This case was last updated from Los Angeles County Superior Courts on 06/12/2019 at 13:50:16 (UTC).

ANDREW YONG AHN VS VOLUMECOCOMO APPAREL INC ET AL

Case Summary

On 10/24/2017 ANDREW YONG AHN filed a Contract - Other Contract lawsuit against VOLUMECOCOMO APPAREL INC. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judge overseeing this case is MONICA BACHNER. The case status is Pending - Other Pending.
Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****0875

  • Filing Date:

    10/24/2017

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judge

MONICA BACHNER

 

Party Details

Plaintiff and Cross Defendant

AHN ANDREW YONG

Defendants and Cross Plaintiffs

VOLUMECOCOMO APPAREL KOREA INC

VOLUMECOCOMO APPAREL INC

SUE HYUN CHANG LIFE ESTATE TRUST

VOLUMECOCOMOA APPAREL CAMBODIA INC

VOLUMENCOCOMO APPAREL SHANGHAI CO. LTD

VOLUMECOCOMO APPAREL INC OF NEW YORK

CHANG HYO SIK

CHANG CHRISTOPHER

COCOVOL APPAREL CAMBODIA INC.

CHANG SUEHYUN AKA SUE HYUN CHANG AKA SUHYUN CHANG

CHANG SUSIE SUEHYUN

Attorney/Law Firm Details

Defendant Attorneys

PARKER DAVID BRUCE

RUGER RICHARD M.

Cross Defendant Attorney

BECK JAMES K. ESQ.

 

Court Documents

DEFENDANT'S CHRISTOPHER CHANG AND SUSIE SUEHYUN CHANG'S REPLY MEMORANDUM IN SUPPORT OF THEIR DEMURRERS TO PLAINITFF'S COMPLAINT

1/24/2018: DEFENDANT'S CHRISTOPHER CHANG AND SUSIE SUEHYUN CHANG'S REPLY MEMORANDUM IN SUPPORT OF THEIR DEMURRERS TO PLAINITFF'S COMPLAINT

RULING

1/31/2018: RULING

Minute Order

2/2/2018: Minute Order

FIRST AMENDED COMPLAINT 1. BREACH OF FIDUCIARY DUTY 2. CONSTRUCTIVE FRAUD 3. REMOVAL OF DIRECTOR [CORP. CODE 304] 4. BREACH OF WRITTEN CONTRACTS 5. BREACH OF THE IMPLIED COVENANT OF GOOD FAUTH AND FAI

3/12/2018: FIRST AMENDED COMPLAINT 1. BREACH OF FIDUCIARY DUTY 2. CONSTRUCTIVE FRAUD 3. REMOVAL OF DIRECTOR [CORP. CODE 304] 4. BREACH OF WRITTEN CONTRACTS 5. BREACH OF THE IMPLIED COVENANT OF GOOD FAUTH AND FAI

NOTICE OF MOTION AND MOTION TO BE RELIEVED AS COUNSEL-CIVIL

3/28/2018: NOTICE OF MOTION AND MOTION TO BE RELIEVED AS COUNSEL-CIVIL

Unknown

3/29/2018: Unknown

Unknown

3/29/2018: Unknown

Unknown

4/3/2018: Unknown

Minute Order

4/5/2018: Minute Order

SUBSTITUTION OF ATTORNEY

4/10/2018: SUBSTITUTION OF ATTORNEY

DEFENDANTS' NOTICE OF MOTION AND MOTION TO STRIKE PORTIONS OF PLAINTIFF'S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES; MEET AND CONFER DECLARATION OF STEVEN S. WANG

4/13/2018: DEFENDANTS' NOTICE OF MOTION AND MOTION TO STRIKE PORTIONS OF PLAINTIFF'S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES; MEET AND CONFER DECLARATION OF STEVEN S. WANG

DEFENDANTS' NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF'S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES; MEET AND CONFER DECLARATION OF STEVEN S. WANG

4/13/2018: DEFENDANTS' NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF'S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES; MEET AND CONFER DECLARATION OF STEVEN S. WANG

NOTICE OF JOINDER BY DEFENDANTS CHRISTOPHER CHANG AND SUSIE SUEHYUN CHANG IN DEFENDANTS VOLUMECOCOMO APPAREL, INC., VOLUMECOCOMO APPAREL, INC. OF NEW YORK, VOLUMECOCOMO APPAREL SHANGHAI CO., LTD., VOL

4/13/2018: NOTICE OF JOINDER BY DEFENDANTS CHRISTOPHER CHANG AND SUSIE SUEHYUN CHANG IN DEFENDANTS VOLUMECOCOMO APPAREL, INC., VOLUMECOCOMO APPAREL, INC. OF NEW YORK, VOLUMECOCOMO APPAREL SHANGHAI CO., LTD., VOL

Minute Order

5/4/2018: Minute Order

NOTICE OF CONTINUED HEARING ON DEFENDANTS' DEMURRER AND ETC.

5/7/2018: NOTICE OF CONTINUED HEARING ON DEFENDANTS' DEMURRER AND ETC.

PLAINTIFF'S OPPOSITION TO DEFENDANTS DEMURRER

5/25/2018: PLAINTIFF'S OPPOSITION TO DEFENDANTS DEMURRER

CASE MANAGEMENT STATEMENT

5/30/2018: CASE MANAGEMENT STATEMENT

DEFENDANTS' REPLY IN SUPPORT OF DEMURRER TO PLAINTIFF'S FIRST AMENDED COMPLAINT

6/4/2018: DEFENDANTS' REPLY IN SUPPORT OF DEMURRER TO PLAINTIFF'S FIRST AMENDED COMPLAINT

49 More Documents Available

 

Docket Entries

  • 05/01/2019
  • DocketNotice (of Continuation of Trial Date and Post Mediation Status Conference); Filed by VOLUMECOCOMO APPAREL KOREA INC (Cross-Complainant)

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  • 04/23/2019
  • Docketat 2:08 PM in Department 71, Monica Bachner, Presiding; Court Order

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  • 04/23/2019
  • DocketStipulation for Continuance of Trial Date and Post-Mediation Status Conference; Filed by VOLUMENCOCOMO APPAREL SHANGHAI CO., LTD (Cross-Complainant)

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  • 04/23/2019
  • DocketCertificate of Mailing for (Minute Order (COURT ORDER) of 04/23/2019); Filed by Clerk

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  • 04/23/2019
  • DocketMinute Order ( (COURT ORDER)); Filed by Clerk

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  • 04/04/2019
  • DocketStipulation and Order (PROPOSED STIPULATED PROTECTIVE ORDER); Filed by Christopher Chang (Cross-Complainant); Susie Suehyun Chang (Cross-Complainant)

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  • 01/09/2019
  • DocketAnswer; Filed by ANDREW YONG AHN (Cross-Defendant)

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  • 01/09/2019
  • DocketAnswer; Filed by ANDREW YONG AHN (Cross-Defendant)

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  • 01/04/2019
  • DocketAnswer; Filed by ANDREW YONG AHN (Cross-Defendant)

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  • 01/04/2019
  • DocketAnswer; Filed by ANDREW YONG AHN (Cross-Defendant)

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110 More Docket Entries
  • 12/07/2017
  • DocketDEFENDANTS CHRISTOPHER CHANG AND SUSIE SUEHYUN CHANG'S JOINDER OF DEFENDANTS VOLUME COCOMO APPAREL, INC., VOLUMECOCOMO APPAREL, INC. OF NEW YORK, VOLUMECOCOMO APPAREL SHANGHAI CO., LTD., VOLUMECOCOMO APPAREL CAMBODIA, INC., AND COCOVOL APPAREL CAMBODIA, I

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  • 12/07/2017
  • DocketPLAINTIFF ANDREW YONG AHN'S OPPOSITION OF EX PARTE APPLICATION FOR ADDITIONAL TIME EXTENSION TO RESPOND TO COMPLAINT OF DEFENDANTS VOLUMECOCOMO APPAREL, INC., VOLUMECOCOMO APPAREL, INC. OF NEW YORK, VOLUMECOCOMO APPAREL KOREA INC., VOLUMECOCOMO APPAREL SH

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  • 12/07/2017
  • DocketCIVIL DEPOSIT

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  • 12/07/2017
  • DocketMinute order entered: 2017-12-07 00:00:00; Filed by Clerk

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  • 12/07/2017
  • DocketSPECIALLY APPEARING DEFENDANTS' EX PARTE APPLICATION FOR EXTENSION OF TIME TO FILE RESPONSIVE PLEADING TO PLAINTIFF'S COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF; DECLARATION OF BRANDON P. BROUSSEAU IN SUPPORT THEREOF

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  • 10/26/2017
  • DocketNOTICE OF CASE MANAGEMENT CONFERENCE

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  • 10/26/2017
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 10/24/2017
  • DocketCOMPLAINT 1. RREACH OF FIDUCIARY DUTY ;ETC

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  • 10/24/2017
  • DocketSUMMONS

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  • 10/24/2017
  • DocketComplaint; Filed by ANDREW YONG AHN (Plaintiff)

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Tentative Rulings

Case Number: ****0875 Hearing Date: April 8, 2022 Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

ANDREW YOUNG AHN,

vs.

VOLUMECOCOMO APPAREL, INC. a California corporation, et al.

Case No.: ****0875

Hearing Date: April 8, 2022

VCA Entities’ motion for summary judgment is denied. VCA Entities’ motion for summary adjudication is denied as to Issues No. 1, 2, 3, 4, 12, 13, 18, and 22, and granted as to Issues Nos. 5, 6, 7, 8, 9, 10, 11, 14, 15, 16, and 19. Accordingly, the motion for summary adjudication is denied as to the 1st cause of action based on the VCA Loans and granted as to the 1st (Cambodian Entities Loans and JV Agreement), 5th, 7th, and 8th causes of action. The Court does not reach Issues Nos. 17, 20, or 21.

Plaintiff’s motion for leave to file a fourth amended complaint is continued to April 19, 2022 at 9:30 a.m.

  1. Motion for Summary Judgment/Adjudication

    Defendant VolumeCocomo Apparel, Inc. (“VCA”), VolumeCocomo Apparel, Inc. of New York (“VCA NY” or “VCNY”), VolumeCocomo Apparel Shanghai Co. Ltd. (“VCA Shanghai”), VolumeCocomo Apparel Cambodia, Inc. (“VCA Cambodia”), Cocovol Apparel Cambodia, Inc. (“CA Cambodia”), VolumeCocomo Apparel Korea, Inc. (“VCA Korea”) (collectively, “Entity Defendants” or “VCA Entities”) move for summary judgment on the third amended complaint (“TAC”) of Plaintiff Andrew Young Ahn (“Plaintiff”). (Notice of Motion, pg. 2.) In the alternative, VCA Entities move for summary adjudication of the: (1) 4th (breach of contract) [Issues Nos. 1-11]; (2) 5th (breach of implied covenant of good faith and fair dealing) [Issues Nos. 12-15]; (3) 7th (accounting) [Issues Nos. 16-18]; and (4) 8th (declaratory relief) causes of action [Issues Nos. 19-21]. (Notice of Motion, pgs. 2-4; Separate Statement.) In the alternative, VCA Entities move to have the claims asserted against VCA Cambodia and CA Cambodia (collectively, “Cambodian Entities”) dismissed pursuant to a forum selection clause and C.C.P. 410.30 as Cambodia is the exclusive forum for Plaintiff’s claims against these entities. (Notice of Motion, pgs. 2, 3.)

    The following causes of action in the TAC are asserted against VCA Entities: (1) 4th (breach of written contracts) [as to VCA and the Cambodian Entities only], 5th (breach of implied covenant of good faith and fair dealing), and 7th (accounting), and 8th (declaratory relief). The Court notes the TAC defines VCA NY, VCA Shanghai, VCA Cambodia and CA Cambodia as subsidiary entities of VCA and refers to them as “Subsidiary Entities,” a term that is also used in discovery requests, responses, and in this ruling. (TAC 7.)

    CRC Violations and Procedural Issues

    The Court notes VCA Entities’ Separate Statement introduces 21 distinct issues as to which VCA Entities seek summary adjudication in connection with their alternative motion for summary adjudication of the four causes of action asserted against them. However, the Notice of Motion does not address these separate issues. As such, the Separate Statement does not comply with CRC Rule 3.1350(b) as it does not repeat, verbatim, the specific causes of action and/or issues addressed in the notice. (CRC Rule 3.1350(b) [“If summary adjudication is sought, whether separately or as an alternative to the motion for summary judgment, the specific cause of action, affirmative defense, claims for damages, or issues of duty must be stated specifically in the notice of motion and be repeated, verbatim, in the separate statement of undisputed material facts.”].)

    Evidentiary Objections

    VCA Entities’ 12/23/21 evidentiary objections to the Declaration of Plaintiff are sustained as to Nos. 1, 2, and overruled as to Nos. 3, 4, 5, 6, 7, 8, and 9.

    VCA Entities’ evidentiary objections to the Declaration of Beck are overruled as to Nos. 11, 12, 13, 14, 15, 16, and 17.

    VCA Entities’ evidentiary objections to the Declaration of the Custodian of Records of CHLK are overruled as to Nos. 18, 19, 20, and 21.

    Background

    This action arises from a former business relationship between Plaintiff and Defendants Christopher Chang (“Chang”) and Susie Chang (“Susie”) (collectively, “the Chang Defendants”), who together formed multiple business entities including the VCA Entities. On October 27, 2017, Plaintiff filed this action against VCA Entities and the Chang Defendants, as individuals and as trustees of the Sue Huyn Chang Life Estate Trust (“the Trust”).

    VCA Entities filed the instant motion on October 1, 2021. Plaintiff filed his opposition and supporting materials on December 8, 2021. On December 14, 2021, Plaintiff filed a Declaration of Ik Su (Justin) Kang (“Kang”), Custodian of Records for Choi Hong Lee & Kang LLP (“CHKL”), Plaintiff’s accountants, which attaches records prepared by CHLK personnel that were demanded in a subpoena served on CHKL on November 3, 2021. On February 10, 2022, the Court granted Plaintiff’s ex parte application requesting the Court exercise its discretion to consider CHLK’s declaration notwithstanding its untimely filing. On February 17, 2022, the Court denied the motion for summary judgment brought by Chang Defendants.

    Request for Dismissal of Cambodian Entities & Forum Selection Clause

    VCA Entities argue that the claims asserted against the Cambodian Entities should be dismissed because Cambodian Entities’ bylaws provide that the exclusive forum for corporate disputes involving the entities is Cambodia. (Motion, pgs. 10, 15.) However, whether certain causes of action should be dismissed or stayed pursuant to the application of a binding forum selection clause is not a proper basis for a motion for summary judgment or summary adjudication. Arguments and evidence relating to the applicability of forum selection clauses in Cambodian Entities’ bylaws to the TAC’s causes of action are improperly raised in moving for summary judgment/adjudication, as their applicability would only entitle Cambodian Entities to an order that the instant action should be dismissed or stayed so the dispute may be heard in the proper forum, not that they are entitled to judgment in their favor on the causes of action asserted in the TAC. Accordingly, VCA Entities’ request that the causes of action asserted against Cambodian Entities be dismissed pursuant to the application of the forum selection clause is denied.

    Breach of Written Contracts (4th COA) [as to VCA and Cambodian Entities Only] [Issues Nos. 1-11]

    “The standard elements of a claim for breach of contract are: ‘(1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff therefrom.’” (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178.)

    Plaintiff’s breach of contract cause of action is based on two separate sets of agreements, the “Loan Agreements” and the “Joint Venture Agreement” (“JV Agreement”). With respect to the Loan Agreements, Plaintiff alleges the following: (1) in a December 2009 meeting, Plaintiff and Defendants entered into Loan Agreements pursuant to which Plaintiff agreed to loan $1,018,475 to VCA and $5,639,222 to VCA Cambodia and CA Cambodia (collectively, “the Cambodian Entities”) to fund business operations and for their benefit pursuant to the joint venture between Chang and Plaintiff, with the Loans payable within three months and with interest at the legal rate after the third month; (2) Plaintiff performed his loan obligations by paying VCA and the Cambodian Entities the stated amounts; (3) on August 2, 2017, Plaintiff demanded payment of $6,657,697, the principal amount of the two loans, plus interest; however, in response, Chang Defendants denied the Loans were loans, claimed they were capital contributions, and refused to pay Plaintiff; (4) Plaintiff performed all conditions of the Loans however Chang Defendants, VCA and the Cambodian Entities failed to perform by failing to pay the loan amounts demanded; (5) Plaintiff was harmed as a result. (TAC 72-78.)

