SCHLOMO SCHMUEL D.P.M., INC. VS. ISRAEL BASHAREL, ET AL

Tentative Rulings

Case Number: LC103145    Hearing Date: March 26, 2021    Dept: U

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT

I. FACTUAL AND PROCEDURAL BACKGROUND

The Plaintiffs, Schlomo Schmuel and Schlomo Schmuel D.P.M., Inc., claim that the Defendant, Israel Basharel, breached agreements by failing to repay loans made to him by the Plaintiffs. Israel Basharel obtained the funds so that he could purchase, develop, and then sell parcels of real estate. In the operative complaint, the Third Amended Complaint, the Plaintiffs plead thirty-one causes of action.

The Defendant, Israel Basharel, then filed a Cross-Complaint to allege that the Plaintiffs failed to transfer ownership of the real property to him and failed to participate in the management of the real property. The operative cross-complaint, the Fifth Amended Cross-Complaint, contains forty-six causes of action.

This hearing concerns the following motions filed by the parties:

1) Israel Basharel’s motion to dismiss the tenth cause of action in the Third Amended Complaint; and

2) Plaintiffs/Cross-Defendants’ motion for judgment on the pleadings to the 45^th cause of action in the Fifth Amended Cross-Complaint.

Plaintiffs/Cross-Defendant has withdrawn it previously filed motion for judgment on the pleadings to the 2^nd, 3^rd, 4^th, and 6^th causes of action in the Fifth Amended Cross-Complaint. Israel Basharel has withdrawn its previously filed motion for relief from waiver of jury trial.

II. DISCUSSION

The following analysis considers each of the two motions. In the discussion, Schlomo Schmuel and Schlomo Schmuel, D.P.M., Inc. are identified as the “Plaintiffs” when analyzing the motions directed at their Third Amended Complaint and in the Fifth Amended Cross-Complaint. Israel Basharel is identified as Mr. Basharel throughout.

A. Israel Basharel’s Motion to Dismiss Tenth Cause of Action

Mr. Basharel argues that the tenth cause of action should be dismissed because it seeks a declaration regarding the rights of Caspar Management Co., LLC (“Caspar”) in real property at 2210 E. Highland Ave., San Bernardino (“Highland Property”), but Caspar is not a party to this action.

In their opposition, the Plaintiffs argue that they are seeking a declaration of rights of the Plaintiffs and Israel Basharel and there are no grounds to find that Caspar needs to be a party.

Mr. Basharel seeks relief under CCP section 389, which authorizes the Court to order that a party be joined to a proceeding in the following circumstances:

1) in the third party’s absence complete relief cannot be accorded among those already parties or

2) the third party claims an interest relating to the subject of the action and is so situated that the disposition of the action in the party’s absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest.

Further, section 389(b) authorizes the Court to dismiss a claim if the absent party is indispensable and cannot be joined.

In determining whether an unjoined person is an indispensable party, potential prejudice to that unjoined person is of critical importance. (Tracy Press, Inc. v. Superior Court (2008) 164 Cal.App.4th 1290, 1298.) A person is an indispensable party if his or her rights must necessarily be affected by the judgment. (Morrical v. Rogers (2013) 220 Cal.App.4th 438, 463.)

Whether a party is necessary or indispensable is a matter of trial court discretion in which the court weighs factors of practical realities and other considerations. (Hayes v. State Dept. of Developmental Services (2006) 138 Cal.App.4th 1523, 1529.) These determinations under CCP section 389 are reviewed for abuse of discretion. (Morrical, 220 Cal.App.4^th at 461.)

In the tenth cause of action, the Plaintiffs allege facts in paragraphs 129 to 132 to show that there is a dispute whether Mr. Basharel, is a 50% owner of the Highland Property or whether Caspar is a 100% owner with the Plaintiffs and Mr. Basharel owning the real property through Caspar.

