Judge Yolanda Orozco, Case 22STCV26824 2023-05-03 Tentative Ruling

Judge: Yolanda Orozco, Case: 22STCV26824, Date: 2023-05-03 Tentative Ruling

Case Number: 22STCV26824 Hearing Date: May 3, 2023 Dept: 31

PROCEEDINGS:¿ DEFENDANT’S MOTION FOR RELIEF FROM WAIVER OF DISCOVERY OBJECTIONS

MOVING PARTY:¿ Defendant Houlihan Lokey Advisors, Inc.

RESP.¿ PARTY:¿ Plaintiff Nicole Fizor

DEFENDANT’S MOTION FOR RELIEF FROM WAIVER OF DISCOVERY OBJECTIONS

TENTATIVE RULING

Defendant Houlihan Lokey Financial Advisors, Inc.’s (“HLFA”) request for relief of waiver of objections related to Plaintiff’s Form Interrogatories, Form Interrogatories-Employment, Request for Admission, and Request for Production of Documents is GRANTED.

Background

On August 17, 2022, Plaintiff Nicole Fizor filed a Complaint against Defendants Houlihan Lokey Financial Advisors, Inc. (“HLFA”); Mathew Neimann; and Does 1 to 100. The Complaint alleges causes of action for:

1) Disability discrimination;

2) Disability harassment;

3) Failure to engage in the interactive process;

4) Failure to accommodate disability;

5) Retaliation (Govt Code § 12940);

6) Retaliation (Labor Code § 1102.5);

7) Retaliation (Labor Code § 6310);

8) Failure to prevent disability discrimination, harassment, and retaliation;

9) Negligent hiring, supervision, and retention;

10) Intentional infliction of emotional distress;

11) Failure to pay owed wages and overtime;

12) Failure to provide meal and rest breaks;

13) Failure to pay wages at time of termination; and

14) Failure to maintain accurate wage statements.

On February 15, 2023, Defendant HLFA filed a motion seeking relief of waiver of objection related to Plaintiff’s Form Interrogatories, Set One; Form Interrogatories – Employment, Set One, Request for Admission, Request for Production of Documents, Set One.

On April 20, 2023, Plaintiff filed opposing papers.

Defendant HLFA filed a rely on April 26, 2023.

Legal Standard

Code of Civil Procedure, sections 2030.290, 2031.300, and 2033.280 provide that a party who fails to timely respond to interrogatories, inspection demands, and request for admission waives all objections to the interrogatories and demands, as well as any right to exercise the option to produce writings under section 2030.230 in response to the interrogatory.¿ (Code Civ. Proc., §§ 2030.290, subd. (a); 2031.300, subd. (a), 2033.380 subd. (a).)¿ The court, on motion, may relieve that party from its waiver on the court’s determination that: (1) the party has subsequently served a response that is in substantial compliance with the Discovery Act, and (2) the party’s failure to serve a timely response was the result of mistake, inadvertence, or excusable neglect.¿¿(Code Civ. Proc., §§ 2030.290, subd. (a); 2031.300, subd. (a).)¿

Discussion

Defendant Houlihan Lokey Financial Advisors, Inc. (“HLFA”) seeks relief of waiver of objections related to Plaintiff’s Form Interrogatories, Form Interrogatories-Employment, Request for Admission, and Request for Production of Documents.

Defendant HLFA’s Mistake, Inadvertence, or Excusable Neglect

Defendant HLFA asserts that its failure to serve timely responses was due to mistake, inadvertence, or excusable neglect.

Plaintiff propounded written discovery on HLFA on September 27, 2022, with responses due December 09, 2022, by mutual agreement. (Terry Decl. ¶ 2.) HLFA believed that Houlihan Lokey, Inc. was Plaintiff’s actual employer rather than HLFA and that Plaintiff had sued the wrong entity. (Id. ¶ 4.) During the case management conference, HLFA informed the Court that it would seek from Plaintiff’s counsel a stipulation to file an Amended Answer before seeking leave of court based on its assertion that HLFA was erroneously sued. (Id. Ex. A.)

On December 09, 2022, Plaintiff was served verified responses on behalf of Niemann and Houlihan Lokey, Inc. but not HLFA. (Terry Decl. ¶ 5, Ex. B.) On December 21, 2022, HLFA provided its document production on behalf of Houlihan Lokey, Inc. and Niemann. (Id.) On December 27, 2022, Plaintiff informed HLFA that it had failed to timely respond to Plaintiff’s discovery request and thereby waived all objections. (Id. ¶ 6, Ex. C.) HLFA asserts that it discovered that it was mistaken in its belief that Plaintiff was not its employee. (Id.)

