deposition date and Cannata acted with substantial justification.

Accordingly, Plaintiffs’ request for monetary sanctions is denied.

II.                  PLAINTIFFS’ MOTION TO COMPEL CANNATA’S FURTHER RESPONSES TO SPECIAL INTERROGATORIES (SET TEN) AND MOTION TO COMPEL CANNATA’S FURTHER RESPONSES TO REQUEST FOR PRODUCTION OF DOCUMENTS (SET EIGHT)

Plaintiffs move this court for an order compelling Cannata’s further responses to Plaintiffs’ Special Interrogatories (Set Ten) and Request for Production of Documents (Set Eight). Plaintiffs made the motion on the basis Cannata served boilerplate objections.

On December 30, 2022, Cannata served further verified responses to the discovery at issue. (Lesches Decl. ¶13.) Plaintiffs argue, however, the issue of sanctions remains at issue and the court should order them in full.

Plaintiffs request monetary sanctions against Mr. Cannata, and his counsel of record, Levi Lesches, Esq., jointly and severally, in the sum of $3,885.00 for having to bring their Motion to Compel Further Responses to Special Interrogatories (Set Ten) and $3,460.00 having to bring their Motion to Compel Further Responses to Request for Production of Documents (Set Eight).

Cannata argues the request for sanctions should be denied as Plaintiffs filed this motion during the meet and confer process. Moreover, there is nothing to support Plaintiffs’ contention regarding supposed “boilerplate” objections. Cannata contends he made detailed, request-specific, and appropriate initial objections, contending that the discovery sought information pertained to issues that were not contentions in the litigation.

The court finds sanctions warranted. Even if Cannata believed the scope of the IME was still in dispute and as such, his objections were proper at the time of serving them, the order for the IME to proceed was held November 9, 2022. This was a month and a half before Cannata served supplemental responses to the discovery requests. As a result, the court finds Cannata did not act with substantial justification in opposing this motion.

Plaintiffs request $3,885.00 for having to bring their Motion to Compel Further Responses to Special Interrogatories (Set Ten). This includes four hours meeting and conferring and preparing the motion as well as 4 hours reviewing Cannata’s opposition and preparing a reply to the opposition, one hour attending the hearing, and an additional $60 filing fee. Plaintiffs’ counsel hourly rate is $425 an hour. Plaintiffs also request $3,460.00 for having to bring their Motion to Compel Further Responses to Production of Documents (Set Eight). This includes four hours meeting and conferring and preparing the motion as well as 4 hours reviewing Cannata’s opposition and preparing a reply to the opposition, and an additional $60 filing fee.

The court grants Plaintiffs’ request in the reduced amount of $2,185.00 for having to bring their Motion to Compel Further Responses to Special Interrogatories (Set Ten). The court finds the hours spent meeting and conferring with Mr. Lesches is part of Plaintiffs mandatory obligation. As such, the court awards sanctions for two hours preparing the motion, 2 hours reviewing the opposition and preparing the reply, one hour attending the hearing, and $60 filing fee. The court further grants Plaintiffs’ request for sanctions in the reduced amount of $485 for having to bring their Motion to Compel Further Responses to Production of Documents (Set Eight). The court awards sanctions for 1 hour preparing the motion as only one of the requests was in dispute and largely similar to the first motion and the $60 filing fee. Cannata filed a single opposition to the two motions and Plaintiffs prepared a combined reply.

Sanctions payable by Cannata and his attorney, jointly and severally, within 30 days.