This cause of action concerns the ownership rights to the Highland Property. A Court determination on the Plaintiffs’ claim will determine whether Mr. Basharel has an ownership right to 50% of the property or whether Caspar has an ownership right to 100% of the property. A judgment including this determination will necessarily affect Caspar’s rights in the property, e.g., whether it has a 50% or 100% ownership right in the Highland Property. If Caspar is not joined, it could suffer severe prejudice to its ownership rights in the Highland Property.

Mr. Basharel argues that Caspar cannot be joined because the statute of limitations bars it from being added to the Complaint. However, the Plaintiffs named Caspar as a nominal Defendant in the caption to the Third Amended Complaint. Further, in the caption to the tenth cause of action, the Plaintiffs sought declaratory relief regarding Caspar’s rights in the Highland property against the “Defendant BASHAREL and all other Parties”. Paragraph 133 in the tenth cause of action seeks a judicial declaration so that “Defendant BASHAREL’s and Nominal Defendant CASPAR’s ownership of the Highland Property and attendant duties and obligations to the PLAINTIFFS can be determined.” Based on these allegations and demands for relief directed at Caspar, it is identified as a party in the pleadings such that the statute of limitations does not apply.

However, the procedural problem is that the Plaintiffs named Caspar in the Third Amended Complaint and then failed to serve it within the mandatory three years. Under CCP section 583.210, the Plaintiffs have to serve Caspar within three years or return a proof of service within 60 days after the three-year period ended.

A review of the Court file shows that the Plaintiffs, in the caption to the Third Amended Complaint, named Caspar as a nominal Defendant. Further, as discussed above, the Plaintiffs sought a declaration regarding Caspar’s rights in the 10^th cause of action. The above analysis demonstrates that Caspar is an indispensable party. Accordingly, when the Plaintiffs filed the Third Amended Complaint on December 20, 2017, they named Caspar as a Defendant and sought relief in the 10^th cause of action directed at Caspar’s rights.

Under CCP section 583.210, the Plaintiffs had three years, or until December 20, 2020, to serve Caspar with the summons and complaint. The Plaintiffs did not file any proof of service to show they served the summons and complaint on Caspar within the three-year time period. Accordingly, any action against Caspar as a nominal Defendant in the Third Amended Complaint is dismissed under CCP section 583.210 and it cannot be joined to the Plaintiffs’ Third Amended Complaint in order to defend its rights and avoid prejudice. As a result, the tenth cause of action is dismissed because Caspar is indispensable to the tenth cause of action, as discussed above.

Further, the Court also notes that the Plaintiffs alleged in a separate case, Schmuel v. Caspar, LC106625, that the Highland Property was sold. A copy of the pleadings in this other case is in Exhibit E to the request for judicial notice accompanying Mr. Basharel’s motion. In paragraph 22 to the Complaint in LC106625, the Plaintiff alleges that they sold the Highland Property for $1,700,000. Since this indicates that the Plaintiffs sold the property, the Plaintiffs have no standing in any actual controversy over the ownership rights to the Highland Property. It is unclear why the Plaintiffs are seeking a declaration regarding rights in property in which they have no ownership rights. As a result, there does not appear to be any reason to join Caspar to this action to resolve a controversy over real property that they no longer own.

Therefore, the Court grants Mr. Basharel’s motion and dismisses the tenth cause of action under CCP section 389 because it does not include an indispensable party, Caspar, and because Caspar cannot be joined to the Complaint.

B. Plaintiffs’ Judgment on the Pleadings to the 45th Cause of Action

The Plaintiffs argue that Caspar was not joined as a nominal Defendant to the 45^th cause of action and argues that it should be dismissed. The 45^th cause of action seeks declaratory relief regarding the transfer of title to ISS LLC. In this claim, Mr. Basharel states he is bringing it on behalf of Caspar.

