Gietzen vs Goveia

Motion to Compel

Cal. Super. - 4th Dist.January 30, 2015

EA N ~N O N Wn 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Barak Lurie (SBN 144887) Michael J. Conway (SBN 180604) Armen Manasserian (SBN 288199) LURIE & SELTZER 12121 Wilshire Boulevard, Suite 300 Los Angeles, California 90025 Telephone: (310) 478-7788 Facsimile: (310) 347-4442 Attorneys for Plaintiffs Rod E. Gietzen and Yolanda’s, Inc. ELECTRONICALLY FILED Superior Court of California, County of Orange 05/04/2016 at 05:27:00 PM Clerk of the Superior Court By Angelina Nguyen-Do, Deputy Clerk SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF ORANGE ROD E. GIETZEN, individually and dba Yolanda’s Mexican Cafe; YOLANDA'’S, INC., a California corporation, Plaintiffs, Vv. JOSEPH D. GOVEIA, an individual; KAHL & GOVEIA/SEABRIDGE II, LLC, a California limited liability company; ROCKLIN COVENANT GROUP, L.P., a California limited partnership; KAHL & GOVEIA COMMERCIAL REAL ESTATE, INC., a California corporation; BRUCE KAHL, an individual; COVENANT RE MANAGEMENT, INC., a California corporation; GOVEIA COMMERCIAL REAL ESTATE, INC., a California corporation; SEABRIDGE PROPERTY SERVICES, INC., a California corporation; NEVADA COVENANT GROUP, LLC, a Nevada limited liability company; STEPHEN THORNE, an individual; and DOES 1 through 50, Inclusive, Defendants. 1 Case No. 30-2015-00802469-CU-FR-CJC Complaint Filed: January 30, 2015 Assigned to Hon. Martha K. Gooding, Dept. C34 MOTION TO COMPEL DEFENDANT STEPHEN THORNE’S FURTHER RESPONSES TO SPECIAL INTERROGATORIES (SET ONE) [Filed Concurrently with Separate Statement; and Omnibus Declarations of Armen Manasserian, Michael J. Conway, and Amanda Washton) Date: June 20, 2016 Time: 1:30 p.m. Place: Department C34 Reservation Number: 72368745 MOTION TO COMPEL THORNE’S FURTHER RESPONSES TO SPECIAL ROGS (SET ONE) 1 | TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: 9 Please take notice that on June 20, 2016 at 1:30 p.m., or as soon thereafter as the matter 3 || may be heard in Department C34 of the above-entitled Court located at 700 Civic Center Drive West, Santa Ana, California 92701, Plaintiff Yolanda’s Inc. (“Plaintiff”) will, and hereby does, 4 5 || move this Court for the following discovery orders against Stephen Thorne (“Defendant”) 6 || and/or its counsel of record Shepard Mullin Richter & Hampton LLP (“Sheppard Mullin”): 5 FOR AN ORDER, pursuant to California Code of Civil Procedure (“CCP”) §2030.300, g | ordering Defendant to produce objection-free responses to Plaintiff’s Special Interrogatories 9 || (Set One) mail-served to Defendant on April 6, 2015. 10 AND ALSO FOR AN ORDER that Defendant and its counsel of record Sheppard 11 | Mullin pay to Plaintiff the sum of $2,605.00 as the reasonable cost and attorney fees incurred by 12 | Plaintiff in connection with this Motion. See Declaration of Armen Manasserian (“Manasserian 13 | Decl”) at 917-20; Declaration of Michael J. Conway (“Conway Declaration”) at 5-7. 14 Plaintiff bases this motion on this Notice of Motion and Motion, the attached 15 | Memorandum of Points and Authorities, the Declarations of Michael J. Conway, Amanda 16 | Washton, and Armen Manasserian, all pleadings and records filed herein, and upon any 17 | evidence and argument presented before or at the time of the hearing on this matter. 18 19 | DATED: May 4, 2016 LURIE & SELTZER 20 21 A go on— 27 Armen Manasserian Attorneys for Plaintiffs 23 Rod E. Gietzen and Yolanda’s, Inc. 24 25 26 27 28 LURIE & 2 SELTZER MOTION TO COMPEL THORNE’S FURTHER RESPONSES TO SPECIAL ROGS (SET ONE) LOS ANGELES LURIE & SELTZER LOS ANGELES EA N ~N O N Wn 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES IL. INTRODUCTION This action arises out of Plaintiff Yolanda’s, Inc.’s (“Plaintiff”) ongoing efforts to collect on a $2,307,531.37 judgment (“Judgment”) that it obtained against various entities, including Defendant Rocklin Covenant Group, L.P. (“Rocklin”). Just prior to and immediately after Judgment was issued, Rocklin and its related