On January 10, 2023, HLFA offered to amend Houlihan Lokey Inc.’s previous discovery responses so that they are on behalf of HLFA and attest to the misunderstanding. (Id. ¶¶ 7,8, Ex. D.) Plaintiff asserted that HLFA had waived all objections due to its failure to timely respond. (Id. ¶ 8, Ex. E.) On January 13, 2023, HLFA served verified responses that were substantively identical to the responses Houlihan Lokey, Inc. served on December 09, 2022. (Id. ¶ 9, Ex. F, G.) Plaintiff again asserted that HLFA had waived any objections.

HLFA now moves for a waiver of objections.

Plaintiff’s Opposition to the Motion

Plaintiff asserts that HLFA is not entitled to relief from waiver because it failed to serve responses that are in substantial compliance with the Discovery Act or show that its failure was the result of mistake, inadvertence or excusable neglect.

Plaintiff asserts that HLFA’s belief that it was not Plaintiff’s employer did not excuse HLFA from not responding to Plaintiff’s discovery request. Plaintiff also asserts that HLFA’s responses are not in compliance with the Discovery Act because they contain waived objections and HLFA failed to act in good faith because it failed to conduct an investigation regarding the discovery request and merely substituted Houlihan Lokey, Inc.’s name without a diligent search.

On March 28, 2023, Plaintiff deposed her former supervisor, Ron Lazar, who confirmed that he maintained a personal file on Plaintiff and sent a written recommendation that Plaintiff be terminated, but neither the personnel file nor the written recommendation were produced in discovery. (Coate Decl. ¶ 13, Ex. H, I.) In fact, Mr. Lazar stated that no request had been made to him to provide responsive information. (Id.) Moreover, had Houlihan Lokey, Inc. done a reasonably diligent search, it should have determined that it was not Plaintiff’s employer. Therefore, swapping Houlihan Lokey, Inc.’s name with HLFA does not make HLFA’s subsequent responses substantially compliant with the Discovery Act.

Plaintiff asserts HLFA’s Answer included among its affirmative defenses grounds of standing and lack of an employment relationship with Plaintiff, but HLFA failed to investigate the issue prior to filing its Answer. Here, HLFA too failed to conduct an investigation prior to responding to discovery. Moreover, after it was propounded discovery, HLFA served responses on behalf of a non-party rather than respond to the discovery request. Therefore, HLFA was not diligent in trying to comply with its discovery obligations. Plaintiff also asserts that was prejudiced because Plaintiff’s counsel had to research issues related to the statute of limitations and seek authorization for the right to sue from DFEH to preserve Plaintiff’s right to sue Houlihan Lokey, Inc.

Relief From Waiver of Objections

The statutory language “mistake, inadvertence, or excusable neglect” in the discovery statute should be interpreted using the same general principles developed in application of the identical language in section 473, subdivision (b). (Scottsdale Ins. Co. v. Superior Court (1997) 59 Cal.App.4th 263, 275.) Although the party moving for relief under section 473 has the burden to show that the mistake, inadvertence, or neglect was excusable, any doubts as to that showing must be resolved in favor of the moving party. (New Albertsons, Inc. v. Superior Court (2008) 168 Cal.App.4th 1403, 1420.)

“A ‘mistake’ justifying relief may be either a mistake of fact or a mistake of law. ‘A mistake of fact exists when a person understands the facts to be other than they are[.]’ [Citation.]” (H.D. Arnaiz, Ltd. v. County of San Joaquin (2002) 96 Cal.App.4th 1357, 1368.) A mistake sufficient to justify relief “may be found where, under some erroneous conviction, [a party] does an act he would not do but for the erroneous conviction. [Citation.]” (Id. at p. 1369.)

As discussed above, HLFA did not respond to discovery based on its mistaken belief that it was not Plaintiff’s employer. Since HLFA mistook Houlihan Lokey, Inc. to be the correct employer, Defendants timely responded to the discovery requests and served responses on Houlihan Lokey, Inc.’s behalf. However, when it discovered its mistake, it swiftly moved to provide responses such that its failure to reason was the result of a mistake of fact and should be excused. The Court agrees and Plaintiff fails to cite case law showing that HLFA’s mistake a mistake of law or was otherwise not excusable.

Substantial compliance means actual compliance with respect to the substance essential to every reasonable objective of the statute. (See St. Mary v. Superior Court (2014) 223 Cal.App.4th 762, 778.) “Where there is compliance as to all matters of substance technical deviations are not to be given the stature of noncompliance. [Citation.] Substance prevails over form.’” (Id. quoting Southern Pac. Transportation Co. v. State Bd. of Equalization (1985) 175 Cal.App.3d 438, 442.) In evaluating whether the proposed discovery response is in compliance with the Civil Discovery Act, the Court will evaluate the proposed response “in toto to determine whether it substantially complies with the code” rather than segregate each individual response “for the purpose of finding that portions of the document are code-compliant (and will therefore be accepted), while concluding that other portions are noncompliant (and will thus be rejected).” (Id. at 780.) A party may move for a motion to compel further to cure individual responses deemed not in compliance with the Discovery Act. (Id.)