First, a motion for judgment on the pleadings cannot be brought based on a defect of parties. A motion for judgment on the pleadings has the purpose and effect of a general demurrer and is filed because the time to file a demurrer has expired. (Smiley v. Citibank (S.D.), N.A. (1995) 11 Cal. 4th 138, 145-146.) Just as on a demurrer, the Court examines the allegations in order to determine whether they contain the essential facts necessary to plead a valid cause of action and accepts as true all material facts alleged therein. (Id.)

Under CCP section 438(c)(1)(B) a defendant may seek a judgment on the pleading on the following grounds:

1) The court has no jurisdiction of the subject of the cause of action alleged in the complaint.

2) The complaint does not state facts sufficient to constitute a cause of action against that defendant.

It does not authorize a motion for a judgment on the pleadings based on the failure to join an indispensable party. This differs from a demurrer, which can be based on a defect in the parties under CCP section 430.10(d). Since the plaintiffs’ motion does not establish that the Court lacks subject matter jurisdiction or that the 45^th cause of action lacks sufficient facts, the Court denies this motion.

In the alternative, the Plaintiffs seek dismissal of the 45^th cause of action under CCP section 389, which authorizes the Court to join a necessary party or, if the party cannot be joined, to dismiss the action.

Caspar is a party to the Fifth Amended Cross-Complaint and can be readily joined to this cause of action. Caspar has appeared on the Cross-Complaint by filing an answer to the Fifth Amended Cross-Complaint. A copy of Caspar’s answer is in exhibit E to Mr. Basharel’s request for judicial notice. As a result, there are no grounds to dismiss the 45^th cause of action and this request is denied. Instead, the Court orders that Caspar is joined to the 45^th cause of action as a nominal Defendant.

III. CONCLUSION

For the foregoing reasons, the Court issues the following orders:

1) Mr. Basharel’s Motion to Dismiss the tenth cause of action in the Third Amended Complaint is GRANTED.

2) Plaintiffs’ Motion for a judgment on the pleadings is DENIED in its entirety. The Court orders that Casper is joined as a nominal defendant to the forty-fifth cause of action in the Fifth Amended Cross-Complaint.

Case Number: LC103145    Hearing Date: September 03, 2020    Dept: U

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT

I. BACKGROUND

Schlomo Schmuel D.P.M., Inc. and Schlomo Schmuel, individually and derivatively on behalf of Diversified Equity Group, LLC and Caspar Management Co., LLC (Plaintiffs), filed this action against Israel Basharel (Basharel), Libi Basharel, and Does 1 through 50 on July 10, 2015. On August 8, 2017, Plaintiffs filed the operative third amended complaint (TAC), alleging claims for: (1) four counts of breach of contract; (2) five counts of breach of implied-in-law contract; (3) four counts of quantum meruit; (4) two counts of declaratory relief: (5) five counts of breach of fiduciary duty; (6) negligence; (7) four counts of conversion; (8) breach of implied covenant of good faith and fair dealing (9) accounting; (10) rescission; (11) cancellation of instrument; (12) tort of another; and (13) constructive trust.

Both Basharel and JAS, LLC (JAS) have filed cross-complaints.

On July 1, 2020, Plaintiffs filed this Motion for Order Establishing Requests for Admissions Deemed Admitted and request for $2,007.28 in monetary sanctions against Caspar and its counsel.

II. LEGAL STANDARD & DISCUSSION

Under California Civil Procedure section 2033.280, a party who fails to serve timely responses to requests for admission waives any objections to the requests, including those based on privilege and work product. The Court can relieve this waiver if: (1) the party subsequently serves a response that is in substantial compliance and (2) the party’s failure to serve a timely response was the result of mistake, inadvertence or excusable neglect. (Code Civ. Proc., § 2033.280(a).) 

The party requesting admissions may move for an order that the genuineness of any documents and the truth of any matters specified in the requests be deemed admitted when the party served with the requests fails to serve its timely response. (Code Civ. Proc., § 2033.280(b).) The party failing to serve timely responses to requests for admissions is also subject to monetary sanctions. (Code Civ. Proc., § 2033.280(b).) 