    With respect to the JV Agreement, Plaintiff alleges the following: (1) the JV Agreement dated June 20, 2008 between Plaintiff and Chang provides that Plaintiff would pay $584,750 as 50% of the purchase price for Property 1 and $701,800 as 50% of the purchase price for Property 2, located in the Kingdom of Cambodia, which would be for the benefit of Defendants pursuant to the joint venture between Plaintiff and Defendants for use of those properties as manufacturing production facilities; (2) Defendants, by and through Chang, agreed Plaintiff would be paid 50% of proceeds (after deduction of taxes and expenses) upon sale of Property 1 and Property 2 and Chang would not unreasonably refuse to cooperate in the sale of the properties; (3) Plaintiff performed his obligations by paying the stated amounts for the purchase of the properties; (4) Defendants breached the JV Agreement by refusing to cooperate and proceed with the sale of the properties, harming plaintiff. (TAC 79-85.)

    Based on the above allegations, the breach of contract cause of action is based on Plaintiff’s loans made in three separate contexts: (1) loans to VCA, (2) loans to the Cambodian Entities, and (3) loans made in connection with the JV Agreement.

    VCA Entities move for summary adjudication on the breach of contract cause of action, which is based on these three underlying sets of contracts, on the grounds that an alleged breach of a particular contract gives rise to its own cause of action even if asserted in a count for relief where breaches of other agreements are alleged. (Motion, pg. 16, citing Edward Fineman Co. v. Sup. Ct. (1998) 66 Cal.App.4th 1110, 1118; 4 Witkin, Cal. Proc. 5th Plead. 63 (2020).) In opposition, Plaintiff argues the Court should not separately adjudicate each contract at issue since Plaintiff’s injury stems from a single underlying act—VCA and the Cambodian Entities’ refusal to make loan payments after 2017, which amounts to a breach of all of Plaintiff’s alleged loan agreements with them. (Opposition, pg. 9, citing Vera v. REL-BC, LLC (2021) 66 Cal.App.5th 57, 71.) However, Vera did not involve the timeliness of a breach of contract cause of action based on multiple contracts for purposes of determining whether a statute of limitation defense applies; rather, in Vera, the court addressed whether because the alleged breach was based on fraud, a three-year statute of limitations would apply pursuant to C.C.P. 338(d). Here, VCA Entities are entitled to move for summary adjudication on Plaintiff’s breach of contract cause of action based on the separate underlying contract or contracts at issue. The Court notes since VCA Entities are not moving for summary adjudication on the issue of whether Plaintiff can establish “breach” for purposes of the individual contracts, and indeed whether VCA and the Cambodian Entities’ failure to pay back loans after 2017 amounted to a single breach, as asserted by Plaintiff, whether the causes of action based on the individual contracts individually fail for separate reasons (time-barred, uncertain terms), may be adjudicated.

  1. Whether Plaintiff can establish his breach of contract cause of action based on the VCA Loans [Issues Nos. 1-4]

    VCA Entities submitted evidence that in response to discovery requests, Plaintiff asserts he made eight loans to VCA between September 2, 2010, and August 14, 2014, in the total amount of approximately $1,650,000. ([Disputed Separate Statement of Facts (“D-SSF”) No. 1] Ex. 2 at Interrog. 176 and Ex. 2.C at “Further Response” thereto; Ex. 3.D at pp. 4-5; see also Ex. 15.) VCA Entities submitted evidence none of the alleged VCA loan agreements are in writing. ([D-SSF No. 2] Ex. 6 [Ahn Depo.] at pp. 79:22-80:4 [Plaintiff testified that they did not make promissory notes acknowledging loans Plaintiff made to VCA].) VCA Entities argue certain VCA loan terms were uncertain, including when they were due to be paid back (the initial complaint indicated they were payable on demand, an allegation later changed to payable within three months) as well as the applicable interest rate (initial complaint did not allege interest, an allegation later changed to interest at the “legal rate”). (Motion, pg. 12.)

    VCA Entities move for summary adjudication of the breach of contract cause of action based on the VCA Loans on four separate issues: (1) the cause of action is time-barred [Issue No. 1]; (2) the VCA Loans’ repayment timeline terms are too uncertain to be enforceable [Issue No. 2]; (3) the VCA Loans’ applicable interest rates are too uncertain to be enforceable [Issue No. 3]; and (4) the VCA Loans are uncertain on “the other material terms regarding interest” to be enforceable [Issue No. 4].

  1. Statute of Limitations [Issue No. 1]

    In addition to the above evidence supporting their assertion that the cause of action is time-barred as to the VCA Loans, VCA Entities submitted evidence Plaintiff has asserted different repayment terms including that there was no specified time for repayment, the loans were payable on demand, and/or the loans were payable within three months of issuance. ([D-SSF No. 3] Complaint 34, TAC 33, 73; Ex.1 at Interrog. 121 and Ex. l .A at Resp. thereto; Ex. 2 at Interrog. 176 and Ex. 2.A at Resp. thereto, Ex. 2.B at Supplemental Response thereto, and Ex. 2.C at Further Response thereto; Ex. 3 at Interrog. 39, Exh. 3.A.) VCA Entities assert that if the loans were due to be paid within three months of their issuance, the latest point in time a cause of action for breach of any of the VCA Loans accrued was November 2014, three-months after August 14, 2014, the date of the last loan Plaintiff claims to have made to VCA, and as such the statute of limitations expired on November 14, 2016 given the two-year statute of limitations for oral agreements. (Motion, pgs. 17-18; [D-SSF No. 4] Ex. 2 at No. 176; Exh. 2.C (Further Response); Ex. 3.D at pp. 4-5; see also Ex. 15; Complaint 34, TAC 33, 73; Ex. 1 at No. 121, Ex. 2.A at Response Thereto, Ex. 2.B at Supplemental Response, Ex. 2.C at Further Response; Ex. 3 No. 39 and Ex. 3.A at Response; C.C.P. 339.) VCA Entities argue that since Plaintiff did not file his complaint until October 24, 2017, more than two years after the accrual date of the last of the VCA loans, the claim based on the VCA loans is time-barred. (Motion, pg. 17-18.) VCA entities assert that if the loans were payable on demand, the claims are still time-barred because, for “purposes of the statute of limitations, loans payable on demand are deemed payable at their inception, and the statute begins to run from such time” and there is no requirement a demand be made for the statute of limitations to start running. (Motion, pg. 18, citing Buffington v. Ohmert (1967) 253 Cal.App.2d 254, 256; citing Carrasco v. Greco Canning Co. (1943) 58 Cal.App.2d 673, 675.) Accordingly, under this theory the statute of limitations would have started running on the dates of the loans themselves, and at latest would have expired on August 14, 2016, making Plaintiff’s October 2017 filing of this action untimely.

    Based on the foregoing, VCA Entities met their burden on summary adjudication. Therefore, the burden shifts to Plaintiff to create a triable issue of material fact. As discussed below, Plaintiff met his burden.

    Plaintiff submitted evidence creating a triable issue of fact as to whether his breach contract cause of action based on the VCA Loans is time-barred. Specifically, Plaintiff submitted evidence that notwithstanding the agreements’ alleged repayment terms (as being either within three months or on demand), VCA Entities were complying with the agreements until December 2016, and as such, the cause of action did not accrue until that date. (Opposition, pgs. 10-11; Decl. of Ahn 6.) Plaintiff submitted evidence that the loans were made with the understanding that Plaintiff would be paid back when Entity Defendants were doing better and financially able to pay back and that these loan terms were generous given Plaintiff’s position as co-owner, officer, and director of the companies, flexibility in repayment that was only available so long as Plaintiff held those positions. ([Response to Separate Statement of Fact (“R-SSF”) No. 3] Decl. of Beck 2, 3, 4, Exhs. A, B, C (Ahn Depo 24:13-25; 25:5-24; 58:1-25; and 59:9-19); Decl. of Ahn 6.) Plaintiff submitted evidence suggesting that both the principal and interest payment amounts are reflected in VCA’s December 31, 2016 balance sheet, with the last payment made in December 2016. (Decl. of Ahn 6.) As such, even if VCA was obligated to repay the loans within three months, given VCA’s partial performance, a triable issue exists as to whether Plaintiff had sufficient notice of VCA’s breach of the loans until they failed to make further payments after December 2016. (See Lambert v. Commonwealth Land Title Ins. Co. (1991) 53 Cal.3d 1072, 1078 [In the context of successive breaches of a continuing contractual obligation: “ ‘In such a contract, where the parties did not mutually abandon or rescind it upon a breach or successive breaches, the injured party could wait until the time arrived for a complete performance by the other party and then bring an action for damages for such breaches. [Citation.] Respondent was not bound to treat the contract as abandoned on the first breach of it, or on any particular breach, but had his election to still rely on it, and the statute of limitations could not begin to run until it had made its election.’ ”].)

    Plaintiff’s evidence that VCA Entities were paying Plaintiff interest until December 31, 2016, creates a triable issue as to whether the statute of limitations was tolled. In reply, VCA Entities assert that Exhibits A and B do not show interest was paid, rather, they only show that interest was owed and as such, Plaintiff did not meet his burden of showing VCA repaid interest or any part of Plaintiff’s loans. (Reply, pg. 3.) However, a review of the exhibits demonstrates that between December 31, 2015, and December 31, 2016, the “Interest payable” for the Loan from shareholders decreased from $278,368.88 to $228,614.88, a change of $50,000. (Exh. A, pg. 5.) As such, it appears that at some point during 2016, this amount of interest was paid off. Given Plaintiff filed the instant action in October 2017, less than two years after January 1, 2016, if the statute was tolled to at least this date, there is a triable issue as to whether the breach of contract action based on these loans is time-barred.

    Based on the foregoing, VCA Entities’ motion for summary adjudication is denied as to Issue No. 1.

  2. Uncertainty of Agreements’ Terms [Issue Nos. 2, 3, & 4]

    VCA Entities argue the VCA Loan Agreements terms relating to payment, interest, and/or other material terms were too uncertain to be enforceable. (Motion, pgs. 19-20.) First, VCA Entities cite to the evidence discussed above, that Plaintiff asserts he made eight loans to VCA between September 2, 2010, and August 14, 2014. (Compare D-SSF No. 1 with D-SSF Nos. 8, 10, 12.) VCA Entities submitted evidence that the repayment date for each of these loans is uncertain. ([D-SSF No. 90] Complaint 34, TAC 33, 73 [alleges “Interest at the legal rate applied after the third month.”]; Ex. 1 at Interrog. 121 [“State all facts supporting your contention that pursuant to written agreement Plaintiff lhas provided loans to VCA in the total principal amount of $1,08,475…”] and Ex. 1.A at Resp. thereto [“[Plaintiff] entered into an agreement to loan $1,018,475 to [VCA] with a promise that the loan would be paid back”]; Ex. 2 at Interrog. No. 176 [“If you contend you made a loan to VCA during the relevant period, identify each loan you made…”] and Ex. 2.A at Resp. thereto [“9/2/201G $‘200,000; 9/20/2010 $150,000:12/20/2012 $100,000; 6/28/2013 $200,000; 7/9/2013 $300,000; 8/14/2014 $700,000.”], Ex. 2.B at "Supplemental Response" thereto [September 2, 2010, total amount of $200,000, check from Pacific City Bank. September 2, 2010, total amount of $200,000, cashier’s check from Pacific City Bank. September 20, 2010, total amount of $150,000. check from Pacific City Bank. December 20, 2012, total amount of $45,000, check form Pacific City Bank. December 17, 2012, $30,00.0August 14, 2014, total amount $700,000, check from Pacific City Bank. The interest rates on the loans made to VCA were 5.50% and 3.0 due to Defendants’ deterrence, this responding does not have further information, discovery is continuing and responding party has the right to supplement this response if additional information is obtained at a later time.”], and Ex. 2.C at "Further Response" thereto [same as above but identifies Check Numbers and does not identify interest rate]; Ex. 3 at Interrog. 39 [“State in detail all material terms of the alleged loan made by [Plaintiff] to VCA in the amount of $1,018,475 and Ex. 3.A at Resp. thereto [“The funds given to VGA are [sic] to be loans from shareholder and to be paid back upon demand. The interest rate of 5.50% to be paid for loans made prior to and up to 2013 and 3.0% to be paid for loans made in connection, with line of credit from Pacific City Bank.”].)

    VCA Entities submitted evidence that the interest rate for each of the eight loans is uncertain. ([D-SSF No. 11] Complaint 66; TAC 73; Ex. 1 at Interrog. 121 and Ex. l.A at Resp. thereto [above]; Ex. 3 at Interrogs. 39 [above], 85 [“State in detail all facts evidencing any loans you made to VCA.”] and Ex. 3.A at Resps. Thereto [above; “[Plaintiff] made loans to VCA in the total amount of $1,018,475. The interest rates on the loans made to VCA were 5.50% and 3.0%.”]; Ex. 2 at Interrog. 176 and Ex. 2.C at "Further Response" to No 176.)

    VCA Entities submitted evidence that Plaintiff did not identify when any interest begins or began accruing on each of the loans, the period of time for calculating interest on the loans, whether the interest is compounded, and/or how often interest on the loans is compounded. ([D-SSF Nos. 13, 14, 15, 16] Exh. 1 to Ex. 5.A [Plaintiff’s responses to form interrogatories relating to the loan agreements in which the stated terms are not identified.].)

    Based on the foregoing, VCA Entities met their burden on summary adjudication. Therefore, the burden shifts to Plaintiff to create a triable issue of material fact. As discussed below, Plaintiff met his burden.

    Plaintiff submitted evidence creating a triable issue of fact as to whether the terms of the loan agreements are certain enough to be enforced. As for Plaintiff’s evidence that the VCA loans’ repayment dates were uncertain, Plaintiff submitted evidence that the loans were made with the understanding that Plaintiff would be paid back when VCA Entities were financially able to do so, that these repayment terms were generous because of Plaintiff’s role in the companies, and that this flexibility in repayment was only available so long as Plaintiff held that role in the companies. ([R-SSF No. 9] Decl. of Beck 2, 3, Exhs. A, B; Decl. of Beck 4, Exh. C (Plaintiff Depo 24:13-25 [In response to question asking why $150,000 was lent to VCA, Plaintiff responded that “…when the company was down, money was lent. When the company was up, the money was repaid”]; 25:5-24 [this page of testimony was not provided]; 58:1-25 [Plaintiff’s testimony that an open ledger book and supporting documents of loans made and payments made was maintained]; and 59:9-19 [Plaintiff’s testimony that the open ledger was maintained by the accounting manager]); Decl. of Plaintiff 6.) In response to VCA’s separate statement of facts setting forth evidence that the terms of the interest rates and/or accrual of interest for the VCA loans were uncertain, Plaintiff submitted evidence suggesting the interest rates were not uncertain; rather, that Account No. 2900-100 had an interest rate of 5.50% and Account No. 235000 had an interest rate of 3.00%. ([R-SSF Nos. 11, 13 14, 15, 16] Decl. of Beck , 2, 4, Exhs. A, B; Decl. of Plaintiff, Exh. A.)

    Based on the foregoing, VCA Entities’ motion for summary adjudication is denied as to Issues Nos. 2, 3, and 4. Accordingly, summary adjudication of the 4th cause of action, based on the VCA Loans, is denied. As such, the motion for summary judgment is denied.

  1. Whether Plaintiff can establish his breach of contract cause of action based on the Cambodian Entities Loans [Issues Nos. 5-10]

    VCA Entities submitted evidence that in response to discovery requests, Plaintiff asserts he made 29 total loan agreements with the Cambodian Entities between July 1, 2010, and January 27, 2016. (Motion, pg. 13, Ex. 3.D at pp. 6-15; see also Ex. 15 [chart of relevant loans].) VCA Entities submitted evidence that the value of the loans Plaintiff allegedly made to the Cambodian Entities is uncertain, as Plaintiff’s responses to discovery and testimony at deposition have produced conflicting amounts. (Motion, pg. 13, citing Ex. 1 at Interrog. 124 and Ex 1.A at Resp. thereto with Ex. 3.D at pp. 6-15; Ex. 3 at Interrogs. 88 and 91, and Ex. 3.B at “Supplemental Responses” thereto; Ex. 3.C at “Further Responses” to Interrog. 88; Ex. 6 [Ahn Depo.] at pp. 67:4-24.) VCA Entities assert Plaintiff has not consistently set forth the maturity date, repayment schedule, or applicable interest rate for loans made to the Cambodian Entities. (Motion, pgs. 13-14, citing Complaint 34, 66, TAC 33, 73; Exh. 1 [Interrog No. 124]; Exh. 1.A [Response thereto]; Exh. 3 [Interoggs Nos. 88, 91], Exh. 3.A [Responses thereto], Exh. 3.B [supplemental responses thereto], Exhs. 3.C [further responses]; Ex. 6 [Ahn Depo.] at pp. 85:24-86:16, 89:16-22.) VCA Entities submitted evidence suggesting 11 of the 29 loans to the Cambodian Entities (between July 1, 2020 and January 21, 2011) are in writing, while the remaining 18 loans (between October 26, 2012 and January 27, 2016) are not in writing. (Ex. 3.D. at pp. 6-15 with Ex. 14; Decl. of Kang 16.)

