Judge: Yolanda Orozco, Case: 19STCV12018, Date: 2022-10-18 Tentative Ruling
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Case Number: 19STCV12018 Hearing Date: October 18, 2022 Dept: 31
MOTION FOR TERMINATING OR OTHER SANCTIONS IS GRANTED, IN PART
Background
On April 8, 2019, Plaintiffs Julie Scully and Michael Scully (collectively “Plaintiffs” or “the Skullys”) commenced this action by filing their initial Complaint.
On April 15, 2012, Plaintiffs filed the operative Second Amended Complaint (“2AC”), which asserts causes of action for legal malpractice and breach of fiduciary duty against Clark Hill PLC, formerly Morris Polich & Purdy, LLP (“CH”) and James C. Earle (“Earle”) (collectively “Defendants”).
On October 15, 2019, CH filed a Cross-Complaint against Plaintiffs asserting causes of action for breach of contract, account stated, open book account, and work labor and services provided.
On September 26, 2022, Defendants filed this Second Motion for Terminating Sanctions.
Plaintiffs filed opposing papers on October 5, 2022.
On October 11, 2022, Defendants filed a reply.
Legal Standard
Code of Civ. Pro (CCP) section 2023.030 permits the Court to impose terminating sanctions for discovery misuses, which are defined by CCP section 2023.010 to include the failure to respond to an authorized method of discovery and the failure to comply with a Court discovery order. The Discovery Act defines misuse of discovery as including (1) a failure to respond or to submit to an authorized method of discovery (id. § 2023.010, subd. (d)) and (2) disobedience to a court order to provide discovery (id., subd. (g)).
Under California law, a discovery order cannot go further than is necessary to accomplish the purpose of discovery.¿ (Newland v. Superior Court (1995) 40 Cal. App. 4th 608, 613.) The purpose of discovery sanctions is to prevent abuse of the discovery process and correct the problem presented.¿ (McGinty v. Superior Court (1994) 26 Cal. App. 4th 204, 210.)¿
In addition, an order imposing terminating sanctions must be preceded by the disobedience of an order compelling a party to do that which the party should have done in the first instance.¿ (Kravitz v. Superior Court (2001) 91 Cal. App. 4th 1015, 1021.)¿ Accordingly, there are grounds for terminating sanctions when a party fails to comply with discovery and fails to comply with Court orders regarding discovery.¿
JUDICIAL NOTICE
Plaintiffs’ request Judicial Notice of the following:
Court’s Tentative Ruling, dated September 10, 2021, which became its final order, a true and correct copy of which is attached hereto as Exhibit A.
Plaintiffs’ request for Judicial Notice is GRANTED under Evidence Code section 452 subdivision (d)(2).
Discussion
Defendants seek terminating sanctions, issue sanctions, or evidentiary sanctions against Plaintiffs. In addition, Defendants seek $75,090.00 in monetary sanctions against the Skullys and their counsel of record.
Defendants’ motion is brought on the grounds that the Plaintiffs have engaged in extensive and persistent discovery abuses by willfully and intentionally failing to comply with six Court Orders:
1) Court Order of August 25, 2021.
2) Court Order of August 27, 2021.
3) Court Order of September 10, 2021.
4) Court Order of September 17, 2021.
5) Court Order of September 27, 2021.
6) Sanctions not paid pursuant to the September 10, 2021, and September 27, Order for sanctions in the amount of $3,300.00.
7) Court Order of May 18, 2022, and Order to pay sanctions in the amount of $6,420.00.
In response to the May 18, 2022, Court Order, the Plaintiffs served responses on June 17, 2022, which, according to Defendants, remain deficient and expose ongoing concealment of critical documents and key evidence.
Plaintiffs assert that on June 17, 2022, they served code-compliant responses and compliant with the Court’s prior orders by identifying responsive documents by specific bates numbers in each response based on counsel’s review of each of the documents produced in this case. (Frank Decl. ¶ 3, Ex. 1 to 12, see also Plaintiff’s Opposing Separate Statement.) Defendants disagree.
a. Documents Relating to Engineer Dale Kessler
Plaintiffs assert that on June 17, 2022, Plaintiff produced limited documents relating to engineer Dale Kessler whose identity was not previously disclosed and produced only in response to this Court’s May 18, 2022 Order. Plaintiffs do not explain why the documents were not previously disclosed despite over three years of litigation.