The Court shall make this order, unless the party failing to timely serve the responses, before the hearing on the motion, serves responses to the requests for admission that are in substantial compliance with California Civil Procedure section 2033.200. However, it is still mandatory that the Court impose a monetary sanction under Chapter 7 on the party whose failure to serve a timely response to requests for admission necessitated this motion. (Code Civ. Proc., § 2033.280(c).) 

Here, on February 25, 2020, Plaintiffs propounded by mail Requests for Admissions on Caspar, in its capacity as cross-defendant named in the first amended cross-complaint filed by JAS and Assis. Thirty days after this date, plus five days for service by mail, established April 1, 2020 as the deadline for Caspar to serve its responses. Defense counsel requested additional time to respond, and Plaintiffs’ counsel granted Caspar an extension to respond until June 19, 2020. (Quintana declaration, ¶ 3.) Despite the extension, Caspar failed to serve its responses to Plaintiffs’ Requests for Admissions by this date.

Caspar contends that its counsel, Barak Isaacs (Isaacs), moved to withdraw as counsel on February 27, 2020, two days after being served with the Requests for Admissions. Ultimately, Isaacs withdrew this motion. However, in early May, Quintana and Isaacs discussed suspending Caspar’s obligation to respond to the discovery and Isaacs was under the impression that such an agreement was reached. Nevertheless, Quintana filed this motion without trying to resolve the issues with Isaacs. Isaacs contacted Quintana, asking him to withdraw this motion, but Quintana did not respond. On July 23, 2020, Caspar served verified responses to Plaintiffs’ requests for admissions.

As Caspar has now served its responses to Plaintiffs’ requests for admissions, the motion for an order establishing the truth of the matters in Plaintiffs’ requests for admissions is moot. The Court finds that Caspar’s mistaken belief that it was not obligated to serve responses was reasonable, so it is entitled to relief from any waiver of its objections to Plaintiffs’ discovery requests.

Via Quintana’s declaration, Plaintiffs also request $2,007.28 in monetary sanctions against Caspar and its defense counsel for having to bring this motion. Quintana declares that he spent three and one-half hours preparing this motion, declaration, and proposed order at an hourly rate of $275. The electronic motion filing fee was $61.65. (Quintana declaration, ¶ 5a.) Counsel anticipates incurring an additional $982.63 reviewing and analyzing any opposition and drafting a reply brief before spending at least three and one-half hours preparing for this hearing and traveling to and from and appearing for the hearing. (Id., ¶ 6.)

While monetary sanctions are mandatory, the Court finds the time spent preparing this simple and routine motion, declaration, and proposed order to be unreasonable and excessive. Therefore, the Court reduces the hours spent preparing the moving papers and reply and appearing on this motion to a total of three hours at an hourly rate of $275. Therefore, the Court orders $886.65 ((3 hours x $275) + $61.65) in monetary sanctions against Caspar and Isaacs.

III. CONCLUSION

For the foregoing reasons, Plaintiffs’ Motion for an Order Establishing the Requests for Admissions be Deemed Admitted is MOOT.

Plaintiffs’ request for sanctions is GRANTED in the amount of $886.65.

Plaintiffs are ordered to give notice of the Court’s ruling.

DATED: September 3, 2020

_____________________

Hon. Theresa M. Traber

Judge of the Superior Court

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT

I. BACKGROUND

Schlomo Schmuel D.P.M., Inc. and Schlomo Schmuel, individually and derivatively on behalf of Diversified Equity Group, LLC and Caspar Management Co., LLC (Plaintiffs), filed this action against Israel Basharel (Basharel), Libi Basharel, and Does 1 through 50 on July 10, 2015. On August 8, 2017, Plaintiffs filed the operative third amended complaint (TAC), alleging claims for: (1) four counts of breach of contract; (2) five counts of breach of implied-in-law contract; (3) four counts of quantum meruit; (4) two counts of declaratory relief: (5) five counts of breach of fiduciary duty; (6) negligence; (7) four counts of conversion; (8) breach of implied covenant of good faith and fair dealing (9) accounting; (10) rescission; (11) cancellation of instrument; (12) tort of another; and (13) constructive trust.