entities began taking steps to transfer and hide their assets from Plaintiff in order to frustrate, hinder, delay, and/or defraud Plaintiff as a creditor. In fact, at a judgment debtor examination taken of Rocklin’s designated representative following entry of the Judgment, Rocklin admitted under oath that it and/or its general partner, Defendant Covenant RE Management, Inc. (“CREM”) had engaged in a series of transactions and transfers of various interests in at least 27 different single-purpose real estate entities. CREM also admitted under oath that its decision to transfer these assets to a new entity, i.e., co-defendant Nevada Covenant Group, LLC (“NCGL”), was done, at least in part, to protect those funds and interests from being attached in connection with the Judgment that Plaintiff obtained.’ Notwithstanding such admissions, Rocklin, CREM, NCGL, and their co-defendants, including Defendant Stephen Thorne (“Defendant”), who is the Chief Executive Officer of CREM and the Managing Member of NCGL, have engaged in a series of delaying tactics designed to avoid providing substantive responses to Plaintiff's discovery requests.” IL. PROCEDURAL HISTORY Plaintiff initiated this action in the Ventura County Superior Court on or about January 30, 2015. Plaintiff thereafter began serving extensive discovery requests on all defendants starting on or about April 6, 2015.> Although Plaintiff served its first set of Special ' Although CREM itself was not listed as a judgment debtor in the Judgment, CREM is (or at least at all relevant times was) the general partner of Rocklin and thus is liable for all the debts of the limited partnership. * By way of example, Defendant delayed serving its Answer to the Complaint until September 4, 2015, i.e., the same day it served supplemental responses to some of the discovery requests, yet refused to provide substantive answers to Interrogatory 15.1 relating to its affirmative defenses because it had not technically filed and served its Answer prior to that date. ? Ventura County Superior Court is the same court where Plaintiff obtained its Judgment in the underlying action. 3 MOTION TO COMPEL THORNE’S FURTHER RESPONSES TO SPECIAL ROGS (SET ONE) LURIE & SELTZER LOS ANGELES EA N ~N O N Wn 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Interrogatories (“Interrogatories”) on Defendant over a year ago, Defendant failed to timely respond to those Interrogatories within the time permitted. In fact, Defendant had even requested and received a two-week extension, yet still failed to timely respond by the continued May 25, 2015 deadline. Thus, Defendant has waived its objections to the discovery as a matter of law. Notwithstanding that fact, when Defendant provided its untimely responses on August 28, 2015 and September 4, 2015, Defendant improperly asserted a laundry list of objections and refused to provide further responses without objection. During meet and confer efforts, Defendant’s counsel stated that Defendant did not have to provide timely responses because this action was being transferred from Ventura County to Orange County. Plaintiff’s counsel provided defense counsel with authority that discovery is self-executing and does not simply vanish when a court transfers the case to another courthouse. Defense counsel failed to provide relevant authority in response, and continued to refuse to provide objection-free responses. In fact, Defendant often times refused to provide any substantive response whatsoever. From October 2015 through April 2016, Plaintiff and Defendant informally stayed discovery pending Defendant’s appeal of the Judgment upon which this action is based. The Court of Appeal recently affirmed that Judgment as to Rocklin, among others. When Plaintiff requested objection-free responses in order to avoid having to file this Motion, Defendant still refused. Plaintiff respectfully requests this Court order Defendant to provide amended responses without objections to Plaintiff’s Special Interrogatories (Set One), and sanction Defendant and its counsel of record Sheppard Mullin for their ongoing discovery misconduct and failure to meet and confer in good faith.