Marilyn Klinger was the Skullys counsel during the Green Scene Case (LASC Case No. SC124303.) Ms. Klinger asserts that Dale Kessler was hired as a consultant in the Green Scene case, and he only provided two written reports, SCULLY 0083819-21 and SCULLY 0083841-42. (Klinger Decl. ¶ 4, Ex. A-B.) As to the John Crystal Pools documents, Plaintiffs assert that they have produced the Final Home Improvement Contract (SCULLY 0083752-67).
Defendants assert that from Ms. Klinger’s billing invoices and other documents relating to bids from John Crystal Pool (“JPC”) are referenced in Ms. Klinger’s billing invoices but have not been produced:
· 10/2/2018 “Review and evaluate Dale Kessler, structural pool engineer, report and recommendations re Scully pool and correspondence with Scully re “Redacted.” (SCULLY 0083324.)
· 10/9/2018 “Review John Crystal Pools preliminary proposal re repair/completion of Scully pool, spa, and deck. (Id.)
· 10/9/2018 “Follow up correspondence with John Crystal Pools re status of recommendations and proposal re repair/completion of Scully pool, spa, and deck.” (SCULLY83329.)
· 10/10/2018 “Evaluate correspondence from John Crystal Pools re scope of proposed pool completion work.” (Id.)
· 10/10/2018 “Read John Crystal Pools and Dale Kessler correspondence re engineer report re Scully property and Kessler structural engineering proposal.” (SCULLY 83330.)
· 10/10/2018 “Evaluate Dale Kessler’s proposal with respect to structural repair of pool, spa and retaining wall.” (Id.)
· 10/11/2018 “Evaluate correspondence from expert Randy Beard re American Geotechnical pool in potential issues with respect to proposed repair.” (Id.)
· 10/12/2018 “Conference call with John Crystal Pools and Kessler Engineering re recommended alternative fix for pool and spa area.” (Id. 83331.)
· 10/12/2018 “Correspondence with John Crystal Pools and engineer Dale Kessler re telephone conference re proposal re repair and completion of Scully pool, spa, and deck.” (Id.)
· 10/12/2018 “Correspondence with engineer Dale Kessler re piles to reinforce Scully pool deck.” (Id.)
· 10/12/2018 “Evaluate correspondence from the Scully’s non-testifying pool repair and engineer consultants re scope of repairs proposed and structural issues.” (Id. 83331-32.)
Plaintiffs assert that the documents in their possession, custody, or control have been produced but do not state if a diligent search and reasonable inquiry for the above documents was done or assert that such documents do not exist. Defendants deny that these documents have been produced. Moreover, Defendants assert that it is false that Plaintiffs have produced the JPC Final Home Improvement Contract.
b. Text Messages from Julie Scully to Randy Beard
Defendants assert that after the deposition of Randy Beard, Beard produced text messages between Plaintiff Julie Skully and Randy Beard regarding the repair estimates, a key issue in this litigation. Accordingly, Defendants could not depose Beard as to the text messages. Plaintiffs’ SAC alleges that “Defendants failed to disclose the finding and repair costs estimates of Rendy Beard” and “Defendants concealed Randy Beard’s repair estimates from the Skullys.” (SAC ¶ 15.)
The text messages reveal that Plaintiffs’ verified discovery responses that the estimate by Randy Beard was unknown are knowingly false. Defendants also argue that Julie Skully’s allegation that her failure to reveal the text messages was inadvertent and that she did not intentionally conceal the text message or avoided producing it is without merit because she had the obligation to conduct a diligent search, including on her prior cell phones, before representing that such messages did not exist. (Skully Decl. ¶ 2.) Moreover, Julie Skully’s declaration fails to attest that she has in fact conducted a diligent search and reasonable inquiry regarding further evidence that may be located in her other phones. Such disregard for the discovery process is intentional and warrants terminating sanctions when the evidence supports the finding that the Skullys may have destroyed evidence by failing to preserve the text messages. (See Williams v. Russ (2008) 167 Cal.App.4th 1215, 1224–1225.)