    VCA Entities move for summary adjudication of the breach of contract cause of action based on the Cambodian Entities’ Loans on multiple issues based on the dates of the loans at issue. First, VCA Entities assert the cause of action is time-barred to the extent it is based on, (a) the 11 loan agreements made between July 1, 2010, and January 21, 2011 [Issue No. 5], and/or the 17 loan agreements made between October 26, 2012, and January 9, 2015 [Issue No. 6]. [The Court notes VCA Entities do not argue the January 27, 2016 loan is time-barred.] Second, with respect to the 18 loans made between October 26, 2012 and January 27, 2016, VCA Entities argue the loans are unenforceable based on the following issues: (a) the repayment terms are too uncertain [Issue No. 7]; (b) the identity of the borrower is too uncertain [Issue No. 8]; (c) whether interest applies is too uncertain [Issue No. 9]; and (d) “the other material terms regarding interest” are uncertain [Issue No. 10].

  1. Statute of Limitations: 11 Written Agreements from July 1, 2010, to January 21, 2011 [Issue No. 5]

    VCA Entities submitted evidence Plaintiff asserts he made 11 loans to the Cambodian Entities between July 1, 2010, and January 21, 2011, each of which was reflected in written loan agreements. ([D-SSF Nos. 17-18] Ex. 3.D, pp. 6-9 [discovery responses showing chart of loans]; Exh. 15; Exh. 14.) VCA Entities submitted evidence that each of the written loan agreements state that repayment shall be in three months from the signed date or upon demand. ([D-SSF No. 19] Exh. 14 [“Article 3. The lending period will be three months from the signed date or upon demand by Party “A” [Plaintiff].”].) The Court notes the written loan agreements also specifically provide that they are to be governed by Cambodian law. (Exh. 14.) VCA Entities assert that, as such, the latest point in time a cause of action for breach of any of the 11 Loan Agreements accrued was April 21, 2011 [three months after the signing date of the last of these loans] and that, accordingly, the four-year statute of limitations for these loans expired at latest on April 21, 2015, prior to Plaintiff’s October 2017 filing of the instant action. (Motion, pg. 21; [D-SSF Nos. 20, 21, 22] Exhs. 14, 12, Complaint.) The Court notes VCA Entities’ assertion that the claims are untimely over Cambodian law, which has a fiver year statute of limitations from the date of performance in the contract or from the date of the contract if the performance date is unclear. (Motion, pg. 21, fn. 5.)

    Based on the foregoing, VCA Entities met their burden on summary adjudication. Therefore, the burden shifts to Plaintiff to create a triable issue of material fact. As discussed below, Plaintiff did not meet his burden.

    In opposition, Plaintiff argues the loans to the Cambodian Entities are not time-barred because partial payments to repay the loans were made after the deadline for repayment had passed, with a final repayment made in the amount of $187,729.17 on January 12, 2017, and as such the statute of limitations had tolled until that date. (Opposition, pg. 13; Decl. of Ahn 6; [R-SSF Nos. 18, 19, 20] Decl. of Beck 4, Exh. C, Plaintiff Depo 24:13-25; 25:5-24; 58:1-25; and 59:9-19 [testimony summarized above], Decl. of Beck 5, 6, Exhs. D, E.) However, Plaintiff cites to no authority supporting his position that the tolling doctrine of C.C.P. 360 applies to the written loan agreements which are explicitly governed by Cambodian law. In addition, Plaintiff does not address how Exhibit D [the Cambodia Entities’ Shareholders’ Loan Ledger (“Ledger”)] or Exhibit E [the Ownership Valuation (“Valuation”) dated August 12, 2017] support his assertion that the Cambodian Entities made a payment of $187,729.17 on January 12, 2017, as a partial repayment of the loans Plaintiff had made to them. Line 70 of the Ledger’s chart indicates that on January 12, 2017, Account Number ABA 115839 made a payment in the amount of $187,729.17 to “Kang Hye Jung” with a Type label “Company” with a stated Purpose of “Check Amount USD [not legible, but possibly 5/4,78/366] and Cash USD 94,000 Final Payment of Kampong Spec Land.” (Exh. D.) Plaintiff contends this payment by the Cambodian Entities was made to him as partial repayment of his loans to them. However, this assertion is unsupported by the evidence itself, which does not indicate the payment was for repayment of a loan. It also does not even indicate the payment was made to Plaintiff. Notably, elsewhere on the Ledger, payments made to or by Plaintiff are reflected in the name of “Mr. Andrew” and/or “Mr. Ahn Young.” As such, Plaintiff’s assertion that the Ledger demonstrates the Cambodian Entities had been partially repaying his loans to them until January 2017 is unsupported. Plaintiff did not meet his burden of creating a triable issue of material fact as to whether the statute of limitations bars the breach of contract cause of action to the extent it is based on the 11 written loan agreements between Plaintiff and the Cambodian entities.

    Based on the foregoing, VCA Entities’ motion for summary adjudication is granted as to Issue No. 5.

  2. Statute of Limitations: 17 Unwritten Agreements from October 26, 2012, to January 9, 2015 [Issue No. 6]

VCA Entities submitted evidence Plaintiff asserts he made 17 loans to the Cambodian Entities between October 26, 2012, and January 9, 2015, none of which were reflected in written agreements. ([D-SSF Nos. 23, 24] Ex. 3.D, pp. 9-15; Exh. 15; Decl. of Kang 16, Exh. 3 at Interrog. 43 [“Identify all documents which evidence the alleged loan made by you to VCA in the amount of $5,639,222”] Ex. 3.A. at Responses thereto [“This responding party is not claiming he loaned $5,639,222 to VCA”]; Exs. 4 and 5 at Form Interrog. 50.1 and Exs. 4.A and 5.A at Resps. thereto [in response to request to identify documents that are part of the loan agreements Plaintiff did not identify documents].) VCA Entities submitted evidence that Plaintiff asserted there was either no time specified for the loans repayment, the loans were payable on demand, and/or the loans were payable within three months of their date. ([D-SSF No. 25] Complaint 34, TAC 33, 73; Ex. 1 at Interrog. 124 [State all facts supporting contention that pursuant to written agreements Plaintiff provided loans to [VCA Cambodia and CA Cambodia] in the amount of $5,639,222] and Ex. l.A. at Resp. thereto [“This responding party entered into an agreement to loan $5,639,222 to [VCA Cambodia and CA Cambodia] with a promise that the loan would be paid back.”]; Ex. 3 at Interrogs. 88 and 91 [state all facts evidencing any loans Plaintiff made to Cambodian Entities] and Ex. 3.A. at Responses thereto [“The funds given to [VCA Cambodia] and [CA Cambodia] are to be loans from shareholder and to be paid back within three months.”], Ex. 3.B at "Supplemental Responses" thereto [“Both [Plaintiff] and [Chang] made loans to [VCA Cambodia]. The total loan from [Plaintiff] is $6,282,948.07 and the total loan amount from [Chang] is $6,541,286.38, [Plaintiff’s] loans were wired, transferred or deposited from Advance Bank of Asia, Shinhan Bank, and Woori Bank. Cash deposits were also made by [Plaintiff]. [Chang’s] loans were wired, transferred or deposited from Advance Bank of Asia, funds from unidentified real property, various Korean Banks, and Mizuho Bank, The terms of the loan are as follows: interest is not charged by from lender, and the loan is to be paid back within three months from the date of signature…”], and Ex. 3.C at "Further Responses" thereto [multi-page response setting forth dates, account numbers, and loan amounts of the purported loans].) VCA Entities assert that given Plaintiff’s allegations and evidence, the latest point in time a cause of action for any of these 17 loan agreements not reflected in a writing accrued on April 9, 2015; however, Plaintiff did not file his complaint until October 2017. (Motion, pgs. 21-22; [D-SSF Nos. 26-27].)

Based on the foregoing, VCA Entities met their burden on summary adjudication. Therefore, the burden shifts to Plaintiff to create a triable issue of material fact. As discussed below, Plaintiff did not meet his burden.

Plaintiff failed to submit evidence creating a triable issue of fact as to whether the breach of contract cause of action based on the 17 unwritten loans to Cambodian Entities is barred by the statute of limitations. In opposition, Plaintiff asserts his loans to Cambodian Entities are not time-barred because they are in the book account and open. (Opposition, pgs. 14.) Specifically, Plaintiff argues that because the Ledger and Valuation exhibits reflect the very definition of a “book account” in that they record multiple loans made to Cambodian Entities exhibiting Plaintiff’s loans, and given the records show the outstanding balance of Plaintiff’s loans and the amount paid back to him and as such Cambodian Entities’ acknowledgment of those loans, the statute did not begin to run until October 24, 2017, the filing date of this action since that was the date the debt became fixed and the open account closed. (Opposition, pgs. 14-15.) However, Plaintiff’s TAC does not allege recovery under a book account theory, and as such, this argument is improperly raised for the first time in opposition. (Reply, pg. 6.) The issues to be determined in a motion for summary adjudication are framed by the pleadings, and here, Plaintiff has alleged Cambodian Entities breached contracts with Plaintiff and, in the context of this issue, breached 17 unwritten loan agreements Plaintiff made with Cambodian entities.

Based on the foregoing, VCA Entities’ motion for summary adjudication is granted as to Issue No. 6.

  1. Uncertainty of Agreements’ Terms: 18 Agreements from October 26, 2012, to January 27, 2017 [Issues Nos. 7, 8, 9, 10]

In light of the Court’s ruling on Issue No. 6, the loan agreements at issue in Issue No. 7 are moot with the exception of loan made on January 27, 2016 for $910,638.50, which does not fall within the two-year statute of limitations.

VCA Entities assert that even if the unwritten loans to Cambodian Entities are not time-barred, their terms [including maturity date, the parties thereto, and whether the loans are subject to interest and/or what interest rate applies] are too uncertain to be enforceable. (Motion, pgs. 22-23 [D-SSF Nos. 31, 32, 34, 36, 38, 39].) VCA Entities submitted evidence that in deposition, Plaintiff testified that these loans were “short term” but when he did not get paid back, the loans “became [] long term” without stating a new maturity date based on the new long-term loan status. (Motion, pg. 23, Exh. 6, Plaintiff Depo 85:24-86:16.) With respect to the January 27, 2016 loan of $910,638.50, VCA Entities submitted evidence that, in response to interrogatories, Plaintiff indicated the loan was made to pay off a line of credit pursuant to a 8/11/2015 agreement between VCA Cambodia and ABA Bank and the total amount from the sale of real property (approximately $1.8 million) was divided according to Plaintiff and Chang’s 50% interest, which were each loaned to VCA Cambodia to pay off the line of credit. (Exh. 3.D, pgs. 13-15.)

Based on the foregoing, VCA Entities met their burden on summary adjudication. Therefore, the burden shifts to Plaintiff to create a triable issue of material fact. As discussed below, Plaintiff did not meet his burden.

In opposition, Plaintiff asserts that the terms were not uncertain; rather, the repayment term was for the Cambodian Entities to repay the loan when they were financially able to do so and that this flexibility in repayment, made as a result of Plaintiff’s position, was only available so long as Plaintiff held his position with the company. (Opposition, pg. 15, Decl. of Plaintiff 6.) However, Plaintiff does not submit evidence creating a triable issue of fact as to whether the terms of Plaintiff’s August 2015 Loan were certain enough to be enforced. In the alternative, to the extent the records, ledger, and Ownership Valuation are not considered a written instrument exhibiting the terms of Plaintiff’s “loan,” Plaintiff argues that the Cambodian Entities repayments on Plaintiff’s loans create an implied contract where the existence and terms are manifested by conduct. (Opposition, pgs. 15-16, citing Civil Code 1621.) However, this argument exceeds the scope of the pleadings, Plaintiff has not alleged a cause of action for breach of implied contract, and as such it is improperly raised for the first time in opposition.

Based on the foregoing, VCA Entities’ motion for summary adjudication of Issues 7, 8, 9, and 10 is granted. Accordingly, VCA Entities motion for summary adjudication of the breach of contract cause of action based on Plaintiff’s loans to the Cambodian entities is granted.

  1. Whether Plaintiff can establish his breach of contract cause of action based on the JV Agreement [Issue No. 11]

    VCA Entities argue that none of the VCA Entities are party to the JV Agreement given Plaintiff’s allegations that the agreement is solely between Plaintiff and Chang. (Motion, pg. 15, TAC 25, 79-85; Exh. 7 [CHNG 013-015] and Ex. 7.A at p. 3:26-28.)

    VCA Entities submitted evidence that they are not parties to the June 20, 2008 JV Agreement between Plaintiff and Chang. ([D-SSF No. 40] TAC 25, 79-85; Exh. 7 [CHNG 013-015] PDF pgs. 119-121; Exh. 7.A (authentication).) A review of the JV Agreement reflects it is between Plaintiff and Chang, who entered into it for the purpose of investing in and thereby acquiring certain real property for the total purchase price of $1,100,000. The JV Agreement does not refer to entities owned or operated by Plaintiff and/or Chang. Accordingly, to the extent the breach of contract cause of action asserted against VCA Entities is based on their breach of the JV Agreement, VCA Entities submitted evidence suggesting Plaintiff cannot establish the existence of an agreement with VCA Entities.

    Based on the foregoing, VCA Entities met their burden on summary adjudication. Therefore, the burden shifts to Plaintiff to create a triable issue of material fact. As discussed below, Plaintiff did not meet his burden.

    Plaintiff failed to submit evidence creating a triable issue of fact as to the existence of an agreement between Plaintiff and the VCA Entities for the purposes of a breach of contract cause of action based on the JV Agreement. In opposition, Plaintiff asserts VCA Entities should be held liable because Chang is now claiming that VCA Entities own the real properties that are subject to and were purchased pursuant to the JV Agreement. (Opposition, pg. 16.) However, Plaintiff cites to no authority in support of this position. Plaintiff’s evidence only addresses his argument relating to the purpose of the JV Agreement (to purchase the property in a manner in which Plaintiff, a non-Cambodian citizen, would be able to hold an interest) and Chang’s current assertion that VCA owns the subject property. (See R-SSF No. 40, citing Decl. of Ahn 5; Decl. of Beck 7, 8, Exh. F [Chang Depo 89:13-23 and 145:20-25] Exh. G [JV Agreement].) However, Chang’s statements as to who claims to own the subject properties do not create contractual obligations for VCA Entities pursuant to the JV Agreement. There is no evidence, argument, or authority, that VCA Entities consented to be bound by the JV Agreement and/or that statements by a party to an agreement (here, Chang) can bind nonparties to that agreement.

    Based on the foregoing, VCA Entities motion for summary adjudication of Issue No. 11 is granted. Accordingly, the motion for summary adjudication of the breach of contract cause of action based on the JV Agreement is granted.

    Breach of Implied Covenant of Good Faith and Fair Dealing (5th COA) [Issues Nos. 12-15]

    Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.” (Hicks v. E.T. Legg & Associates (2001) 89 Cal.App.4th 496, 508.) “[T]he scope of conduct prohibited by the covenant of good faith is circumscribed by the purposes and express terms of the contract.” (Id. at 509.) “The covenant of good faith and fair dealing… exists… to prevent one contracting party from unfairly frustrating the other party’s right to receive the benefits of the agreement actually made.” (Guz v. Bechtel National Inc. (2000) 24 Cal.4th 317, 349.) The implied covenant “is designed to effectuate the intentions and reasonable expectations of parties reflected by mutual promises within the contract.” (Nein v. HostPro, Inc. (2009) 174 Cal.App.4th 833, 852.)