* * Although Defendant has refused to submit responses without objection to each and every set of discovery requests, Plaintiff has refrained from moving to compel each and every set of discovery requests (and taking up this Court’s time) provided that the Defendant ultimately provided full and complete responses to a particular request. The fact that Plaintiff has not moved to compel as to those responses does not mean that the objections are timely or valid, and Plaintiff reserves all its rights to challenge those objections at a later date and time if it becomes necessary to do so. 4 MOTION TO COMPEL THORNE’S FURTHER RESPONSES TO SPECIAL ROGS (SET ONE) 1 III. RELEVANT FACTS 9 On April 6, 2015, Plaintiff propounded by mail Special Interrogatories, Set One, to 3 | Defendant. Washton Decl. at 2. On the same day, Defendant filed a Motion to Change Venue 4 | from Ventura County to Orange County. Washton Decl. at 93. 5 On May 9, 2015, Defendant requested a two-week extension to respond to Plaintift’s 6 || Special Interrogatories. Defendant’s responses were due May 11, 2015. Washton Decl. at 94, 7 | Exhibit A. 8 Plaintiff granted the extension, making the new deadline May 25, 2015. Washton Decl. 9 | at95, Exhibit A 10 On May 12, 2015, the Ventura County Superior Court granted Defendant’s Motion to 11 | Change Venue to Orange County. Washton Decl. at 6. 12 Defendant failed to timely respond to Plaintiff’s Special Interrogatories by the May 25, 13 | 2015 deadline, thereby waiving any and all objections. Washton Decl. at 7. 14 On July 10, 2015, Plaintiff’s counsel sent a “meet and confer” letter to defense counsel 15 | concerning Defendant’s failure to respond to Plaintiff’s written discovery requests. 16 | Manasserian Decl. at 42, Exhibit A. 17 On July 23, 2015, Plaintiff propounded by mail a second set of written discovery 18 | requests on Defendant and its co-defendants. Manasserian Decl. at 3. 19 On July 27, 2015, Defendant’s counsel stated to Plaintiff’s counsel that Defendant is 20 | “not obligated to respond to any discovery unless and until the action is transferred to, and re- 71 || initiated in, Orange County Superior Court.” Manasserian Decl. at 4, Exhibit B. 29 On July 30, 2015, Plaintiff’s counsel informed Defendant’s counsel that a transfer of 73 | venue does not automatically stay, toll, or suspend discovery. Manasserian Decl. at 45, Exhibit 74 | C. Plaintiff's counsel provided pertinent legal authority that discovery is self-executing and 75 | parties may continue to conduct discovery after one party files a motion to change venue or the 26 | court orders such a change in venue. Id. 57 On August 4, 2015, Defendant’s counsel stated that the parties “have diametrically 78 | opposite views” but provided no legal authority to support its position. Defendant’s counsel LURIE & 5 SELTZER MOTION TO COMPEL THORNE’S FURTHER RESPONSES TO SPECIAL ROGS (SET ONE) 1 | promised to provide responses “on or before August 21, 2015.” Manasserian Decl. at 6, 5 | Exhibit D. Defendant still failed to provide any responses whatsoever by August 21, 2015. 3 | Manasserian Decl. at 97. 4 On August 27, 2015, Plaintiff’s counsel sent another “meet and confer” letter to 5 || Defendant’s counsel, requesting substantive responses without objections by September 4, 6 || 2015. Manasserian Decl. at 48, Exhibit E. 7 On August 28, 2015, Defendant provided responses with blanket objections and g || assertions that “Defendant has not, and will not, waive its objections” and that “Defendant 9 || provided... a draft protective order on August 28, 2015 and is awaiting comments on that 10 | document.” Manasserian Decl. at 49. In fact, Defendant emailed a draft protective order to 11 | Plaintiff for the first time on August 28, 2015 at 8:35p.m., after Defendant had already mail- 12 | served its discovery responses. Manasserian Decl. at §10, Exhibit F. Plaintiff did not at any 13 | point condition Defendant’s obligation to serve substantive, objection-free responses upon the 14 | negotiating of a stipulated protective order. Manasserian Decl. at 11, Exhibit G. 15 On September 4, 2015, Defendant served supplemental responses, again with objections. 