Defendants also assert that Plaintiffs have refused to produce all documents related to Randy Beard, including emails produced by Beard at his deposition, documents identified in Ms. Klinger’s invoices, and documents related to Beard’s deposition in the underlying action. (See Compendium of Evidence Ex. Y, Z.) Plaintiffs do not explain why such documents were not produced or if claims of privilege apply to all of the documents sought.
The Skullys argue that they have no obligation to voluntarily update their discovery responses under the Code of Civil Procedure sections 2030.070 and 2031.050. Nevertheless, Plaintiffs reserved the right to supplement, amend, and/or modify their responses yet they never did, and had the obligation to correct any false or incorrect discovery responses they had previously served. Defendants assert that the Skullys signed eight verifications swearing to have produced all responsive documents, including all communications between Scully and Beard. (Tabatabai Supp. Decl. ¶ 4-5.) The fact that Defendants have now uncovered the existence of the text messages and possibly other evidence, does not negate the fact that Plaintiffs failed to comply with discovery or that the Defendants suffered prejudice due to the delay in obtaining the evidence and being deprived of the possibility of filing dispositive motions that could have resulted in having the case dismissed on the merits. “One of the principal purposes of the Discovery Act is to enable a party to obtain evidence in the control of his adversary in order to further the efficient, economical disposition of cases according to right and justice on the merits. (Citations.)” (Caryl Richards, Inc. v. Superior Court in and For Los Angeles County (1961) 188 Cal.App.2d 300, 303 [italics original].) Plaintiffs deprived Defendants of this opportunity by failing to timely and sufficiently comply with discovery requests.
c. Invoices of Ms. Klinger and Mr. Miller
Plaintiffs assert that the billing statement showing the work subsequent counsel did to mitigate the alleged malpractice by Defendants should be left for a later date is meritless when the issue goes to the heart of this case and the entries do not appear to be subject to the litigation privilege since they are not listed in the privilege log. Therefore, there is no reasonable explanation as to why such information has not been provided in response to Defendants’ discovery demands. Lastly, the fact that Plaintiffs allege that all documents they will use to prove their claims have been produced is utterly irrelevant as they are obligated to produce all relevant documents which are responsive to Defendants’ document demands, especially documents that contradict Plaintiffs’ claims.
For the reasons stated above, the Court finds that some form of sanctions are appropriate since prior Court Orders and monetary sanctions orders have been insufficient to ensure Plaintiffs’ compliance with the discovery process. (See Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967, 993 [“Each degree of sanctions had failed. The trial court and discovery referee had been remarkably moderate in dealing with Bentley, ultimately imposing only a form of issue sanction after repeated violations of discovery orders that would have justified terminating sanctions.”].)
Accordingly, the following issue and evidentiary sanctions are ORDERED:
· Plaintiffs shall be precluded from presenting evidence or argument that in the Green Scene Matter Defendants concealed from Plaintiffs any cost estimate for the repair of the Property from Randy Beard.
· Plaintiffs shall be precluded from offering any evidence or argument that Defendants engaged in unprofessional or antagonistic conduct with opposing counsel.
In addition, Plaintiffs are ordered to make Randy Beard available for deposition at their cost and must produce all documents previously requested by Defendants up to the date Plaintiffs retained Mr. Beard as in expert in this case.
Defendants seek monetary sanctions and represent that Farzad Tabatabai spent 60.00 hours preparing this motion billed at a rate of $575.00 per hour and that Richard Miyamoto spent 82.00 hours at a billing rate of $495.00 per hour on drafting and preparing this motion, including declarations and separate statement. (Tabatabai Decl. ¶¶ 88-92.) In total, the Defendants request $75,090.00 in monetary sanctions.
The Court agrees that sanctions are appropriate but finds the requested amount excessive and therefore unreasonable. The Court instead GRANTS sanctions in the amount of $37.545.00 for 30.0 hours of work by Mr. Tabatabai and 41.0 hours of work by Mr. Miyamoto.
· (30.0 hours x $565.00 = $17,250.00) and (41.0 hours x $495.00 = $20,295.00)
Conclusion
Defendants’ Motion for Terminating Sanctions is GRANTED, IN PART as indicated above.
Monetary sanctions in the amount of $37.545.00 are GRANTED.
Defendants to give notice.