    Plaintiff’s breach of implied covenant cause of action is based on the following allegations: (1) the loan agreements and JV Agreement contained an implied covenant of good faith and fair dealing; (2) VCA Entities breached this covenant by engaging in the wrongful acts and omissions including by the VCA Entities being “conduits” used in furtherance of the conspiracy between Chang and Susie and in furtherance of their fraudulent activities; (3) Plaintiff has performed all conditions of the agreements; (4) “Defendants” have also engaged in and used as a conduit in the misconduct constituting a breach of fiduciary duty owed by Chang and Susie and fraud pursuant to and in furtherance of their conspiracy; and (5) Plaintiff has been damaged as a result. (TAC 87-94.)

    VCA Entities move for summary adjudication of the 5th cause of action on the grounds the underlying breach of contract cause of action is time-barred and/or to the extent the underlying contracts that are not enforceable for the same reasons as discussed above (the terms of the contracts are too indefinite to create enforceable contracts). (Motion, pgs. 24-25, Issues Nos. 12-15.) Specifically, VCA Entities move for summary adjudication of the cause of action on the following issues: (1) Issue No. 12: VCA Entities are entitled to summary adjudication because the underlying breach of contract causes of action are time-barred [incorporates SSF Nos. 1, 5, 6 (Issue No. 1)]; (2) Issue No. 13: VCA entities are entitled to summary adjudication because the underlying breach of contract causes of action are too uncertain to be enforceable or are not with the VCA Entities [incorporates SSF Nos. 2-4 (Issue No. 1) and 7-11 (Issue No. 2)]; (3) Issue No. 14: VCA NY and VChina [VCA Shanghai] are entitled to summary adjudication because they are not parties to the contracts upon which Plaintiff’s claims are based [the Court notes this addresses both the loan agreements and the JV Agreement (SSF Nos. 43-44)]; (4) Issue No. 15: VCA Entities are entitled to summary adjudication on the legal grounds that the conduct VCA Entities are charged with is not actionable as a breach of the implied covenant of good faith and fair dealing [no SSFs submitted]. (See Separate Statement, Response Separate Statement.)

    The Court notes VCA Entities group issues that were separately adjudicated above (i.e., the breach of contract cause of action based on the underlying JV Agreement, as opposed to the Cambodian Entities Loan, as opposed to the VCA loans) within a single issue for the purposes of this cause of action. Given the mixed ruling on the separate underlying issues, the Court is not in a position to grant summary adjudication on an issue in which the underlying issues were both granted and denied.

    Given the evidence and findings discussed above, VCA Entities motion for summary adjudication is denied as to Issues Nos. 12 and Issue No. 13.

    Issue No. 14 raises an argument and evidence not considered above, that the breach implied covenant of good faith and fair dealing cause of action based on any of the alleged underlying contracts should be adjudicated in VCA NY and VCA Shanghai’s favor on the grounds those defendants are not parties to any of the loan agreements and/or JV Agreement upon which the underlying breach of contract cause of action is based. (Motion, pg. 26, citing, TAC 71-85; Ex. 6 [Ahn Depo.] at pp. 67:14-68:5.) VCA NY and VCA Shanghai submitted evidence they are not party to the agreements underlying Plaintiff’s breach of contract cause of action. ([D-SSF No. 44] TAC 25, 73-74; 80; Ex. 6 [Ahn Depo.] at pp. 67:14-68:5 [PDF pgs. 98-99] [[in testimony discussing whether CA Cambodia was ever in solvent, Plaintiff testified that CA Cambodia was never insolvent to the point of needing to close the business because he and Chang personally loaned it, VCA Cambodia, and VCA LA funds; however, they did not loan VCA NY and/or VCA Shanghai funds]; Ex. 7 at document bates labeled CHNG 013-015 [JV Agreement, to which VCA NY and VCA Shanghai are not parties]; Ex. 7.A [authentication of JV Agreement].)

    Based on the foregoing, VCA NY and VCA Shanghai met their burden on summary adjudication of Issue 14. Therefore, the burden shifts to Plaintiff to create a triable issue of material fact. As discussed below, Plaintiff did not meet his burden.

    In opposition, Plaintiff does not address the argument that VCA NY and VCA Shanghai are not party to any of the underlying agreements for purposes of the 5th cause of action. (Opposition, pgs. 16-17.) In his response separate statement, Plaintiff asserts that he views all entity defendants as “one and the same” and that the assets have been manipulated usurped and wrongfully diverted to the entity defendants. ([R-SSF No. 44] Decl. of Beck 7, Exh. F Chang Depo 89:13-23 [Chang’s testimony that VCA owns two properties in Cambodia] and 145:20-25 [Chang’s testimony that VCA is a customer of VCambodia] [PDF pgs. 58-59.) However, it is not clear how the cited testimony, which in no way addresses VCA Shanghai and/or VCA NY supports Plaintiff’s conclusory assertion that all the entity defendants are “one and the same.” Beck declares that Chang’s testimony disregarded corporate separateness, however, to the extent it was disregarded that was not in connection with the at issue entities, VC NY and VCA Shanghai.

    Based on the foregoing, VCA NY and VCA Shanghai’s motion for summary adjudication of Issue No. 14 is granted. Accordingly, the motion for summary adjudication of the 5th cause of action as asserted against VCA NY and VCA Shanghai is granted.

    Contrary to the other issues as to which VCA Entities move for summary adjudication in connection with the 5th cause of action, Issue No. 15 is not based on the underlying contracts, but based on VCA Entities assertion that, as a matter of law, the alleged misconduct by VCA Entities, even if true, cannot form the basis of the cause of action. Namely, Plaintiff alleges VCA Entities breached the implied covenant through misconduct that is ascribed to other non-moving defendants (the Changs) in his other claims against them for fraud and breach of fiduciary duty. (Motion, pg. 26, citing Guz v. Bechtel Nat. Inc. (2000) 24 Cal.4th 317, 349-350 [The covenant “exists merely to prevent one contracting party from unfairly frustrating the other party’s right to receive the benefits of the agreement actually made… It cannot impose substantive duties or limits on the contracting parties beyond those incorporated in the specific terms of their agreement.”] citing also Racine & Laramie, Ltd. v. Dep. of Parks & Rec. (1992) 11 Cal.App.4th 1026, 1032 [The “implied covenant is limited to assuring compliance with the express terms of the contract, and cannot be extended to create obligations not contemplated in the contract”].) As such, there is no conduct alleged as to VCA Entities in connection with the underlying loan agreements. Moreover, no allegations of misconduct are made as to VCA Entities themselves aside from conclusory allegations of conspiracy in the misconduct of the Changs. (Motion, pgs. 25-26.)

    In opposition, Plaintiff does not address this argument, and only argues that the cause of action survives because the underlying breach of contract cause of action also survives. (Opposition, pgs. 16-17.) Plaintiff’s response separate statement makes a similar conclusory response. (R-SSF, pg. 26.)

    Taking into consideration Plaintiff’s allegations as to the basis for asserting the 5th cause of action against the VCA Entities, VCA Entities met their burden on summary adjudication, shifting the burden to Plaintiff to create a triable issue of material fact. However, Plaintiff did not meet his burden. The cause of action is based on the underlying misconduct of the Changs, and Plaintiff fails to address how VCA Entities, in breaching agreements to pay back loans, breached the implied covenant of good faith and fair dealing in those agreements.

    Based on the foregoing, VCA Entities’ motion for summary adjudication is granted as to Issue No. 15. Accordingly, VCA Entities’ motion for summary adjudication of the 5th cause of action is granted. In addition, as discussed above, VCA NY and VCA Shanghai’s own motion for summary adjudication of Issue No. 14, and accordingly, 5th cause of action as asserted against them, is granted. The motion is denied as to Issues Nos. 12 and 13.

    Accounting (7th COA)

    “A cause of action for an accounting requires a showing that a relationship exists between the plaintiff and defendant that requires an accounting, and that some balance is due the plaintiff that can only be ascertained by an accounting.” (Tesselle v. McLoulin (2009) 173 Cal.App. 4th 156, 179.) “It may be brought to compel the defendant to account to the plaintiff for money or property, (1) where a fiduciary relationship exists between the parties, or (2) where, even though no fiduciary relationship exists, the accounts are so complicated that an ordinary legal action demanding a fixed sum is impracticable.” (5 Witkin, Cal. Procedure Pleading 819.)

    Plaintiff’s accounting cause of action is based on the following allegations: (1) VCA Entities owe contractual duties to Plaintiff including the express duty to provide access to the books and accounts of VCA and the Subsidiary Entities; (2) VCA Entities have failed to provide access to the records, books and accounts; (3) the exact amount of money due from VCA Entities to Plaintiff is unknown and cannot be ascertained without an accounting. (TAC 100-102.)

    VCA Entities move for summary adjudication of the accounting cause of action on the grounds Plaintiff’s pleadings show he is not entitled to an accounting, the claim is superfluous, and the claim is derivative of Plaintiffs other claims and accordingly fails. (Motion, pgs. 26-27; Issues Nos. 16-18.) [The Court notes VCA Entities submit no material facts in support of these issues. (See Separate Statement, pgs. 16-17.)] Specifically, VCA Entities move for summary adjudication on the following issues: (1) Issue No. 16: legally, the claim is not available to Plaintiff given he has alleged recovery of a sum certain in his complaint; (2) Issue No. 17: legally, the claim is superfluous as to the amounts to which Plaintiff is entitled to recover, if any, will be adjudicated as part of Plaintiff’s other claims; (3) Issue No. 18: legally, the failure of Plaintiff’s other claims causes this cause of action to fail. (Separate Statement.)

    In light of the Court’s ruling denying summary adjudication as to the breach of contract cause of action based on the underlying VCA loans, VCA Entities motion for summary adjudication of Issue No. 18 is denied.

    In response, Plaintiff argues that while the sum of the shareholder loans to be repaid to Plaintiff may be certain and/or can be made certain by calculation, the valuation of Entity Defendants, Properties 1 and 2, and Entity Defendants’ good will are not certain without an account. (R-SSF pg. 27.) Plaintiff argues Entity Defendants have been conducting business for ten years prior to Plaintiff’s ouster, their accounts consist of internal documents, factor transaction documents, import export documents, financial documents, and invoices and proper accounting is complex and requires all relevant documents which are in the possession of the Changs and Entity Defendants. (R-SSF, pg. 27.) However, the only remaining basis for Plaintiff’s breach of contract cause of action is the underlying loan agreements to VCA, which Plaintiff concedes may be made certain by calculation. Accordingly, VCA Entities met their burden on summary adjudication of Issue No. 16, and Plaintiff failed to submit evidence creating a triable issue of material fact.

    Based on the foregoing, VCA Entities’ motion for summary adjudication of Issue No. 16 is granted. Accordingly, the motion for summary adjudication of the 7th cause of action is granted. The Court does not reach Issue No. 17. As noted above, the motion is denied as to Issue No. 18.

    Declaratory Relief (8th COA)

    A cause of action for declaratory relief requires the following elements: (1) person interested under a written instrument or a contract; or (2) a declaration of his or her rights or duties (a) with respect to another or (b) in respect to, in, over or upon property; and (3) an actual controversy. (C.C.P. 1060.)

    Plaintiff’s declaratory relief cause of action is based on the following allegations: (1) Plaintiff was unlawfully ousted as CFO and Co-Director of VCA and the Subsidiary Entities after February 2017; (2) an actual controversy has arisen between Plaintiff on the one hand and VCA Entities and the Changs on the other concerning their respective rights and duties with respect to Plaintiff’s ouster; (3) Plaintiff desires a judicial determination of his respective rights and duties; (4) a judicial determination is necessary. (TAC 104-106.)

    VCA Entities move for summary adjudication of the declaratory relief cause of action on the grounds Plaintiff does not allege a valid basis for relief, the declaration sought is too vague, the claim is unnecessary, and the claim is derivative. (Motion, pgs. 27-28; Issues Nos. 19-21.) Specifically, VCA Entities move for summary adjudication on the following issues: (1) Issue No. 19: no legal basis for declaratory relief; (2) Issue No. 20: the Court should exercise discretion and deny; (3) Issue No. 21: declaratory relief is duplicative of Plaintiff’s other claims; (4) Issue No. 22: failure of Plaintiff’s other claims causes the declaratory relief claim to fail.

    As a preliminary matter, in light of the Court’s ruling above, VCA Entities motion for summary adjudication of Issue No. 22 is denied.

    VCA Entities note Plaintiff does not set forth a valid subject for declaratory relief, which is only available to a party who seeks a determination of his rights regarding a contact, other written instrument other than a will or trust, with respect to property, to determine the course of a waterway, and/or to interpret a statute. (C.C.P. 1060; California Pub. Records Research, Inc. v. Cty. of Yolo (2016) 4 Cal.App.5th 150, 185.) On its face, the TAC asks the Court to make a determination that the ouster of Plaintiff was improper and to make a determination as to the parties’ rights and obligations. VCA Entities met their burden on Issue No. 19, that Plaintiff does not have a legal basis for declaratory relief.

    In response, Plaintiff cites to the allegations of his TAC and argues that because the unlawful acts of the Changs are imputed to Entity Defendants, Plaintiff desires the Court make a declaration of Plaintiff’s rights with respect to the result of those wrongful and illegal acts. (R-SSF No. 28.) However, Plaintiff fails to address the fact the relief he seeks does not have a legal basis. As such, Plaintiff has not met his burden of submitting evidence or argument sufficient to create at triable issue of material fact.

    Based on the foregoing, VCA Entities’ motion for summary adjudication of Issue No. 19 is granted. Accordingly, VCA Entities’ motion for summary adjudication of the 8th cause of action is granted. The motion is denied as to Issue No. 22 and the Court does not reach Issues Nos. 20 or 21.

    Conclusion

    VCA Entities’ motion for summary judgment is denied. The motion for summary adjudication is denied as to Issues No. 1, 2, 3, 4, 12, 13, 18, and 22, and granted as to Issues Nos. 5, 6, 7, 8, 9, 10, 11, 14, 15, 16, and 19. Accordingly, the motion for summary adjudication is denied as to the 1st cause of action based on the VCA Loans and granted as to the 1st (Cambodian Entities Loans and JV Agreement), 5th, 7th, and 8th causes of action. The Court does not reach Issues Nos. 17, 20, or 21.

    Dated: April , 2022

    Hon. Monica Bachner

    Judge of the Superior Court



Case Number: ****0875 Hearing Date: February 10, 2022 Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

ANDREW YOUNG AHN,

vs.

VOLUMECOCOMO APPAREL, INC. a California corporation, et al.

Case No.: ****0875

Hearing Date: February 10, 2022

Defendants Christopher Chang and Susie Chang’s motion for summary judgment is denied.

VCA Entities’ motion for summary judgment is continued to .

Defendants Christopher Chang (“Chang”) and Susie Chang (“Susie”) (collectively, “Defendants” or “Chang Defendants”) move for moves for summary judgment on the third amended complaint (“TAC”) of Plaintiff Andrew Yong Ahn (“Plaintiff”) on the grounds the claims are subject to forum selection clauses and/or are barred by the business judgment rule, the applicable statutes of limitations, one or more elements of the claims fail as a matter of law, and/or Plaintiff cannot submit evidence creating a triable issue of material fact for his causes of action. (Notice of Motion, pg. 2.) In the alternative, Defendants move for summary adjudication on “one or more of Plaintiff’s claims” because they either fail for the above reasons or are alternate theories of liability that have improperly been pled as causes of action. (Notice of Motion, pg. 2.)

Defendants’ notice of motion fails to identify the individual causes of action as to which Defendants move for summary adjudication. In his TAC, Plaintiff asserts his 1st (breach of fiduciary duty), 2nd (constructive fraud), 4th (breach of written contracts), 5th (breach of implied covenant of good faith and fair dealing), 6th (negligence), 7th (accounting), and 8th (declaratory relief) causes of action against Defendants, while his 3rd (removal of director) cause of action is asserted against Christopher only. The Court notes the TAC defines VCA NY, VCA Shanghai, VCA Cambodia and CA Cambodia as subsidiary entities of VCA and refers to them as “Subsidiary Entities,” a term that is also used in discovery requests and responses. (TAC 7.)

CRC Violations and Procedural Issues

CRC Rule 3.1350(b) provides, as follows: “If made in the alternative, a motion for summary adjudication may make reference to and depend on the same evidence submitted in support of the summary judgment motion. If summary adjudication is sought, whether separately or as an alternative to the motion for summary judgment, the specific cause of action, affirmative defense, claims for damages, or issues of duty must be stated specifically in the notice of motion and be repeated, verbatim, in the separate statement of undisputed material facts.”

Defendants’ Notice of Motion and Separate Statement do not comply with CRC 3.1350(b). The Notice of Motion does not state the specific causes of action as to which Defendants seek adjudication. As such, the Separate Statement does not and cannot repeat verbatim any such causes of action, and it moreover fails to identify the causes of action as to which adjudication is sought.