16 | Manasserian Decl. at 12. Since Defendant served supplemental responses to the subject 17 | discovery requests, Plaintiff moves to compel herein only as to those supplemental responses. 18 From October 14, 2015 through April 29, 2016, the parties extended Plaintiff’s deadline 19 | to move to compel further responses to all discovery requests, and ultimately agreed to 70 | informally stay discovery altogether pending Defendant’s appeal of the Judgment upon which 71 || this action is based. Manasserian Decl. at 413, Exhibit H. Per the parties’ agreements, 77 | Plaintiff’s deadline to move to compel responses falls on May 4, 2016. Id. 23 On November 10, 2015, Plaintiff’s counsel emailed a draft stipulated protective order to 74 | Defendant’s counsel as a professional courtesy. Manasserian Decl. at §14, Exhibit H. 75 | Defendant’s counsel did not provide a substantive response to that email. /d. 26 On December 7, 2015, the Court of Appeal issued its Opinion affirming the underlying 27 | Judgment as to Rocklin, among others. Manasserian Decl. at §15. Defendant requested a 7g | rehearing, which the Court of Appeal resolved by issuing an Opinion on March 30, 2016. Id. LURIE & 6 SELTZER MOTION TO COMPEL THORNE’S FURTHER RESPONSES TO SPECIAL ROGS (SET ONE) 1 On April 13, 2016, Plaintiff’s counsel again requested objection-free discovery 7 | responses. Defendant’s counsel again refused. Manasserian Decl. at 916, Exhibit I. 3 At Plaintiff’s counsel’s insistence, Defendant’s counsel finally emailed a redlined copy 4 | ofthe November 10, 2015 draft stipulated protective order on April 20, 2016. Conway Decl. at 5 || 93, Exhibit B. Notably, Defendant deleted the following sentence: “Mass, indiscriminate, or 6 || routinized designations are prohibited. Designations that are shown to be clearly unjustified, or 7 || that have been made for an improper purpose (e.g., to unnecessarily encumber or impede the g || case development process, or to impose unnecessary expenses and burdens on other 9 | parties), expose the Designating Party to sanctions.” Id. (Emphasis added). 10 On April 27, 2016, Plaintiff’s counsel sent a detailed meet and confer letter to 11 | Defendant’s counsel setting forth Plaintiff’s concerns with Defendant’s redlined revisions. 12 | Conway Decl. at 4, Exhibit C. As of the filing of this Motion, Defendant’s counsel has not 13 | responded to Plaintiff’s counsel’s April 27, 2016 meet and confer letter. 14 Despite Plaintiff’s repeated requests, Defendant still refuses to provide substantive, 15 | objection-free responses. At this juncture, Plaintiff has no choice but to bring the instant 16 | Motion. 17 IV. ARGUMENT 18 | A. Defendant’s Failure To Timely Respond To Plaintiff’s Special Interrogatories (Set 19 One) Waives Defendant’s Objections And Warrants Monetary Sanctions Against Defendant And Defendant’s Counsel Of Record. 20 “If a party to whom interrogatories are directed fails to serve a timely response . . . (a) 21 [t]he party to whom the interrogatories are directed waives any right right to exercise the option 22 | to produce writings under Section 2030.230, as well as any objection to the interrogatories, 23 including one based on privilege or on the protection for work product under Chapter 4.” Code 24 | of Civil Procedure (“CCP”) §2030.290(a) (emphasis added). “The party propounding the 25 interrogatories may move for an order compelling response to the interrogatories.” CCP 26 || §2030.290(b). 27 28 LURIE & 7 SELTZER MOTION TO COMPEL THORNE’S FURTHER RESPONSES TO SPECIAL ROGS (SET ONE) 1 “Where no objections have been made within the statutorily permitted time, they are 7 | deemed waived.” Leach v. Superior Court (1980) 111 Cal.App.3d 902, 906. The moving party 3 || must only show that it properly served its interrogatories on the opposing party, that the time to 4 | respond expired, and that the responding party failed to serve a timely response. Id. at 905-06. 