Both Basharel and JAS, LLC (JAS) have filed cross-complaints. 

On February 17, 2020, Israel, Leah, and Avraham Basharels (here, the Basharels) served a third-party deposition subpoena (the subpoena) for production of business records on M.R. Grant, CPA (Grant).

On March 9, 2020, Plaintiffs filed this Motion to Quash the Deposition Subpoena served on Grant pursuant to Code of Civil Procedure section 1987.1.  Plaintiffs move on the grounds that the subpoena exceeds the permissible scope of discovery, is unjustly burdensome and oppressive, seeks information protected by the tax privilege, and was not accompanied by the requisite consumer notices.

II. LEGAL STANDARD

California Civil Procedure section 1987.1 states, “when a subpoena requires…the production of [documents], the court, upon motion reasonably made by the party, the witness or any consumer described in Section 1985.3…may make an order quashing the subpoena entirely, modifying it, or directing compliance with it upon such terms or conditions as the court shall declare, including protective orders.” “The court may make any other order as may be appropriate to protect the parties, the witness, or the consumer from unreasonable or oppressive demands including unreasonable violations of a witness’s or consumer’s right of privacy.”  (Ibid.)

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III. DISCUSSION

A. Meet & Confer Requirement

Code of Civil Procedure section 2025.410(c) provides that a motion to quash a deposition notice must be accompanied by a meet and confer declaration. There is no evidence that Plaintiffs’ counsel attempted to meet and confer with defense counsel prior to filing this motion. Rather, the Court notes that Plaintiffs served their objections to the deposition subpoena on the Basharels on the same date they filed this motion.

B. Separate Statement

A motion to quash production of documents at a deposition must be accompanied by a separate statement setting forth the particular documents or demands at issue and the factual and legal reasons why production should not be compelled. (Cal. Rules of Court, rule 3.1345(a)(5).)

C. Procedural Requirements

Subpoenas which seek consumer records, including personal financial information, must adhere to the procedural requirements laid out in Code of Civil Procedure section 1985.3. The subpoena must be served on the consumer at least five days before it is served on the nonparty from whom records are sought, with a five-day extension if served by mail, pursuant to Code of Civil Procedure section 1013. (Code Civ. Proc., § 1985.3(b)(3).) The subpoena must be served on the custodian of records at least fifteen days before the date upon which records are to be produced. (Id., §§ 1985.3(d), 2020.410(c).) Therefore, as a practical matter, the subpoena must be personally served on the consumer at least twenty days before the date upon which records are to be produced. This is extended by an additional five days if service on the consumer is made by mail. (Id., § 1985.3(b)(3).)

Here, Plaintiffs argue that Basharels did not personally service them or third-party Robin Jacobs (Jacobs) with the requisite consumer notice. Additionally, Plaintiffs contend that the Basharels violated Code of Civil Procedure section 1985.3(c) because the release of the subject records has not been authorized by Plaintiffs, their counsel, or Jacobs, and the Basharels failed to serve the parties with the requisite proof of service.

The Basherals counter by noting that the subpoena seeks Caspar’s tax returns, documents, including tax audits, relating to the Highland property, communications between Grant and Schmuel, and communications between Berger and Schmuel about Caspar. The Basherals argue that Schmuel cannot claim that his personal and financial information is being sought because it is only Caspar’s tax information that the subpoena requests, not Schmuel’s personal tax information.

The Basharels’ position is well-taken as Caspar is an entity and not an individual subject to consumer privacy concerns.