Defendants’ Separate Statement also does not comply with CRC 3.1350(d) and (f). It does not properly identify each cause of action that is the subject of the motion and each “supporting material fact claimed to be without dispute” with respect to each cause of action. (CRC 3.1350(d)(1)(A)-(B).) The separate statement merely contains a total of 32 separate material facts.

In light of Defendants’ defective Notice of Motion and Separate Statement, which fail to give sufficient notice of the causes of action as to which adjudication is sought, the Court considers the instant motion as a motion for summary judgment only.

Defendants’ Separate Statement improperly cites to entire exhibits to support various separate material facts without citing to the page number and/or paragraph number in such exhibit that supports the fact asserted. For instance, nearly all the SSFs cite to “Exhibit 23 – Individual Defendants’ Further Responses to Plaintiff’s Special Interrogatories,” a 20-page document without citing which response supports the fact asserted by either page number or interrogatory number. (See SSFs Nos. 1-29.) Similarly, various SSFs cite to the Declaration of Rudnick, without citing a paragraph number, as well as Plaintiff’s responses to discovery requests without citing to the page or request number.

Defendants’ motion improperly relies on and refers to facts and evidence submitted in the Separate Statement of Facts filed by VCA in support of VCA’s motion. (Motion, pg. 19, fn. 5.) However, to the extent these facts and evidence are not included in Defendants’ Separate Statement, they are not properly before the Court in ruling on Defendants’ motion for summary judgment.

Plaintiff’s 12/8/21 evidentiary objections are procedurally improper and fail to comply with CRC Rule 3.1354(b). Plaintiff objects to individual facts asserted in the Separate Statement of Facts (“SSF”) and the evidence underlying such SSFs. However, the SSFs are not evidence subject to an evidentiary objection. To the extent Plaintiff objects to the underlying evidence, the objections violate CRC Rule 3.1354(b)(3) in that they fail to quote or set forth the objectionable statement or material. Given multiple SSFs cite to the multiple sources of evidence, the evidentiary objections to the SSF as whole are uncertain. Plaintiff is not entitled to a ruling on these objections.

Plaintiff’s Response Separate Statement includes responses that do not comply with CRC Rule 3.1350(f)(2)-(3). First, in response to certain facts, Plaintiff improperly indicates the fact is disputed as to a certain piece of evidence Defendants cite in support thereof, but not whether the fact itself is disputed or undisputed. Notably, for these facts, Plaintiff does not “dispute” other evidence supporting the same fact. To the extent Plaintiff contends the facts themselves are disputed, Plaintiff’s responses are noncompliant since they fail to describe the nature of the dispute and/or describe and cite to evidence supporting his assertion the fact is controverted. (See Responses to Separate Statement of Material Facts (“R-SSF”) Nos. 1, 2, 7.) As such, these facts are effectively undisputed.

Defendants’ 12/23/21 evidentiary objections are procedurally improper. Defendants object to representations Plaintiff makes in his opposition, which are arguments and not evidence subject to evidentiary objection. Defendants also object to paragraphs from the Declaration of Plaintiff without quoting or setting forth the objectional statement or material in violation of CRC Rule 3.1354(b)(3).

Defendants’ reply incorporates various evidentiary objections that are not properly cited, and as such, the Court cannot determine which evidentiary objections and indeed what evidence submitted by Plaintiff, Defendants are addressing. (Motion, pgs. 2, 5, 7, 10, fn. 12.)

Evidentiary Objections

Plaintiff’s 12/8/21 evidentiary objections are procedurally improper, as discussed above. The objections are overruled.

The Court notes Defendants’ 12/23/21 evidentiary objections are captioned as a Proposed Order, not as evidentiary objections. Certain objections are procedurally improper, as discussed above. Defendants’ evidentiary objections are overruled as to Nos. 1, 2, 3, 4, 5, and 6. The Court overrules Defendants’ objection to the untimely declaration of CHLK’s custodian of records (No. 4) and elects to consider the declaration.

Defendants’ evidentiary objections to the Declaration of Plaintiff are sustained as to Nos. 7, 8 (only as to “in retaliation” otherwise overruled), 9, 10, 15, 17, 18, 28, 29, 30, 34, 35, 37 (sustained as to “This was Mr. Chang’s valuation rather than the ‘company valuation’” otherwise overruled), 39, 40 (only as to “Fraudulently” “under the guise of… buyout” and “wrongfully” otherwise overruled), and 41 (only as to “intentionally disregarding corporate formalities by” otherwise overruled), and overruled as to Nos. 11, 12, 13, 14, 16, 19, 20, 21, 22, 23, 24, 25, 26, 27, 31, 32, 33, 36, 38, and 42.

Defendants’ evidentiary objections to the Declaration of James K. Beck (“Beck”) are overruled as to Nos. 43 (testimony of Plaintiff), 44 (testimony of Plaintiff) and sustained as to No. 45.

Background

This action arises from a former business relationship between Plaintiff and Defendants, who together formed multiple business entities including Defendant VolumeCocomo Apparel, Inc. (“VCA”), VolumeCocomo Apparel, Inc. of New York (“VCA NY” or “VCNY”), VolumeCocomo Apparel Shanghai Co. Ltd. (“VCA Shanghai”), VolumeCocomo Apparel Cambodia, Inc. (“VCA Cambodia”), Cocovol Apparel Cambodia, Inc. (“CA Cambodia”), VolumeCocomo Apparel Korea, Inc. (“VCA Korea”) (collectively, “Entity Defendants” or “VCA Entities”). On October 27, 2017, Plaintiff filed this action against the Entity Defendants and the Chang Defendants, as individuals and as trustees of the Sue Huyn Chang Life Estate Trust (“the Trust”).

Defendants filed the instant motion on October 4, 2021, with a hearing date set for January 4, 2022. The Court notes Entity Defendants filed their motion for summary judgment on October 1, 2021, and its hearing date was advanced to the same day as the instant motion. Plaintiff filed his opposition and supporting materials on December 8, 2021. On December 14, 2021, Plaintiff filed a Declaration of Ik Su (Justin) Kang (“Kang”), Custodian of Records for Choi Hong Lee & Kang LLP (“CHKL”), Plaintiff’s accountants, which attaches records prepared by CHLK personnel that were demanded in a subpoena served on CHKL on November 3, 2021. [The Court notes Plaintiff has filed this declaration in connection with his opposition to both summary judgment motions.] On December 23, 2021, Defendants filed their reply, objections, and supplemental evidence. The Court continued the hearing on the motion to February 10, 2022, and on January 4, 2022, Plaintiff applied ex parte requesting the Court exercise its discretion to consider CHLK’s declaration and for further briefing in support of Plaintiff’s opposition to Entity Defendants’ motion. As discussed above, the Court will consider the declaration of Kang as CHKL’s custodian of records notwithstanding its untimely filing.

In light of Defendants’ failure to properly move for summary adjudication of individual causes of action asserted in Plaintiff’s TAC, Defendants have the burden of establishing each cause of action has no merit in moving for summary judgment on the TAC as a whole. As such, to the extent Defendants meet their burden in making such a showing, the burden shifts to Plaintiff to create a triable issue of fact. Plaintiff need only submit evidence creating a triable issue of fact as to whether he can establish a single cause of action to be entitled to a ruling denying the motion for summary judgment.

Undisputed Facts

It is undisputed that Chang and Plaintiff created VCA on or about July 19, 2007 and at formation, each owned 50% of VCA, which is still the case today. (USSF Nos. 1, 2 (“USSF” refers to undisputed facts).) As noted above, Plaintiff disputes Exhibits 17 and 22 of the Declaration of Abner for not stating the date of formation and/or the VCA ownership information, but does not dispute Exhibit 23, pg. 3, which sets forth the fact VCA was formed by Plaintiff and Christopher on the stated date with the stated ownership distribution, and as such, the facts themselves are undisputed.) The parties do not dispute that on December 30, 2009, Plaintiff and Chang merged Volume One Apparel, Inc. and Cocomo Apparel, Inc. (the “Predecessor Entities”) into VCA, as indicated by the merger statements filed for the three companies on the same date. ([Disputed Separate Statement of Fact (“D-SSF”) No. 3] Decl. of Abner, Exhs. 17, 22, 23, not disputed as to merger date.) In 2007, Plaintiff and Chang partnered to form VCA Cambodia to provide garment production for the Predecessor Entities’ respective wholesale apparel businesses. (USSF No. 6.) The Predecessor Entities each owned 50% of VCA Cambodia. (USSF No. 7.)

The parties do not dispute that in June 2016, Plaintiff and Chang met with VCA NY sales representatives including Steve Gjolanga (“Gjolanga”) and Mitch Rudnick (“Rudnick”) at the VCA NY office conference room. (USSF No. 16.) The parties do not dispute that both of the Cambodian corporate entities used or currently use the Cambodian real property in their daily operations. (USSF No. 29.) It is undisputed that Article 26 of the VCA Cambodia Statute provides as follows: “All derivative actions or litigation, which have arisen among shareholders or between shareholder and the Director or the company’s staff in the duration of the company’s operational period, or in the period of liquidation, will be solved by reconciliation in the company. In case an agreement cannot be reached, both parties can submit the litigation for: [r]econciliation before the Council for the Development of Cambodia, or [t]rial of a tribunal of the Kingdom of Cambodia, or [a]rbitration Inside or outside of the Kingdom of Cambodia according to agreement of both parties…” (USSF No. 30.) In addition, the parties do not dispute the parties executed the VCA Cambodia and Cocovol corporate statutes. (USSF No. 31.)

Forum Selection Clause

Defendants argue they are entitled to enforcement of the contractual forum selection clause, which governs the parties’ claims. (Motion, pgs. 10-13.) However, whether the instant action should be dismissed or stayed pursuant to the application of a binding forum selection clause is not a proper basis for a motion for summary judgment. (See C.C.P. 437c(a) [“A party may move for summary judgment in an action… if it is contended that the action has no merit or that there is no defense to the action or proceeding…”; see C.C.P. 437c(c) [“The motion… shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law…”].) Defendants’ arguments and evidence relating to the applicability of forum selection clauses to claims raised in Plaintiff’s TAC are improperly raised in moving for summary judgment, as their applicability would only entitle Defendants to an order that the instant action should be dismissed or stayed so the dispute may be heard in the proper forum, not that Defendants are entitled to judgment in their favor on the claims raised in Plaintiff’s TAC. Accordingly, Defendants’ motion for summary judgment on the grounds the claims are barred by the forum selection clause is denied.

Breach of Fiduciary Duty & Negligence (1st & 6th COAs) – Business Judgment Rule

“To establish a cause of action for breach of fiduciary duty, a plaintiff must demonstrate the existence of a fiduciary relationship, breach of that duty and damages.” (Charnay v. Cobert (2006) 145 Cal.App.4th 170, 182.)

A cause of action for professional negligence involves the following elements: “(1) the duty of the professional to use such skill, prudence, and diligence as other members of his profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the negligent conduct and the resulting injury; and (4) actual loss or damage resulting from the professional's negligence.” (Mattco Forge, Inc. v. Arthur Young & Co. (1997) 52 Cal.App.4th 820, 833.)

The breach of fiduciary duty cause of action is based on the following allegations: (1) Defendants owed Plaintiff fiduciary duties; and (2) Defendants breached those duties by: (a) ousting Plaintiff as CFO and co-director of VCA and Entity Defendants (b) refusing to Plaintiff’s access to VCA and Entity Defendants’ corporate books records, (c) Hana Financial’s terminating Plaintiff’s online access to VCA records without notice or authorization, and in violation of Plaintiffs legal rights, (d) Hana Financial’s refusal to restore Plaintiff’s online access, (e) instructing employees of VCA, Entity Defendants, and Hana Financial to disregard Plaintiff’s requests for information and instructions, (f) changing passwords and key locks to end Plaintiff’s access to VCA and Entity Defendants’ facilities, (g) deleting Plaintiff’s VCA business email address without notice or authorization, (h) filing the fraudulent Statement of Information, (i) defrauding Plaintiff to encumber his residential property for the remaining $1,000,000 collateral obligation amount to Hana Financial on October 4, 2017, (j) defrauding Plaintiff to make loans to totaling $6,657,697 plus interest, and falsely claiming that they were capital contributions, and (k) defrauding Plaintiff to purchase 50% ownership interests in Property 1 and Property 2 in Cambodia and presently refusing to allow the sale thereof to go forward to deny Plaintiff his share of the proceeds there from in the amount $1,797,544. (TAC 47-48.) Plaintiff alleges Defendants conspired to induce Plaintiff to (1) establish VCA and thereafter Entity Defendants, (2) make investments and loans in connection with VCA and Entity Defendants, (3) provide his valuable services as CFO of VCA and Entity Defendants, and (4) accept liabilities and pledge collateral as guarantor to Hana Financial for the credit facilities provided to VCA and Entity Defendants pursuant to their joint venture with Plaintiff, under false pretenses to enrich themselves at Plaintiff’s expense. (TAC 49.)

Plaintiff alleges Defendants’ breaches of their fiduciary duties and conspiracy to breach those duties caused Plaintiff damages in the amount of $20,130,323 (the sum of Loans in the total principal amount of $6,657,697, Plaintiff’s share of the appraised value of Property 1 and Property 2 in the amount of $1,797,544, Plaintiff’s share of the valuation of VCA and Entity Defendants on an actual cost basis of their tangible assets in the amount of $1,675,082, and fair market value over and above the actual cost basis of the tangible assets of VCA and Entity Defendants in the amount of $10,000,000), general damages in the amount of $500,000, loss of compensation as director and CFO in the amount of $20,700.55 from December 2017 to present), special damages, and other compensable damages according to proof at trial including reasonable costs. (TAC 51.) Plaintiff alleges as a result of Defendants’ breach of fiduciary duty, he is threatened with the complete loss of his property including the value of his loans, his shares of the appraised values of Property 1 and Property 2, VCA and Entity Defendants, and the tangible assets of VCA and the Entity Defendants. (TAC 53.) Plaintiff’s negligence cause of action is based on the same underlying allegations as his breach of fiduciary duty cause of action. (See TAC 96-98.)

Defendants argue Plaintiff’s breach of fiduciary duty and negligence causes of action are barred as a matter of law by the Business Judgment Rule because Plaintiff cannot establish that any decision made by Defendants was in bad faith or lacked an honest belief in serving the best interests of the companies and their shareholders. (Motion, pgs. 14-15.) As such, it appears Defendants argue Plaintiff cannot establish the element of breach for the purposes of either cause of action, given the conduct that Plaintiff alleges amounted to breaches were actually business judgment decisions. Defendants also argue they can show Plaintiff lacks necessary evidence to establish elements of a claim based on the Plaintiff’s factually devoid discovery responses. (Motion, pg. 15.)

“[I]n California, corporate directors owe a fiduciary duty to the corporation and its shareholders and now as set out by statute, must serve ‘in good faith, in a manner such director believes to be in the best interests of the corporation and its shareholders.’ ” (Berg & Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1037, citing Corp. Code 309(a).) “[T]he business judgment rule has been codified… at Corporations Code section 309. But the common law rule ‘has two components—one which immunizes directors from personal liability if they act in accordance with its requirements, and another which insulates from court intervention those management decisions which are made by directors in good faith in what the directors believe is the organization’s best interest. Only the first component is embodied in [Section 309].” (Id. at 1045 (citations omitted).) “[T]he rule establishes a presumption that directors' decisions are based on sound business judgment, and it prohibits courts from interfering in business decisions made by the directors in good faith and in the absence of a conflict of interest… [where] “ ‘A hallmark of the business judgment rule is that a court will not substitute its judgment for that of the board if the latter's decision can be “attributed to any rational business purpose.”’ ” (Ibid. (citations omitted).) “An exception to the presumption afforded by the business judgment rule accordingly exists in ‘circumstances which inherently raise an inference of conflict of interest’ and the rule ‘does not shield actions taken without reasonable inquiry, with improper motives, or as a result of a conflict of interest.’ ” (Ibid. (citations omitted).) “In most cases, ‘the presumption created by the business judgment rule can be rebutted only by affirmative allegations of facts which, if proven, would establish fraud, bad faith, overreaching or an unreasonable failure to investigate material facts.’ ” (Id. at 1046 (citations omitted).)

“[A] moving defendant may rely on factually devoid discovery responses to shift the burden of proof pursuant to [C.C.P. 437c(o)(2)]. Once the burden shifts as a result of the factually devoid discovery responses, the plaintiff must set forth specific facts which prove the existence of a triable issue of material fact.” (Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 590.)

