DANIEL MEYEROV VS MARK FRIEDMAN ET AL

Tentative Rulings

Case Number: BC651099    Hearing Date: December 27, 2019    Dept: 48

(1) MOTION TO PERMIT FILING OF PORTIONS OF NEURAL ACCOUNTANT REPORT UNDER SEAL;

(2) MOTION COMPEL COMPLIANCE WITH DEPOSITION SUBPOENA; REQUEST FOR SANCTIONS;

(3) & (4) DEMURRERS TO FIRST AMENDED DERIVATIVE COMPLAINT (x2)

MOVING PARTY: (1) Defendants Mark Friedman and Trident Group, Inc.;

(2) Plaintiff Daniel Meyerov;

(3) Defendant OnlyBusiness.com, LLC;

(4) Defendants Mark Friedman, Trident Group, David Friedman and Werner Clark

RESPONDING PARTY(S): (1) No opposition filed;

(2) No opposition filed;

(3) Plaintiff Daniel Meyerov;

(4) Plaintiff Daniel Meyerov

PROOF OF SERVICE:

• Correct Address: (1) Yes; (2) No proof of service; (3) Yes; (4) Yes.
• 16/21 (CCP § 1005(b)): (1) Served by electronic service on June 25, 2019; no agreement to accept electronic service is on file; continued to this date per August 21, 2019, September 26, 2019 and December 5, 2019 minute order; (2) No proof of service; (3) Served by electronic service on November 11, 2019; no agreement to accept electronic service is on file; (4) Served by electronic service on November 12, 2019; no agreement to accept electronic service is on file.

• PLACE entire neutral accountant report in the public record;

• CONTINUE hearing on motion to compel compliance;

• CONTINUE hearing on both demurrers.

  ANALYSIS

  Motion to Seal

Defendants Mark Friedman and Trident Group, Inc. move for an order permitting filing of portions of neutral accountant report under seal. In particular, the Motion seeks an order (1) sealing/redacting the Report at pages 7-12, 19-22, 25-29, 32-33, 39-88, and (2) sealing/redacting Exhibits F-M, P-BB, and DD-KK (the “Sealing Order”).

By way of the December 5, 2019 minute order, the Court granted the motion to seal in part and otherwise denied the motion. The court ordered moving party to submit a supplemental brief and proposed order by December 20, 2019 specifically identifying the portions of the report containing tax return information to be sealed. The Court has not yet received these documents. Accordingly, the Court is inclined to place the entire neutral accountant report in the public record, unless moving party can demonstrate that compliance with the Court’s December 5, 2019 order is imminent.

Motions to Compel Compliance with Subpoena

Plaintiff Daniel Meyerov moves to compel compliance with the subpoena issued to non-party Vu Pham, and requests sanctions.

Plaintiff did not submit a proof of service reflecting service of this motion upon Vu Pham, against whom sanctions are being sought. Accordingly, the hearing on the motion to compel compliance is CONTINUED to January 22, 2020. Proof of service re: notice of this motion and continuance is due January 13, 2020.

Defendant OnlyBusiness.com, LLC’s Demurrer

Defendant OnlyBusiness.com, LLC demurs to the First Amended Derivative Complaint.

However, no meet and confer declaration was submitted, as required by CCP § 430.41. Accordingly, the hearing on the demurrer is CONTINUED to January 22, 2020. Meet and confer declaration is due January 13, 2020.

Defendants Mark Friedman, Trident Group, David Friedman and Werner Clark’s Demurrer

Defendants Mark Friedman, Trident Group, David Friedman and Werner Clark demur to the First Amended Derivative Complaint.

The Court’s electronic records do not show that a meet and confer declaration, or supporting memorandum of points and authorities were filed. Accordingly, the hearing on the demurrer is CONTINUED to January 22, 2020. Conformed copies of the meet and confer declaration and supporting memorandum of points and authorities are due January 13, 2020.

Case Number: BC651099    Hearing Date: December 17, 2019    Dept: 48

MOTION TO COMPEL RESPONSES TO REQUESTS FOR PRODUCTION OF DOCUMENTS; REQUEST FOR SANCTIONS

MOVING PARTY: Plaintiff Daniel Meyerov

RESPONDING PARTY(S): No opposition filed;

PROOF OF SERVICE:

• Correct Address: No proof of service.
• 16/21 (CCP § 1005(b)): No proof of service.

• CONTINUE hearing on motion to compel responses to requests for production of documents for proof of service.

  ANALYSIS

  Motion to Compel Responses to Requests for Production of Documents

  Moving party did not submit a proof of service reflecting that notice of this motion was properly served upon Defendant.

  Accordingly, the hearing on the motion to compel responses to requests for production of documents is CONTINUED to January 16, 2020. Proof of service re: moving papers and notice of continuance to be filed by January 9, 2020.

Case Number: BC651099    Hearing Date: December 05, 2019    Dept: 48

(1) MOTION TO PERMIT FILING OF PORTIONS OF NEURAL ACCOUNTANT REPORT UNDER SEAL;

(2) & (3) MOTION FOR PUNITIVE DAMAGES DISCOVERY (x2)

(4) MOTION FOR TERMINATING, EVIDENTIARY AND MONETARY SANCTIONS

MOVING PARTY: (1) Defendants Mark Friedman and Trident Group, Inc.;

(2) Plaintiff Daniel Meyerov;

(3) Plaintiff Daniel Meyerov;

(4) Plaintiff Daniel Meyerov

RESPONDING PARTY(S): (1) No opposition filed;

(2) Defendant Mark Friedman;

(3) No opposition filed.