D. Substantive Requirements

For discovery purposes, information is relevant if it might reasonably assist a party in evaluating the case, preparing for trial, or facilitating settlement. (Gonzalez v. Superior Court (1995) 33 Cal.App.4th 1539, 1546.) As a general rule, all unprivileged information that is relevant to the subject matter of the action is discoverable if it would itself be admissible evidence at trial or if it appears reasonably calculated to lead to the discovery of admissible evidence. (Code Civ. Proc., § 2017.010; Schnabel v. Superior Court. (1993) 5 Cal.4th 704, 711.) When the information sought to be discovered impacts a person’s constitutional right to privacy, limited protections come into play for that person. (Shaffer v. Superior Court (1995) 33 Cal.App.4th 993, 999.) The protections cover both a person’s personal and financial matters. (Ibid.) The court must balance competing rights — the right of a litigant to discover relevant facts and the right of an individual to maintain reasonable privacy — in determining whether the information is discoverable. (Ibid.)

In Valley Bank of Nevada v. Superior Court (1975) 15 Cal.3d 652, the Supreme Court found that the following factors should be considered by trial courts in balancing the interests between the right of civil litigants to discover relevant facts and the right of bank customers to maintain reasonable privacy regarding their financial affairs: “the purpose of the information sought, the effect that disclosure will have on the parties and on the trial, the nature of the objections urged by the party resisting disclosure, and ability of the court to make an alternative order which may grant partial disclosure, disclosure in another form, or disclosure only in the event that the party seeking the information undertakes certain specified burdens which appear just under the circumstances.” (Id. at 658.)

Although relevance is typically construed liberally (Pacific Tel. & Tel. Co. v. Superior Court (1970) 2 Cal.3d 161, 169.), the standard is more stringent when a party is attempting to discover documents which are constitutionally protected by the right to privacy, such as consumer records. 

[E]ven when discovery of private information is found directly relevant to the issues of ongoing litigation, it will not be automatically allowed; there must then be a careful balancing of the compelling public need for discovery against the fundamental right of privacy.  . . . [I]f an intrusion on the right of privacy is deemed necessary under the circumstances of a particular case, any such intrusion should be the minimum intrusion necessary to achieve its objective . . . [meaning] the least intrusive means to satisfy the interest. Mere convenience of means or cost will not satisfy that test for that would make expediency and not the compelling interest the overriding value.

(Lantz v. Superior Court (1994) 28 Cal.App.4th 1839, 1854-1855.)

This is true even where the party asserting the right to privacy is the party who brought the suit. (Vinson v. Superior Court (1987) 43 Cal.3d 833, 842 [“While the filing of a lawsuit may implicitly bring about a partial waiver of one’s constitutional right of associational privacy, the scope of such waiver must be narrowly rather than expansively construed, so that plaintiffs will not be unduly deterred from instituting lawsuits . . . . [A]n implicit waiver of a party’s constitutional rights encompasses only discovery directly relevant to the plaintiff’s claim and essential to the fair resolution of the lawsuit.”].) 

The burden is on the party seeking the constitutionally protected information to establish direct relevance. (Harris v. Superior Court (1992) 3 Cal.App.4th 661, 665.)

1. Plaintiffs’ Rights

Avraham and Leah Basheral are included among the subpoenaing parties, yet there are no claims between either of them and Plaintiffs, Caspar, or Jacobs. Thus, Plaintiffs reason that the subject documents cannot be reasonably calculated to lead to the discovery of admissible evidence, but rather, are necessarily overbroad and intended to harass.

The tax-related documents sought by way of the subpoena are protected by the California tax-return privilege and the constitutional right to privacy without the application of any of the recognized exceptions.  The Basharels have not tried to secure the tax-related information through alternative, less burdensome means nor requested the information directly from Plaintiffs themselves who have not previously prevented disclosure of sensitive documents.

2. Defendants’ Rights

The subpoena seeks Caspar’s tax returns and tax-related documents, specifically the tax returns subject to the 2010 audit, because the documents include relevant information on the Highland property, whose ownership is a central issue in this matter. The Basherals contend the tax returns contain information relevant to resolve the Highland property ownership dispute.