Defendants submitted evidence Plaintiff told Chang and company employees in May 2016 that he would be resigning his positions with the VCA Entities effective at the end of December 2016. ([D-SSF Nos. 14, 17] Decl. of Adler, Exh. 23 [Interrogatory number not cited]; Decl. of Rudnick 5.). Defendants submitted evidence Plaintiff announced his intentions to VCNY employees in June 2016. ([D-SSF No. 33] Decl. of Rudnick, Exh. 24 [Responses to RFAs], Exh. 25 [Responses to RFPs], Exh. 26 [Responses to Special Interrogatories (Set Three)].). Defendants submitted evidence that after Plaintiff’s retirement announcement, he did not visit the VCNY offices until June of 2017. (Decl. of Rudnick 9.) Defendants submitted a declaration of Mark Kang (“Kang”), a former employee familiar with Plaintiff’s use of the Los Angeles offices, who declared that beginning in 2015, Plaintiff’s attendance at the Los Angeles office dropped, and the last time he saw Plaintiff in the Los Angeles office was in January of 2017. (Exhibit 20, Decl. of Kang 4, 6.) Defendants argue that the actions, inactions, and decisions cited in paragraph 48 of the TAC occurred after Plaintiff’s announcement of his retirement. (Motion, pg. 15, citing Exhibit 23, Response No. 1.) Defendants appear to therefore argue that because Defendants’ alleged misconduct occurred after Plaintiff’s retirement announcement, Defendants no longer owed Plaintiff fiduciary duties that could be breached, and any decisions they made (or actions they did not take) on behalf of the companies were protected by the business judgment rule. Defendants also argue that Plaintiff’s lack of evidence is established by his responses to Defendants’ discovery requests which asked him to identify all facts and documents supporting his claim; however, Plaintiff’s responses merely restate the conclusory allegations of the TAC without offering facts in support thereof. (Motion, pg. 15, citing Exhibits 24, 25, 26.)

Defendants have not met their burden in moving for summary judgment. Defendants did not submit sufficient evidence and/or argument supporting their assertion that the alleged misconduct is protected by the business judgment rule. Defendants fail to sufficiently address how Plaintiff’s purportedly factually devoid discovery responses create an inference of an absence of evidence supporting the breach of fiduciary and negligence causes of action or that the business judgment rule bars these causes of action. As a threshold matter, the motion includes no specific citations to discovery requests and/or their responses to support this contention, but only asserts that the responses regurgitate the same conclusory allegations made in the pleading. However, Defendants have the burden of proof in moving for summary judgment, and this argument is insufficient to meet that burden.

“On summary judgment, an alternative method by which a defendant may meet its burden of showing that an essential element of the plaintiff’s claim cannot be established is to present evidence that the plaintiff ‘does not possess and cannot reasonably obtain, needed evidence.’ [Citation.] But unlike federal law, summary judgment law in California requires the defendant to present evidence, and not simply point out through argument, that the plaintiff does not possess and cannot reasonably obtain the needed evidence. [Citation.] Such evidence may consist of…the plaintiff’s factually devoid discovery responses…” (Lona v. Citibank, N.A. (2011) 202 Cal.App.4th 89, 110.) Defendants cite to Plaintiff’s responses to Requests for Admission (Set Two) [Exh. 24], Requests for Production of Documents (Set Three) [Exh. 25], and Special Interrogatories (Set Three) [Exh. 26].

Defendants’ Special Interrogatories seek the following information: (1) contact information for various individuals [Nos. 157-165]; (2) that Plaintiff identify all communications with those individuals related to the litigation in the relevant period [Nos. 166-174]; and (3) that if Plaintiff denied RFAs Nos. 48-90, to identify each document Plaintiff contends is responsive to the at issue RFP, Nos. 224-279 [Nos. 175-217]. Plaintiff’s responses to the contact information and communication interrogatories vary, but generally object to the requests as overbroad and seeking confidential information, while some identify individuals and communications, with most responding that, “There is a lawsuit between Andrew Ahn, Christopher Chang, and Susie Chang.” In response to Nos. 175-217, Plaintiff responded, “N/A.”

Defendants’ Requests for Admission (“RFAs”) Nos. 48-90 request Plaintiff to admit that he has no documents responsive to RFPs Nos. 224-279. The RFAs also request Plaintiff admit that he received a valuation report on February 28, 2017, since receiving it Plaintiff refused to sell shares in VCA and Entity Defendants, Plaintiff hired an appraiser, and Plaintiff disputes the valuation generated by his appraiser (RFAs Nos. 91-96). In response to RFAs Nos. 48-90, Plaintiff asserts various objections and responds that he lacks sufficient information to admit or deny. In response to RFAs Nos. 91, 92, 94, 96 Plaintiff asserts objections and that he lacks sufficient information or knowledge to admit or deny because there are multiple valuations and Plaintiff will not speculate as to which valuation the requests refer to. Plaintiff responded “Admit” to Nos. 93 [hired his own appraiser] and 95 [hired his own appraiser].

The Court notes Defendants’ Requests for Production includes 152 separate requests, making the requests themselves 24-pages long and Plaintiff’s responses 56-pages long. Plaintiff made objections, but also provided responses indicating, for example, that Plaintiff will provide all responsive documents in its possession, custody and control, or that no responsive documents ever existed. (See Response to RFAs Nos. 174, 178Defendants have not identified which of Plaintiff’s responses to which Requests for Production amount to factually devoid responses necessitating the burden shift to Plaintiff. Defendants have the burden in moving for summary judgment, and the Court declines to use resources in combing through Plaintiff’s discovery responses to determine their deficiency where the burden is on Defendants in the instant motion.

The Court finds Plaintiff’s responses to the Discovery Requests are not factually devoid so as to shift the burden from Defendants to Plaintiff to show triable issues of material fact exist in Plaintiff’s breach of fiduciary duty and negligence causes of action. Defendants cannot broadly assert Plaintiff’s factually devoid response shifts the burden without discussing which elements the purportedly devoid responses cause to fail. It appears Defendants contend Plaintiff’s discovery responses cause the element of breach to fail; however, the Court declines to make any inferences. Thus, the burden remains with Defendants to submit evidence proving no triable issue of material fact exists.

Even assuming arguendo, Defendants had met their burden, Plaintiff submitted evidence creating a triable issue of material fact as to whether he can establish the causes of action.

Plaintiff submitted evidence suggesting Defendants’ actions were taken with improper motives and as a result of a conflict of interest given Defendants stood to personally benefit as a result of the actions, thereby creating a triable issue of fact as to whether the business judgment rule applies. First, with respect to Defendants’ assertion that their actions were taken after Plaintiff had formally announced his retirement, Plaintiff submitted evidence creating a triable issue of fact as to whether he ever formally announced his retirement. (Decl. of Ahn 9.) Plaintiff submitted evidence that Chang requested Plaintiff inform VCNY’s employees he was retiring to prevent disruptions in operation for when Plaintiff did leave, and Chang assured Plaintiff he would provide a fair assessment of Entity Defendants’ value and to now worry of his salary or company position until the buyout was finalized and, relying on these representations, Plaintiff informed VCNY’s employees he was thinking about resigning. ([Response Separate Statement (“R-SSF”) No. 17] Decl. of Ahn 8.) Plaintiff submitted evidence that after he informed VCNY employees he was thinking of retiring, he attempted to have meetings with Chang to request in section and copying of Entity Defendants financial documents to conduct due diligence for the buyout; however, Chang prevented him from doing so. ([R-SSF No. 19] Decl. of Ahn 8, 9.) Plaintiff also submitted evidence that, while there were discussions of a buyout, Plaintiff never reached an agreement with Chang because they were unable to agree on Entity Defendants’ value. ([R-SSF No. 20; Decl. of Ahn 9; Decl. of Beck 2 (3/16/20 Ahn Depo, 210:5-12 [Ahn’s testimony that there was no conclusion because he and Chang kept insisting on different numbers that were far apart]).) As such, the evidence suggests the announcement itself, to the extent it qualified as a retirement announcement, was made at Chang’s inducement and in reliance on Chang’s representations.

Plaintiff submitted evidence that he loaned certain sums to VCA and VCambodia; however, as a result of Defendants taking ownership and control over Entity Defendants, Entity Defendants have refused to pay back Plaintiff’s loans and Defendants are denying Plaintiff even made any loans. (Opposition, pgs. 8-9; Decl. of Ahn 6, 11.) Plaintiff argues that Defendants’ denial of shareholder loans while owning and controlling Entity Defendants resulted in Plaintiff’s loans being wiped out to the benefit of Defendants, creating a conflict of interest as to whether their actions are protected by the business judgment rule. (Opposition, pg. 9.) Plaintiff also argues that Chang’s selection of an employee to conduct the valuation, as opposed to a third-party appraiser, enabled him to take control of Entity Defendants by preventing Plaintiff from doing his valuation diligence, checking the valuation Chang prepared, and selling his shares to Chang or a third party at their actual value. (Opposition, pg. 9; citing R-SSFs Nos. 22, 24, 25, 26; Decl. of Ahn 10.) Plaintiff argues that because he did not receive shareholder distributions while bringing the instant action and because Chang was free to operate the Entity Defendants in any manner we wanted, including increasing his salary at the expense of Plaintiff’s distribution, Defendants personally benefited to Plaintiff’s detriment and a conflict of interest prevents application of the business judgment rule. (Opposition, pg. 9, citing R-SSF No. 33.) Plaintiff also cites to evidence of Susie’s role in filing a Statement of Information which purported to remove Plaintiff as VCA’s CFO and director and made Chang the Secretary, CFO, and sole director without having held a directors’ or shareholders’ meeting and without maintaining minutes of corporate proceedings or informing Plaintiff. (Opposition, pg. 10, citing R-SSF Nos. 32, 33; Decl. of Ahn 11.)

Based on the foregoing, Defendants’ motion for summary judgment is denied. In light of Defendants’ failure to meet their burden on summary judgment, the Court does not reach the issue of whether Plaintiff can establish the remaining causes of action.

Alter Ego Allegations

Defendants argue Plaintiff has no evidence supporting his alter ego allegations asserted against Chang Defendants, and as such, Plaintiff cannot meet the burden required to pierce the corporate veil and impose personal liability on Defendants for any damages caused by the actions of VCA entities and Plaintiff’s “alter ego claim” fails as a matter of law. (Motion, pgs. 23-24.)

“Section 437c, subdivision (f)(1) provides: “A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages [as specified in Civil Code section 3294], or one or more issues of duty… A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Hindin v. Rust (2004) 118 Cal.App.4th 1247, 1255 (Italics in original).)

Defendants do not meet their burden on summary judgment based on Plaintiff’s failure to establish alter ego. Notably, not all causes of action asserted against Defendants are based on alter ego liability, and as such, even if Plaintiff were unable to establish alter ego, it would not bar all of his causes of action against Defendants to warrant summary judgment. To the extent Defendants seek adjudication of Plaintiff’s alter ego “claim” the motion is improper as a claim for alter ego is not properly the subject of a motion for summary adjudication, which only addresses causes of action, affirmative defenses, claims for damages, or issues of duty. In addition, as discussed above, Defendants’ motion is procedurally improper in failing to properly move for summary adjudication of individual causes of action.

Based on the foregoing, Defendants’ motion for summary judgment is denied.

Dated: February , 2022

Hon. Monica Bachner

Judge of the Superior Court



Case Number: ****0875 Hearing Date: January 21, 2022 Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

ANDREW YOUNG AHN,

vs.

VOLUMECOCOMO APPAREL, INC. a California corporation, et al.

Case No.: ****0875

Hearing Date: January 21, 2022

Defendants VolumeCocomo Apparel, Inc., Christopher Chang, and Susie Chang’s motion for sanctions is denied as to requests for non-monetary sanctions. Defendants’ motion for monetary sanctions is granted in the reduced total amount of $5,485, against Plaintiff and his attorney of record, payable within 10 days.

Plaintiff’s request for monetary sanctions is denied.

Defendants VolumeCocomo Apparel, Inc. (“VCA”), for itself and on behalf of its affiliates VolumeCocomo Apparel, Inc. of New York (“VCA NY”), VolumeCocomo Apparel Shanghai Co., Ltd. (“VCA Shanghai”), VolumeCocomo Apparel Cambodia, Inc. (“VCA Cambodia”), and Cocovol Apparel Cambodia Inc. (“CA Cambodia”), together with Christopher Chang (“Chang”) and Susie Chang (“Susie”) (collectively, “Defendants”) move for an order that Plaintiff Andrew Young Ahn (“Plaintiff”) be sanctioned for misuse of discovery. Specifically, Defendants request the Court order: (1) Plaintiff comply with the Court’s July 7, 2021 Order made pursuant to the parties’ Stipulation Regarding Disclosure of Party Tax Returns (the “July 7 Order”) and produce unproduced tax returns within 7 days of the hearing; (2) if production is not made within 7 days of the hearing, that Plaintiff allow and pay for a third-party computer forensic specialist of Defendants’ choosing to search all electronic media that may store or have stored discovery he was ordered to produce under the July 7 Order within 14 days of the hearing; (3) that Plaintiff be stayed from initiating any further discovery or other proceedings pending resolution of his obligations under the Order; and (4) that Plaintiff and his attorneys’ of record pay monetary sanctions in the total amount of $30,340.50, reflecting $14,282 sought by VCA and $15,512.50 sought by the Changs. (Notice of Motion, pg. 2; C.C.P. 2023.010, 2023.030.) In opposition, Plaintiff requests an award of monetary sanctions against Defendants in the amount of $9,785. (Opposition, pg. 12.)

Defendants do not move for heightened sanctions in the form of evidence, issue, or terminating sanctions, but request that any order made on this motion be without prejudice to their seeking or the Court ordering further sanctions. (Motion, pg. 20.)

Background

This action arises from a former business relationship between Plaintiff and Defendants Chang and Susie (collectively, “the Changs”), who together formed multiple business entities including VCA, VCA NY, VCA Shanghai, VCA Cambodia, CA Cambodia, and VCA Korea (collectively, “Entity Defendants”). On October 27, 2017, Plaintiff filed this action against the Entity Defendants and the Changs, as individuals and as trustees of the Sue Huyn Chang Life Estate Trust (“the Trust”).

Defendants submitted evidence that throughout the parties’ meet and confer efforts involving turning over Plaintiff’s tax records, neither Plaintiff nor his counsel suggested Plaintiff did not have or could not access tax records for the years from 2004 onward. (Decl. of Kang 14.)

The July 7 Order provides as follows: (1) “[Plaintiff] shall produce and authorize [his accountants Choi Hong Lee & Kang LLP (“CHLK”)] to produce… his unredacted State and Federal Income Tax Returns, including all forms, schedules, and attachments, for the time period from 2004 to [July 2021] (exclusive of… 2014-2016), such that [documents] are received… on or before July 8, 2021, at 5:00 p.m.….”; (2) [the Changs] shall produce… their State and Federal Income Tax Returns, including all forms, schedules, and attachments, for the time period from 2004 to [July 2021] (exclusive of 2014-2016) such that [documents] are received… on or before July 8, 2021, at 5:00 p.m….” (Court’s 7/7/21 Order.) Defendants filed the instant motion on July 29, 2021. On September 23, 2021, the Court granted VCA’s unopposed motion to compel CHLK to comply with the March 12, 2021 business records subpoena in light of evidence suggesting CHLK had not produced all tax records responsive to the subpoena, and ordered production within 10 days.

Defendants submitted evidence CHLK produced Plaintiff’s tax records only for the years 2008, 2010, and 2012-2020, omitting tax records for the years 2004, 2005, 2006, 2007, 2009, and 2011 (“Omitted Tax Returns”). (Decl. of Kang 15.) Only after the July 8, 2021 deadline for production, and after the Changs had produced their own tax returns pursuant to the July 7 Order, did Plaintiff disclose he did not have the Omitted Tax Returns. (Decl. of Kang 16.)

In opposition, Plaintiff submitted evidence that he has used the CPA services of CHLK “throughout” and believed that CHLK had all of his tax records when VCA issued its Subpoena to CHLK for those records, and upon the parties’ entry into the stipulation, he has produced all documents in his possession, and he authorized CHLK to release all of his records in its possession. (Decl. of Ahn 4-5.) Plaintiff declared that since learning CHLK did not have his complete records, he has been diligently seeking the missing documents and on July 21, 2021, requested tax records and transcripts for the missing years from the IRS, and after receiving no reply, again requested these records from the IRS on August 4, 2021. (Decl. of Ahn 6.) On August 4, 2021, Plaintiff requested his W-2 Forms for the missing years from the Social Security Administration and on August 5, 2021, Plaintiff requested tax returns for the missing years from the State of California Franchise Tax Board. (Decl. of Ahn 6, Exhs. A, B.)