In response to the Request for Production of Documents, HLFA stated: “Defendant will produce responsive documents it has located after a diligent search.” Plaintiff asserts that HLFA did not state it would produce “all” responsive documents, as shown by the missing personnel file and termination letter. If only part of an item or category demanded is objectionable, the response must contain an agreement to comply with the remainder, or a representation of inability to comply. (See Code Civ. Proc., § 2031.240 subd. (a).) HLFA did not state it was unable to comply with document production. Plaintiff also asserts that because HLFA did not produce the personnel file or the termination letter and failed to identify the correct employer, HLFA failed to conduct a diligent search such that its discovery responses are not substantially compliant with the Discovery Act. Instead, HLFA substituted its name for that of Houlihan Lokey, Inc. without diligently searching its own records for responsive documents.

In its reply, HLFA does not address Plaintiff’s contention that not all responsive documents to the Request for Production of Documents were produced or that HLFA’s search for documents was not diligent. Instead, HLFA maintains that the swapping entity names was all that was required for HLFA to comply because “Plaintiff has had the complete and correct information to the requests she propounded since December 9, 2022, and the only change necessary was to insert the correct employing entity.” (Reply at 4:3-5.) However, Plaintiff has shown that both Houlihan Lokey, Inc. and HLFA failed to produce the personnel file and termination letter, meaning that no diligent search was conducted prior to serving its response.

“Verification of the answers is in effect a declaration that the party has disclosed all information which is available to him. If only partial answers can be supplied, the answers should reveal all information then available to the party. If a person cannot furnish details, he should set forth the efforts made to secure the information. He cannot plead ignorance to information which can be obtained from sources under his control.” (Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 782.)

While it is true that substantial compliance does not mean perfect compliance, the Discovery Act imposes on parties a good-faith obligation to produce the information requested after a diligent search. HLFA moving papers do not show that it conducted a diligent search of its records prior to serving its responses. Without an explanation as to why the personnel file or termination letter were not produced, despite HLFA’s representations that a diligent search had been made, the Court cannot find that HLFA tried in good faith to comply with the Discovery Act.

“The Civil Discovery Act (§ 2016.010 et seq.) provides specific remedies for evasive or incomplete discovery responses.” (Saxena v. Goffney (2008) 159 Cal.App.4th 316, 333.) Here, Plaintiff may move for a motion to compel further responses and for sanctions for discovery misuse such as making an evasive response to discovery. (Code Civ. Proc., § 2023.010.) Moreover, Plaintiff may pursue evidence sanctions if she can show the response was willfully false. (Saxena v. Goffney (2008) 159 Cal.App.4th 316, 334.) Given that Plaintiff has other discovery tools available to ensure HLFA’s future compliance with its discovery obligations, the Court is not inclined to deny relief from waiver based on two missing documents when other responsive documents were produced.

Therefore, the Court GRANTS HLFA’s request for waiver of objections as to the Request for Production of Documents.

Plaintiff also asserts that HLFA’s responses to interrogatories are deficient and lack sufficient details to qualify as substantially compliant with the Discovery Act but fails to explain with specificity why the responses are substantially deficient. Are the majority of HLFA’s interrogatory responses incomplete? Did HLFA represent that it lacked personal knowledge sufficient to respond to the interrogatory but failed to state that it tried in good faith to obtain the information through inquiry? Without more, the Court cannot determine that HLFA’s interrogatory responses are not compliant with the Discovery Act.

Therefore, the Court GRANTS HLFA’s request for waiver of objections as to the Form Interrogatories, Set One, and Form Interrogatories – Employment.

Plaintiff also sought an admission that the “Complete Personnel File of Nicole Fizor marked as HL Fizor000001 – HL Fizor000158” was genuine. Plaintiff asserts the admission was not genuine since it was not Plaintiff’s complete personnel file. The Court will not cherry-pick responses to see which are not compliant but must instead look at the responses “in toto to determine whether it substantially complies with the code.” (St. Mary, supra, 223 Cal.App.4th at 778.) Here, Plaintiff has not asserted that most of HLFA’s admissions fail to comply with the Discovery Act.

Therefore, the Court GRANTS HLFA’s request for waiver of objections as the Request for Admission.

The Court reminds the parties that this Court’s Standing Order requires that an Informal Discovery Conference (“IDC”) be held prior to the hearing on a motion to compel further.

Conclusion

Moving party to provide notice.