5 On April 6, 2015, Plaintiff propounded by mail Special Interrogatories, Set One, to 6 || Defendant. Washton Decl. at 2. On May 9, 2015, Defendant requested a two-week extension 7 || to respond to Plaintiff’s Special Interrogatories. Washton Decl. at 94, Exhibit A. Plaintiff g | granted the extension, making the new deadline May 25, 2015. Id. 9 Defendant failed to timely respond to Plaintiff’s Special Interrogatories by the May 25, 10 | 2015 deadline, thereby waiving any and all objections. Manasserian Decl. at §7. 11 On August 28, 2015, Defendant provided responses with blanket objections. 12 | Manasserian Decl. at 49. On September 4, 2015, Defendant served supplemental responses, 13 | again with objections. Manasserian Decl. at 12. As a matter of law, Defendant waived its 14 | objections by missing the May 25, 2015 deadline to respond. Moreover, by failing to assert 15 | timely objections, Defendant has also waived its right to seek a protective order based on 16 | privacy grounds (or any other grounds for that matter). v B. Defendant Is Not Entitled To Relief From Waiver. 8 If a party fails to serve timely responses to discovery requests, it waives its right to seek 19 a protective order now. See, e.g., Cal. Prac. Guide: Civ. Pro. Before Trial, Section 20 8:1454.2 (The Rutter Group 2015) ("Failure to object to an inspection demand within the 30- 2! day period provided for response waives the ground for objection"); CCP Section 2031.300(a) > (failing to timely respond to a CCP Section 2031.010 demand within the time permitted waives > all objections to the demand, including claims of privilege and work product). > Notwithstanding the above, a court may relieve a party of such waiver if certain specific 2 conditions are met: “The court, on motion, may relieve that party from this waiver on its 20 determination that both of the following conditions are satisfied: (1) The party has subsequently 27 served a response that is in substantial compliance with Sections 2030.210, 2030.220, 2030.230, 28 LURIE & 8 SELTZER MOTION TO COMPEL THORNE’S FURTHER RESPONSES TO SPECIAL ROGS (SET ONE) 1 | and 2030.240; and (2) The party’s failure to serve a timely response was the result of mistake, 5 | inadvertence, or excusable neglect.” CCP §2030.290(a) (emphasis added). Neither of these 3 || prongs have been met. 4 First, Defendant has not provided substantive responses to the discovery requests that 5 || fully comply with the Code of Civil Procedure. Second, Defendant is not entitled to a waiver 6 || under these circumstances. See, e.g., City of Fresno v. Sup. Ct., 205 Cal. App. 3d 1459, 1467 7 | (1988) (counsel's simply being busy, or a mistake of law on a simple matter such as the g | provisions of a code section, is not "excusable neglect"; party had claimed mistake as to when 9 || the responses were due). Defendant’s failure to serve a timely response was not the result of 10 | mistake, inadvertence, or excusable neglect. In fact, Defendant has made clear that it made a 11 | conscious, strategic decision to not serve timely discovery responses. 12 | C. Defendant’s Position That A Transfer of Venue Stays Discovery Runs Counter To 13 Established Law. 1 Defendant purports to believe that the filing of a motion to transfer venue, or a court’s 15 transfer of a case to another venue, somehow stays, tolls, or obviates discovery. Manasserian i Decl. at 94, Exhibit B. 4 To the contrary, “[a]fter a motion for change of venue has been filed, the parties can still 8 conduct discovery in the case, since discovery is self-executing.” CEB, Civil Procedure Before 6 Trial 3d, Motions to Change Venue §28.18. “In establishing the statutory methods of obtaining 20 discovery, it was the intent of the Legislature that discovery be allowed whenever consistent 51 with justice and public policy. The statutory provisions must be liberally construed in favor of » discovery and the courts must not extend the statutory limitations upon discovery beyond the 53 limits expressed by the Legislature.” Irvington-Moore, Inc. v. Superior Court (1993) 14 0 Cal.App.4th 733, 738-39. 