Motion for Sanctions

The Court, “after notice to any affected party… and after opportunity for hearing,” may impose monetary sanctions for misuses of the discovery process for “the reasonable expenses, including attorney’s fees, incurred by anyone as a result of that conduct.” (C.C.P. 2023.030(a).) Misuse of the discovery process includes disobeying a court order to provide discovery. (C.C.P. 2023.010(g).)

For purposes other than contempt, “disobedience” of a Court order does not require a showing of willfulness; rather, failure to obey (i.e., noncompliance with the Court’s order) is all that need be shown. (See Puritan Ins. Co. v. Superior Court (1985) 171 Cal.App.3d 877, 883.)

A. Requests for Non-Monetary Sanctions

As a preliminary matter, Defendants fail to cite to authority supporting their request for discovery sanctions in the form of orders: (1) compelling Plaintiff to comply with the July 7 Order; (2) compelling a third-party forensic examination of “all electronic media that may have stored discovery”; and/or (3) staying Plaintiff’s discovery until compliance with the July 7 Order. Rather, the sanctions available to a party where another party fails to obey a discovery order include issue sanctions, evidence sanctions, terminating sanctions, contempt sanctions, and monetary sanctions (in addition or in lieu of any other sanction). (See Weil & Brown et al., Cal. Prac. Guide: Civ. Pro. Before Trial (The Rutter Group 2021), 8:2175; C.C.P. 2023.030.) Here, Defendants’ request for monetary sanctions is the only request that is supported by the statute.

As to Defendants’ other requested relief, an order compelling Plaintiff to comply with the July 7 Order would be duplicative of the Order itself, which is still in effect. In addition, as discussed above, Plaintiff submitted evidence he has complied with the July 7 Order to the extent he is able, as he has produced all responsive documents in his possession and instructed CHLK to do the same.

Defendants’ request the Court order Plaintiff to pay for a third-party forensic examination of “all electronic media” of Plaintiff and CHLK for the Omitted Tax Returns as well as “any other related ESI such as metadata that may uncover any potential spoilation of the tax records” is unsupported. (Motion, pg. 17.) Defendants submit no evidence supporting their assertion that Plaintiff and/or CHLK has engaged in the destruction of evidence with respect to the Omitted Tax Returns, and only argue the production is “suspect” because CHLK produced records for 2008, 2010 and 2012 without producing records for the neighboring years of 2007, 2009, and 2011. (Motion, pgs. 18-19.) Defendants cite cases in which courts ordered forensic examinations of electronic files; however, these cases did not involve an order for a forensic inspection as a sanction for failure to comply with a Court order. (See Ellis v. Toshiba America Information Systems, Inc. (2013) 218 Cal.App.4th 853, 878 [“The court did not order the [forensic] inspection as a sanction under [C.C.P.] section 2023.030.”]; Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967 [the order allowing Plaintiff’s counsel to “data-mine” emails was made as a discovery order by the trial court based on a finding by the discovery referee that many documents that had been requested and must necessarily have existed had not been produced leaving good reason to believe defendant was either withholding documents or had failed to diligently search for them]; Dodge, Warren & Peters Ins. Services, Inc. v. Riley (2003) 105 Cal.App.4th 1414, 1418 [did not involve a sanctions motion, but a motion for preliminary injunction to prevent potential destruction of evidence] While Defendants cite further non-binding authority for the position that a Court can order a forensic examination to determine if spoilation has occurred, Defendants fail to submit competent evidence suggesting either Plaintiff or CHLK engaged in spoilation of evidence with respect to the Omitted Tax Returns. (Motion, pg. 19.)

Defendants’ request that Plaintiff be stayed from initiating any further proceedings or discovery until either the July 7 Order is obeyed, or the computer forensic examination is complete is likewise unsupported. (Motion, pg. 19.) Defendants cite to C.C.P. 2023.030(d)(2) as providing authority for this request. However, C.C.P. 2023.030(d)(2) applies to orders a Court may impose as a terminating sanction; here, Defendants have not moved for terminating sanctions, and instead move only for monetary sanctions. (See C.C.P. 2023.030(d)(2) [“The court may impose a terminating sanction by one of the following orders: (1) An order striking out the pleadings or parts of the pleadings of any party engaging in the misuse of the discovery process[;] (2) An order staying further proceedings by that party until an order for discovery is obeyed[;] (3) An order dismissing the action, or any part of the action, of that party[;] [or] (4) An order rendering a judgment by default against that party.”].) [The Court notes Defendants’ motion improperly refers to C.C.P. 2030.030, which involves procedures for propounding interrogatories; the Court presumes Defendants intended to cite to C.C.P. 2023.030.] In addition, Defendants’ request that Plaintiff be stayed from conducting discovery likewise lacks any statutory support; C.C.P. 2023.030(d)(2), which is not applicable, only addresses staying a party from further proceedings.

Accordingly, Defendants’ requests for non-monetary sanctions for Plaintiff’s failure to comply with the July 7 Order are denied. The Court’s July 7 Order compelling Plaintiff to produce tax returns remains in effect.

B. Monetary Sanctions

Defendants are entitled to an award of monetary sanctions in connection with Plaintiff’s failure to comply with the July 7 Order. Defendants submitted evidence Plaintiff stipulated that he would produce his tax returns and authorize CHLK to produce the same, without conditioning such production to those tax returns that were in his or CHLK’s possession or control. As such, in failing to produce the Omitted Tax Returns, even based on his mistaken belief that CHLK was in possession of the Omitted Tax Returns, Plaintiff has disobeyed the July 7 Order.

Defendants are entitled to reasonable attorneys’ fees incurred in attempting to obtain compliance with the July 7 Order and in preparing the motion. The Changs request $15,512.50 based on meet and confer efforts in the amount of $9,052.50 (21.3 hours preparing meet and confer correspondence and preparing for or participating in telephonic conferences on the subject of the Stipulation and Order at the rate of $425 per hour) and $6,460 for the instant motion (14.2 hours at $425 per hour). (Decl. of Abner 5-6.) VCA seeks $14,828 based on $1,484 for meet and confer efforts for the Stipulation and Order in the amount of (5.3 hours at $280 per hour by David Kang), $13,344 for the instant motion ($12,000 for 30 hours at $400 per hour by Daniel Hargis plus $1,344 for 4.8 hours at $280 per hour by David Kang). (Decl. of Ho 4-6.) Defendants are not entitled to attorneys’ fees incurred in connection with entering the Stipulation, since Plaintiff’s abuse of the discovery process occurred after the parties entered into the Stipulation when Plaintiff (and CHLK) failed to produce tax records for all the years indicated. The Court also finds a reduction of the fees requested in connection with the instant motion is warranted in light of Plaintiff’s efforts to obtain the Omitted Tax Returns both prior to and after Defendants filed the instant motion.

Accordingly, Defendants’ request for monetary sanctions is granted in the reduced total amount $5,485 of reflecting the sum of $2,125 (5 hours at $425 per hour, to the Changs) and $3,360 (2 hours at $280 per hour plus 7 hours at $400 per hour), against Plaintiff and his attorney of record, payable within 10 days.

Plaintiff’s request for monetary sanctions is denied.

Dated: January , 2022

Hon. Monica Bachner

Judge of the Superior Court



b"

Case Number: ****0875 Hearing Date: September 23, 2021 Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

ANDREW YOUNG AHN,

vs.

VOLUMECOCOMO APPAREL, INC. a California corporation, et al.

Case No.: ****0875

Hearing Date: September 23, 2021

Defendant VolumeCocomo Apparel, Inc.’s unopposed motion to compel third-party Choi Hong Lee & Kang LLP to comply with the March 12, 2021 business records subpoena is granted. Production is to be made within 10 days of service of this order.

Defendant VolumeCocomo Apparel, Inc. (“VCA”) moves to compel third-party Choi Hong Lee & Kang LLP (“CHLK”), the accountants for Plaintiff Andrew Young Ahn (“Plaintiff”), to comply with the business records subpoena (“Subpoena”) VCA served on March 12, 2021.

This action arises from a former business relationship between Plaintiff and Defendants Christopher Chang (“Chang”) and Susie Chang (“Susie”) (collectively, “Chang Defendants”), who together formed multiple business entities including VCA, VolumeCocomo Apparel, Inc. of New York (“VCA NY”), VolumeCocomo Apparel Shanghai Co. Ltd. (“VCA Shanghai”), VolumeCocomo Apparel Cambodia, Inc. (“VCA Cambodia”), Cocovol Apparel Cambodia, Inc. (“CA Cambodia”), VolumeCocomo Apparel Korea, Inc. (“VCA Korea”) (collectively, “Entity Defendants”). On October 27, 2017, Plaintiff filed this action against the Entity Defendants and the Chang Defendants, as individuals and as trustees of the Sue Huyn Chang Life Estate Trust (“the Trust”).

VCA provided a consumer notice to Plaintiff on March 5, 2021 of its Subpoena, which sought Plaintiff’s tax returns, including the accompanying schedules, forms, and attachments, with a production deadline of March 29, 2021. (Decl. of Ho ¶3, Exh. 1.) Plaintiff served an objection to the Subpoena on March 9, 2021, and CHLK did not produce any materials, move to quash the Subpoena, or object to the Subpoena by the deadline. VCA filed the instant motion on May 28, 2021. The Court notes on May 27, 2021, Plaintiff filed a motion to quash subpoena directed at the CHLK Subpoena, as to which VCA filed an opposition on September 10, 2021; however, on September 13, 2021, Plaintiff cancelled the hearing on his motion via the Court Reservation System. On July 7, 2021, the Court entered an order (“July 7 Order”) pursuant to the parties’ Stipulation Regarding Disclosure of Party Tax Returns that required Plaintiff to produce, by July 8, 2021, his federal and state tax records since 2004, exclusive of 2014-2016, for which the parties had already exchanged. Specifically, the July 7 Order provided that Plaintiff shall produce and authorize CHLK to produce his State and Federal Income Tax Returns, including all forms and schedules for the stated time period. In support of its opposition to the cancelled Motion to Quash, VCA submitted evidence that, as of September 10, 2021, Plaintiff had not complied with the July 7 Order since while Plaintiff, through CHLK produced tax records for 2008, 2010, and 2013-2020 on July 8, 2021, returns for 2004-2007, 2009, and 2011 were not produced. (Decl. of Kang ¶¶12-13.) VCA submitted evidence Plaintiff later produced an illegible copy of his IRS Tax Transcript for 2011. (Decl. of Kang ¶16.) The Court notes in VCA’s opposition to the motion to quash, it asserts that its motion to compel is still ripe notwithstanding the July 7 Order and Stipulation because Plaintiff and CHLK have not produced all of Plaintiff’s tax records requested in the Subpoena or required to be produced under the July 7 Order. (Opposition, pg. 10.) As of the date of this hearing, Plaintiff has not filed an opposition to the instant motion.

“A deposition subpoena for business records directs a nonparty's ‘custodian of records’ to deliver a copy of the requested documents to a ‘deposition officer’ or to make the original documents available to the subpoenaing party for inspection and copying. ([C.C.P. ;; 2020.410(c), 2020.430(a)-(e)].) The Act refers to the custodian of records as the ‘deponent.’ ([C.C.P. ;;2025.280(b), 2020.230(b)]). [¶] If a deponent fails to produce a requested document under his or her control, the subpoenaing party may bring a motion to compel production ‘no later than 60 days after the completion of the record of the deposition.’ ([C.C.P. ;2025.480(b)].)” (Unzipped Apparel, LLC v. Bader (2007) 156 Cal.App.4th 123, 127.) The objections or other responses to a business records subpoena are the “deposition record” for purposes of measuring the 60-day period for a motion to compel. (Id. at 132-133.)

C.C.P. ;2025.480(a) provides that, “[i]f a deponent fails to answer any question or to produce any document, electronically stored information, or tangible thing under the deponent's control that is specified in the deposition notice or a deposition subpoena, the party seeking discovery may move the court for an order compelling that answer or production.”

VCA is entitled to an order compelling CHLK compliance with the Subpoena. As discussed above, VCA submitted evidence CHLK and Plaintiff’s production of tax records in response to the Subpoena do not include all documents in CHLK’s possession responsive to the business records subpoena, specifically, Plaintiff’s tax records for 2004-2007 and 2009 as well as a legible version of records from 2011. VCA also submitted evidence it attempted to meet and confer with CHLK to no avail. (Decl. of Ho ¶7, Exhs. 4, 5.) To the extent CHLK has not produced all responsive documents to the business records subpoena, specifically Plaintiff’s tax records for 2004-2007, 2009, and 2011, it is ordered to do so.

Based on the foregoing, VCA’s unopposed motion to compel compliance is granted. Production is to be made within 10 days of service of this order.

Dated: September _____, 2021

Hon. Monica Bachner

Judge of the Superior Court

"


Case Number: ****0875    Hearing Date: July 06, 2020    Dept: 71

Defendant Christopher Chang’s motion to compel further responses to Special Interrogatories (Set One) and (Set Two) is denied as moot.

Chang’s motion to compel further responses to Requests for Production (Set Two) is denied as moot. Defendant Chang’s requests for sanctions are denied.

Defendant Volumecocomo Apparel, Inc.’s motion to compel further responses to Requests for Production (Set Two) is granted.

Volumecocomo’s motion to compel further responses to Special Interrogatories (Set Two) is granted only as to the requested verifications and is otherwise denied as moot.

Volumecocomo’s motion to compel compliance with Request for Production (Set Two) is granted. Volumecocomo’s requests for sanctions against Plaintiff are granted in the reduced total amount of $5,850.

Five discovery motions are presently before the Court. Defendant Christopher Chang brings two motions to compel Plaintiff Andrew Young Ahn’s further responses to Special Interrogatories and Requests for Production and Defendant Volumecocomo Apparel, Inc. brings two motions to compel Plaintiff’s further responses to Requests for Production and Special Interrogatories and a motion to compel Plaintiff’s compliance with Requests for Production.

  1. Motions Brought by Defendant Christopher Chang

    Motion to Compel Further Responses to Special Interrogatories

    Defendant Christopher Chang (“Chang”) moves for an order compelling Plaintiff Andrew Young Ahn (“Plaintiff”) to provide further responses to Special Interrogatories (Set One) and (Set Two) (“SI”). Specifically, Chang moves to compel further responses to Interrogatories (Set One) Nos. 79, 80, 81, 82, 84, 85, 88, and 91 and (Set Two) Nos. 116, 120, 126, 127, 128, 132, 133, 134, 135, 136, 137, and 138. (See Separate Statement.) Chang also requests an award of monetary sanctions against Plaintiff in the amount of $6,300. (Notice of Motion, pg. 1.)

    As a preliminary matter, the Declaration of Jay J. Chung (“Chung”) in support of the motion does not have numerated paragraphs; however, for the purposes of referring to the declaration in this motion, the Court will assume standard numeration. In addition, in his separate statement in support of his reply, Chang notes that Plaintiff’s supplemental responses to Set Two Nos. 134, 135, 136, 137, and 138 are sufficient and as such, these requests are no longer at issue. (Reply, pg. 2; Reply-Separate Statement, pgs. 42-45.)

    By way of background, this action arises from a former business relationship between Plaintiff, Chang, and Defendant Susie Chang (“Susie”) (collectively, “Chang Defendants”), who together formed multiple business entities including Defendants VolumeCocomo Apparel, Inc. (“VA”), VolumeCocomo Apparel, Inc. of New York (“VA NY”), VolumeCocomo Apparel Shanghai Co. Ltd. (“VA Shanghai”), VolumeCocomo Apparel Cambodia, Inc. (“VA Cambodia”), Cocovol Apparel Cambodia, Inc. (“CA Cambodia”), VolumeCocomo Apparel Korea, Inc. (“VA Korea”) (collectively, “Entity Defendants”). On October 27, 2017, Plaintiff filed this action against the Entity Defendants and the Chang Defendants, as individuals and as trustees of the Sue Huyn Chang Life Estate Trust (“the Trust”). After substituting new counsel, Plaintiff filed the operative Third Amended Complaint on September 26, 2018.