The Basharels assert that their counsel did meet and confer with Plaintiffs’ counsel prior to this motion being filed. These communications revealed that Grant was retained to audit Caspar’s tax returns for 2010 after the IRS provided notice of its intent to audit in April 2012. Based on this discussion, the Basharels reason that the issuance of the subpoena on Grant should have been expected by Plaintiffs.

3. Balancing of Interests

Plaintiffs submit in their reply that if the Basharels are willing to limit the subpoena to only “(1) Caspar’s tax returns; (2) communications between Berger and Schmuel related to Caspar; and (3) tax audits related to the Highland Property,” then Plaintiffs agree to allow the subpoena to proceed so along as the documents are subject to a protective order. Based on this representation, the Court finds this motion MOOT.

E. Attorneys’ Fees

Code of Civil Procedure section 1987.2(a) provides “the court may in its discretion award the amount of the reasonable expenses incurred in making or opposing the motion, including reasonable attorney's fees, if the court finds the motion was made or opposed in bad faith or without substantial justification . . . .” As used here, “substantial justification,” allowing sanctions to be incurred in opposing a motion made in bad faith or without substantial justification, means that a justification is clearly reasonable because it is well grounded in both law and fact. (Evilsizor v. Sweeney (2014) 230 Cal.App.4th 1304, 1312.)

Pursuing a pending motion to quash after it becomes clear that it is unjustified may be considered “making” a motion allowing for an award of expenses incurred in opposing the motion if the “motion was made” in bad faith or absent substantial justification. (Evilsizor v. Sweeney, supra, 230 Cal.App.4th at 1312.) A trial court can consider a failure to withdraw a motion to quash a subpoena as “making the motion” for purposes of awarding sanctions in the form of attorneys’ fees incurred in opposing the motion, even if the original motion was not in bad faith and was justified. (Id. at 1311.)

The Basharels request that sanctions to compensate them for their attorneys’ fees be ordered against Plaintiffs on the grounds that Plaintiffs filed and proceeded with this motion in bad faith.  It is argued that Plaintiffs have no basis for this motion because the subpoena does not seek Schmuel’s personal tax returns, rather, it only requests those of Caspar. Eliminating any communications made by Jacobs could easily have been resolved without this motion.

Counsel for the Basharels, Bart Ring (Ring), states that he spent 22 hours reviewing this motion, meeting and conferring with opposing counsel, and preparing the Basharels’ opposition. Ring’s hourly rate is $450, therefore, he requests $9,900 in attorneys’ fees (22 hours x $450/hour).

The Court finds that Plaintiffs pursued this motion in bad faith on the grounds that it was filed the same date Plaintiffs’ objections to the subpoena were served on the Basharels and Plaintiffs submit no evidence that they tried to resolve their contentions informally as required by the meet and confer rules. Moreover, for Plaintiffs to agree to the deposition subpoena subject to a protective order after filing this motion, thereby forcing the Basharels to file an opposition, rather than informally attempt this approach in advance, appears to be in bad faith.

That said, the Court finds Ring’s requested attorneys’ fees to be unreasonable. The time purportedly spent meeting and conferring with Plaintiffs’ counsel would likely have been expended even it this motion had never been filed.  The Court reduces the time spent to three hours for having to oppose the motion and appear for the hearing. Therefore, the Court orders $1,356.75 ($450/hour x 3 hours, plus the e-filing fee of $6.75) in monetary sanctions against Plaintiffs Schlomo Schmuel, DPM, Inc. and Schlomo Schmuel, jointly and severally.

F. CONCLUSION

For the foregoing reasons, Plaintiffs’ Motion to Quash Deposition Subpoena is MOOT.

The Basherals’ request for sanctions is GRANTED in the amount of $1,356.75.  Plaintiffs are to pay the Basharels the full sanctions awarded within 30 days of the Court’s ruling.

The Basharels are ordered to give notice of the Court’s ruling.

DATED: September 3, 2020

_____________________

Hon. Theresa M. Traber

Judge of the Superior Court