55 “Civil discovery is intended to operate with a minimum of judicial intervention. ‘It is a y central precept of the Civil Discovery Act . . . that discovery be essentially self-executing.” 5 Sinaiko Healthcare Consulting, Inc. v. Pac. Healthcare Consultants (2007) 148 Cal. App.4th 28 LURIE & 9 SELTZER MOTION TO COMPEL THORNE’S FURTHER RESPONSES TO SPECIAL ROGS (SET ONE) 1 | 390,402, citing Obregon v. Superior Court (1998) 67 Cal. App.4th 424, 434; Townsend v. 7 | Superior Court (1998) 61 Cal. App.4th 1431, 1434. 3 In response to the above authority, Defendant has only cited a single case, from 1934, 4 | that has nothing to do with discovery. Pickwick Stages System v. Superior Court (1934) 138 5 || Cal. App. 448 only dealt with the court’s power to make a ruling on a demurrer during the 6 || pendency of an application to change venue. In contrast to a demurrer, or any motion, 7 | proceeding, or hearing, discovery is self-executing and survives a motion to transfer venue, g | supra. Cf. Mooore v. Powell (1977) 70 Cal. App.3d 583 (five-year period to bring an action to 9 || trial is not tolled during the pendency of a motion for change of venue). Nothing in the venue 10 | statutes states that discovery is somehow stayed during the transfer time period. Indeed, such a 11 | notion runs counter to the Legislature’s express intent that “discovery be allowed whenever 12 | consistent with justice and public policy.” Irvington-Moore, Inc. 14 Cal. App.4th at 738-39. 13 | Therefore, Plaintiff requests the Court grant this Motion and compel Defendant to provide 14 | amended responses without objections. P D. Defendant’s Discovery Misconduct Warrants Mandatory Monetary Sanctions. to “The court shall impose a monetary sanction under Chapter 7 (commencing with Section 1 2023.010) against any party, person, or attorney who unsuccessfully . . . opposes a motion to 8 compel a response to interrogatories, unless it finds that the one subject to the sanction acted " with substantial justification or that other circumstances make the imposition of the sanction 20 unjust.” CCP §2030.290. 2! Plaintiff respectfully requests this Court impose monetary sanctions in the amount of > $2,605.00 against Defendant and/or Defendant’s counsel Sheppard Mullin for their ongoing > discovery misconduct. Manasserian Declaration at 9917-20, Conway Declaration at 95-7. > Defendant cannot meaningfully argue that it acted with substantial justification in obstinately 2 refusing to provide objection-free responses, especially since Plaintiff put Defendant on notice 26 of the above-referenced legal authority since July 30, 2015. Further, Defendant’s counsel 27 expressly requested a two-week extension to serve the subject discovery responses. If counsel 28 LURIE & 10 SELTZER MOTION TO COMPEL THORNE’S FURTHER RESPONSES TO SPECIAL ROGS (SET ONE) LURIE & SELTZER LOS ANGELES EA N ~N O N Wn 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 truly believed that discovery was stayed during that time period, counsel would never have asked (or needed to ask) for that extension. This admission defeats each of Defendant’s subsequent attempts to belatedly disavow its obligations to provide timely responses. V. CONCLUSION For the aforementioned reasons, Plaintiff respectfully requests this Court order Defendant to provide an amended response without objections to Plaintiff’s Special Interrogatories (Set One). Additionally, Defendant requests that this Court impose $2,605.00 in sanctions against Plaintiff and Plaintiff's counsel of record Sheppard Mullin for necessitating this Motion. DATED: May 4, 2016 LURIE & SELTZER A if Armen Manasserian Attorneys for Plaintiffs Rod E. Gietzen and Yolanda’s, Inc. 11 MOTION TO COMPEL THORNE’S FURTHER RESPONSES TO SPECIAL ROGS (SET ONE)