    Chang served Special Interrogatories (Set One) on Plaintiff on March 19, 2019, and Plaintiff submitted responses on May 24, 2019. (Decl. of Chung ¶¶3, 4; Exhs. 1, 3.) On September 10, 2019, Chang served Special Interrogatories (Set Two) on Plaintiff, and on October 18, 2019, Plaintiff submitted responses. (Decl. of Chung ¶¶3, 4; Exhs. 2, 4.) On November 26, 2019, Chang’s counsel sent Plaintiff a meet and confer letter regarding Plaintiff’s defective responses to both sets of interrogatories, and on December 20, 2019, Chang’s counsel received a letter from Plaintiff agreeing to provide further responses to Nos. 79-85, 87, 91, and 93 in Set One and Nos. 116, 120, 123-125, 132-137 in Set Two. (Decl. of Chung ¶¶5, 6; Exhs. 5, 6.) On February 14, 2020, Plaintiff served supplemental responses to both sets of special interrogatories; however, Chang’s counsel asserts that the responses did not include supplemental responses to Nos 132-137, as agreed to by Plaintiff, and that the supplemental responses remain incomplete, evasive, nonresponsive, or otherwise improper. (Decl. of Chung ¶¶7-8; Exhs. 7, 8.) On May 13, 2020, Plaintiff served further responses to Special Interrogatories Sets One and Two. (Decl. of Beck ¶13, Exh. 4.)

    In his April 4, 2020 opposition, Plaintiff argues that he was unable to provide supplemental responses to the at-issue requests until the Chang Defendants and Entity Defendants produced financial documents on March 16, 2020 and March 17, 2020, including general ledgers of the Entity Defendants. (First Opposition, pg. 6.) Plaintiff asserts that he could not provide complete responses to the at-issue discovery requests without first reviewing the general ledgers of the Entity Defendants, and that if Plaintiff had been in possession of these documents, he would have been able to provide complete responses to Defendants’ discovery requests previously. (First Opposition, pgs. 6-8.) Plaintiff filed a second opposition on June 19, 2020, in which he raises the same arguments that he asserts in his first opposition, and further argues that on May 13, 2020, he provided further responses to the at-issue Special Interrogatories, making Chang’s motion moot. (Second Opposition, pg. 9; Decl. of Beck ¶12, Exh. 4.) In reply, Chang asserts that the further responses provided by Plaintiff on May 13, 2020 did not correct the concerns at issue in the instant motion and the motion is not moot. (Reply, pg. 2; Reply Separate Statement.)

    Chang’s motion to compel further responses is denied as moot. Plaintiff served untimely supplemental responses to the Special Interrogatories on May 13, 2020, before the hearing on the instant motion. While Chang argues these supplemental responses are insufficient and warrant a Court order compelling a further response, the sufficiency of the supplemental responses is not at issue in Chang’s motion, and Plaintiff has not had the opportunity to oppose Chang’s arguments regarding their sufficiency. To the extent Chang finds the responses to be insufficient, he is entitled to file a motion to compel further responses.

    Motion to Compel Further Responses to Requests for Production

    Chang moves for an order compelling Plaintiff to provide further responses to Requests for Production of Documents (Set Two). Chang also requests an award of monetary sanctions against Plaintiff in the amount of $4,950. (Notice of Motion, pgs. 1-2.) Specifically, Chang moves for an order compelling further response to Requests for Production Nos. 110, 121-125, 128, 135-140, 147, 148-163. (See Separate Statement.)

    As a preliminary matter, Chang’s separate statement in support of his reply indicates that, in light of the supplemental responses Plaintiff served on May 13, 2020, only Nos. 147-153 remain in dispute.

    Chang’s motion to compel further responses to the Requests for Production is denied as moot. Plaintiff served untimely supplemental responses to the Requests on May 13, 2020, before the hearing on the instant motion. While Chang argues these supplemental responses are deficient, the sufficiency of the supplemental responses is not at issue in Chang’s motion, and Plaintiff has not had the opportunity to oppose Chang’s arguments regarding their sufficiency. To the extent Chang finds the responses to be insufficient, he is entitled to file a motion to compel further responses.

    Requests for Sanctions

    Chang requests monetary sanctions in connection with his motions in the total amount of $11,250, reflecting 14 hours (7 hours in preparing the Special Interrogatories (“SI”) motion and 7 hours anticipated to prepare the reply and appear at the hearing) and 11 hours (6 hours preparing the Requests for Production of Documents (“RFP”) motion and 5 hours anticipated to prepare the reply and appear at the hearing) at the rate of $450 per hour. (SI-Decl. of Chang ¶9; RFP-Decl. of Chang ¶7.)

    The Court notes that, notwithstanding its rulings on the motions, Chang’s requests for sanctions remain at issue. (See Sinaiko Healthcare Consulting, Inc. v. Pacific Healthcare Consultants (2007) 148 Cal.App.4th 390, 407; CRC 3.1348(a) (“The court may award sanctions under the Discovery Act in favor of a party who files a motion to compel discovery, even though … the requested discovery was provided to the moving party after the motion was filed.”).)

    In his oppositions, Plaintiff submits no argument as to the sanctions requested by Chang in connection with either the SI or the RFP motion. In each opposition, Plaintiff argues that Chang’s motions were premature because the parties did not participate in an Informal Discovery Conference (“IDC”), as the Court suggested, which would have resulted in the March 16 and March 17 document production by Entity Defendants to occur sooner. (Second SI-Opposition, pg. 8; RFP-Opposition, pg. 6, fn. 1.) In his replies, Chang argues that Plaintiff has no excuse or justification for failing to provide further responses in compliance with the discovery statutes. (SI-Reply, pg. 6; RFP-Reply, pg. 3.) However, in reply, Chang does not address Plaintiff’s argument that he was unable to submit complete discovery responses until receipt of discovery from Entity Defendants.

    Given Plaintiff’s assertions that he was unable to submit complete discovery responses until receiving his own discovery from Entity Defendants, the Court finds that Plaintiff acted with substantial justification such that sanctions are not warranted. (Second SI-Opposition, pg. 6; C.C.P. ;;2031.310(h), 2030.300(d).)

    Based on the foregoing, Chang’s requests for monetary sanctions are denied.

    Conclusion

    Based on the foregoing, Chang’s motions to compel further responses to Special Interrogatories (Set One) and (Set Two) and Requests for Production are denied as moot. Chang’s requests for monetary sanctions are denied.

  2. Motions Brought by Volumecocomo Apparel, Inc.

    Motion to Compel Compliance with Request for Production (Set Two)

    Defendant Volumecocomo Apparel, Inc. (“VA”) moves for an order compelling Plaintiff’s compliance with Requests for Production (Set Two) Nos. 52-61. VA also requests monetary sanctions in the amount of $4,500. (Notice of Motion, pgs. 1-2; C.C.P. ;2031.320.)

    C.C.P. ;2031.320(a) provides that, “[i]f a party filing a response to a [request for production] thereafter fails to [produce the documents] in accordance with that party’s statement of compliance, the demanding party may move for an order compelling compliance.”

    VA submitted evidence that it propounded Requests for Production (Set Two) Nos. 5-70 on Plaintiff on August 30, 3019, that Plaintiff thereafter served written responses and production of documents, and that Plaintiff’s written responses to Nos. 52 to 61 indicated that Plaintiff would comply and produce all documents within his possession, custody, or control. VA Submitted evidence that, notwithstanding Plaintiff’s agreement to comply, responsive documents to Nos. 52 to 61 were not produced by Plaintiff as of the date of filing the instant motion. (Decl. of Wang ¶¶2-6.) Requests Nos. 52-55 seek all communications between Plaintiff and the IRS that relate to certain Entity Defendants, Nos 56-60 seek all communications between Plaintiff and the FTB that relate to certain Entity Defendants and No. 61 seeks all documents relating to the income from VCA that Plaintiff reported to the IRS. (Decl. of Wang, Exh. 1.) In opposition, Plaintiff asserts that all documents responsive to Nos. 52 to 61 were produced by Plaintiff on October 18, 2019, and that within the produced documents were tax return documents which constitute the only communications between Plaintiff and the IRS and the FTB in Plaintiff’s possession. (Opposition, pg. 5, Decl. of Beck ¶12.) [The Court notes that the opposition itself incorrectly refers to a production date of October 18, 2020. (Opposition, pg. 6.)] In reply, VA argues that contrary to Plaintiff’s assertions, he did not produce documents responsive to Nos. 52 to 61 via his production of VA’s tax return documents in October 2019, since the requests seek Plaintiff’s communications and documents relating to Plaintiff’s income. (Reply, pgs. 2-4.)

    VA is entitled to an order compelling Plaintiff’s production of documents responsive to Requests Nos. 52 to 61 in accordance with Plaintiff’s statement of compliance, to the extent such documents exist in Plaintiff’s possession, custody, or control.

    Based on the foregoing, VA’s motion to compel compliance is granted.

    Motion to Compel Further Responses to Requests for Production (Set Two)

    VA moves for an order compelling Plaintiff to provide further responses to Requests for Production (Set Two) Nos. 5-10, 12-17, 26-30, 40-45, and 52-61. (Notice of Motion, pg. 1; Motion, pg. 4; Separate Statement.) In addition, VA requests monetary sanctions against Plaintiff in the amount of $4,050. (Notice of Motion, pg. 2.)

    As a preliminary matter, the numeration of the at-issue requests in VA’s separate statement is incorrect. In numbering the requests, the Court relies on the number referenced in “Reason why further response to request for production… should be compelled” in the separate statement, the numeration set forth in the motion, and the numeration set forth in the reply.

    VA is entitled to an order compelling Plaintiff to produce further code-compliant responses to the at-issue requests for production. VA submitted evidence that Plaintiff’s responses to Nos. 5-10, 13, 16-17, 26-30, 40-45, and 52-61 include statements of compliance that are not in accord with C.C.P. ;2031.210(a) since they condition Plaintiff’s compliance on VA’s payment of production costs. (Motion, pgs. 5-6; Decl. of Wang, Exh. 2 [“Responding party will comply and produce all documents within his possession, custody or control that he believes to be in compliance to this particular request upon this propounding party's agreement to bear the cost.”].)

    VA also submitted evidence that Plaintiff’s responses to Nos. 14-15 and 46-51 are not code compliant. Specifically, in response to these requests, Plaintiff responded “None”, which does not comply with the requirements for stating an inability to comply under C.C.P. ;2031.230. (Motion, pgs. 6-7; Decl. of Wang, Exh. 2; See C.C.P. ;2031.230 [“A representation of inability to comply with the particular demand for inspection, copying, testing, or sampling shall affirm that a diligent search and a reasonable inquiry has been made in an effort to comply with that demand. This statement shall also specify whether the inability to comply is because the particular item or category has never existed, has been destroyed, has been lost, misplaced, or stolen, or has never been, or is no longer, in the possession, custody, or control of the responding party. The statement shall set forth the name and address of any natural person or organization known or believed by that party to have possession, custody, or control of that item or category of item.”].)

    Plaintiff’s argument in opposition that he has provided all responsive documents in his possession on October 18, 2019, rendering the issues raised in the motion moot is without merit and fails to address the issues raised in the motion. (Opposition, pg. 7.) As discussed above, Plaintiff’s responses are not code-compliant, and VA accordingly moves to compel Plaintiff to provide further responses that are code compliant. Plaintiff’s October 18, 2019 production does not moot the issues raised in the motion. In addition, as noted in reply, no further responses have been served to VA’s requests for production. (Reply, pg. 3.) VA is entitled to code-compliant responses to the requests for production.

    Based on the foregoing, VA’s motion to compel further responses to Requests for Production (Set Two) is granted.

    Motion to Compel Further Responses to Special Interrogatories (Set Two)

    VA moves for an order compelling Plaintiff to provide further responses to Special Interrogatories (Set Two) Nos. 176, 186-198, 207-212, and for Plaintiff to provide verifications to his February 14, 2020 Supplemental Responses to Nos. 183-185, 201-205. (Notice of Motion, pg. 1; Motion, pg. 4.) VA also requests monetary sanctions against Plaintiff in the amount of $5,850. (Notice of Motion, pg. 2; C.C.P. ;2023.010.)

    As a preliminary matter, the numeration of VA’s separate statement is incorrect. In numbering the requests, the Court relies on the numbers referenced in the motion and reply, which appear to correspond to the numbers set forth in “Reason why further response… should be compelled.”

    VA’s motion to compel further responses to Special Interrogatories (Set Two) Nos. 176, 186-198, 207-212 is denied as moot. Plaintiff served untimely verified supplemental responses to Nos. 176, 186-198, 207-212 on May 13, 2020, before the hearing on the instant motion. (Decl. of Beck ¶12, Exh. 4.)

    VA is entitled to an order compelling Plaintiff to provide properly verified supplemental responses to Nos. 183-185, 201-205. (See C.C.P. ;2030.250(a).) (See also Appleton v. Superior Court (1988) 206 Cal.App.3d 632, 636 (“Unsworn responses are tantamount to no responses at all.”).) VA submitted evidence that on February 14, 2020, VA received Plaintiff’s unverified supplemental responses to certain special interrogatories and that VA’s counsel contacted Plaintiff’s counsel regarding the unverified status of the supplemental responses but had not received verifications as of the filing of the instant motion. (Decl. of Wang ¶¶7-8, Exhs. 4-5.) Plaintiff does not address the lack of verifications in his opposition. In reply, VA asserts that it has not yet received verifications for these supplemental responses. (Reply, pg. 3.)

    Based on the foregoing, VA’s motion to compel further responses to Special Interrogatory (Set Two) Nos. 176, 186-198, 207-212 is denied as moot. VA’s motion to compel further responses is granted as to the verifications for Plaintiff’s supplemental responses to Nos. 183-185, 201-205.

    Requests for Sanctions

    VA requests monetary sanctions against Plaintiff in connection with its motions in the total amount of $14,400, reflecting 32 total hours at the rate of $450 per hour based on 13 hours (8 hours in preparing the Special Interrogatories (“SI”) motion and 5 hours anticipated to prepare the reply and appear at the hearing), plus 9 hours (6 hours preparing the Requests for Production of Documents (“RFP”) motion and 3 hours anticipated to prepare the reply and appear at the hearing), plus 10 hours (7 hours preparing the Compel Compliance Motion (“CC”) and 3 hours anticipated to prepare the reply and appear at the hearing) at the rate of $450 per hour. (SI-Decl. of Wang ¶9; RFP-Decl. of Wang ¶6; CC-Decl. of Wang ¶7.) The Court notes VA’s requests for monetary sanctions do not include filing fees.

    In light of the Court’s ruling granting VA’s motion to compel compliance with Requests for Production (Set Two) and granting VA’s motion to compel further responses to Requests for Production (Set Two), VA is entitled to an award of monetary sanctions against Plaintiff reflecting the reasonable attorneys’ fees incurred in bringing these motions. In opposition, Plaintiff does not address VA’s requests for sanctions.

    The Court that VA’s request for monetary sanctions in connection with its motion to compel further responses to Special Interrogatories remains at issue notwithstanding the Court’s denial of the motion as moot given Plaintiff’s supplemental responses in advance of the hearing. (See Sinaiko Healthcare Consulting, Inc. v. Pacific Healthcare Consultants (2007) 148 Cal.App.4th 390, 407; CRC 3.1348(a) (“The court may award sanctions under the Discovery Act in favor of a party who files a motion to compel discovery, even though … the requested discovery was provided to the moving party after the motion was filed.”).) In opposition, Plaintiff does not address VA’s request for monetary sanctions, but argues that he could not provide complete responses to the subject interrogatories because he did not have the bank account documents in VA’s possession, and that only once VA made supplemental document production in March 2020 was Plaintiff able to provide supplemental responses. (Opposition, pgs. 6-9.) However, Plaintiff’s argument is without merit given that the special interrogatories seek Plaintiff’s bank account information into which he transferred a certain fund. (Reply, pgs. 2-3.) Accordingly, the Court finds Plaintiff did not demonstrate his failure to provide supplemental responses to the at-issue special interrogatories was substantially justified to bar sanctions. In addition, the Court notes the motion to compel further was granted as to the verifications for the February 14, 2020 supplemental production. As such, VA is entitled to an award of monetary sanctions.

    Utilizing a lodestar approach, and in view of the totality of the circumstances, the Court finds that the total and reasonable amount of attorney’s fees and costs incurred for the work performed in connection with the pending motions is $5,850, reflecting 13 hours incurred at $450 per hour (3 hours for drafting each of the motions, 1 hour for drafting each of the replies, and 1 hour for attending the hearing on the motions).

    Based on the foregoing, VA’s requests for monetary sanctions against Plaintiff is granted in the reduced total amount of $5,850.



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