(4) Defendants Mark Friedman, David Friedman, Werner Clark and Trident Group, Inc.

PROOF OF SERVICE:

• Correct Address: (1) Yes; (2) Yes; (3) Yes; (4) Yes.
• 16/21 (CCP § 1005(b)): (1) Served by electronic service on June 25, 2019; no agreement to accept electronic service is on file; continued to this date per August 21, 2019 minute order and September 26, 2019 minute order; (2) Served by electronic service on June 25, 2019; no agreement to accept electronic service is on file; advanced and continued to this date per stip. & order; (3) Served by electronic service on June 25, 2019; no agreement to accept electronic service is on file; advanced and continued to this date per stip. & order (4) OK. Served by mail on July 31, 2019.

• PLACE entire neutral accountant report in the public record;

• DENY both motions to conduct punitive damages discovery as against Defendants Mark Friedman, David Friedman and Trident Group, Inc.;

• DENY Plaintiff’s motion for terminating, evidentiary and $47,000 in monetary sanctions and Defendant’s request for $33,600 in monetary sanctions.

  ANALYSIS

  Motion To Seal

Defendants Mark Friedman and Trident Group, Inc. move for an order permitting filing of portions of neutral accountant report under seal. In particular, the Motion seeks an order (1) sealing/redacting the Report at pages 7-12, 19-22, 25-29, 32-33, 39-88, and (2) sealing/redacting Exhibits F-M, P-BB, and DD-KK (the “Sealing Order”).

By way of the October 3, 2019 minute order, the Court granted the motion to seal in part and otherwise denied the motion. The court ordered moving party to submit a supplemental brief and proposed order by October 18, 2019 specifically identifying the portions of the report containing tax return information to be sealed. The Court has not yet received these documents. Accordingly, the Court is inclined to place the entire neutral accountant report in the public record, unless moving party can demonstrate that compliance with the Court’s October 3, 2019 order is imminent.

Motions To Conduct Punitive Damages Discovery

Defendants’ request that the Court take judicial notice of court documents filed in this action is GRANTED per Evid. Code § 452(d)(court records).

Plaintiff Daniel Meyerov moves for an order permitting punitive damages discovery against Defendants Mark Friedman, David Friedman and Trident Group, Inc.

Civil Code § 3295(c) provides in pertinent part:

(c)  No pretrial discovery by the plaintiff shall be permitted with respect to the evidence referred to in paragraphs (1) and (2) of subdivision (a) unless the court enters an order permitting such discovery pursuant to this subdivision. . . . Upon motion by the plaintiff supported by appropriate affidavits and after a hearing, if the court deems a hearing to be necessary, the court may at any time enter an order permitting the discovery otherwise prohibited by this subdivision if the court finds, on the basis of the supporting and opposing affidavits presented, that the plaintiff has established that there is a substantial probability that the plaintiff will prevail on the claim pursuant to Section 3294. Such order shall not be considered to be a determination on the merits of the claim or any defense thereto and shall not be given in evidence or referred to at the trial.

“We hold here that before a trial court may enter an order allowing discovery of financial condition information under Civil Code section 3295, subdivision (c) . . ., it must (1) weigh the evidence presented by both sides, and (2) make a finding that it is very likely the plaintiff will prevail on his claim for punitive damages.” Jabro v. Superior Court (2002) 95 Cal.App.4th 754, 755 (bold emphasis added).

Against this backdrop of legislative intent, in which protecting the financial privacy of defendants is paramount, we interpret the language of section 3295(c), requiring the trial court to find based on supporting and opposing affidavits that the plaintiff has established there is a substantial probability he will prevail on his claim for punitive damages, to mean that before a court may enter an order permitting discovery of a defendant's financial condition, it must (1) weigh the evidence submitted in favor of and in opposition to motion for discovery, and (2) make a finding that it is very likely the plaintiff will prevail on his claim for punitive damages. In this context, we interpret the words "substantial probability" to mean "very likely" or "a strong likelihood" just as their plain meaning suggests. We note that the Legislature did not use the term "reasonable probability" or simply "probability," which would imply a lower threshold of "more likely than not."

Id. at 758 (bold emphasis added).

In contrast, section 3295(c) concerns a defendant's right to privacy and protection from being forced to settle unmeritorious lawsuits in order to protect this right. It is a discovery statute and does not implicate the traditional factfinding process or the right to a jury trial in any way. Indeed, section 3295(c) expressly states that an order thereunder "shall not be considered to be a determination on the merits of the claim or any defense thereto and shall not be given in evidence or referred to at the trial." (§ 3295(c).) Finally, although no court has specifically addressed section 3295(c) and interpreted the statute as allowing financial condition discovery based on a prima facie showing sufficient to avoid

The Court agrees with Defendants that it is premature to permit punitive damages discovery when the case is not even at issue as to the operative complaint. It is unknown whether any causes of action which may support punitive damages will remain.

More importantly, the Court has reviewed the portions of the neutral accountant report cited by Defendants, and agrees with Defendants that Plaintiff has failed to demonstrate a substantial probably of prevailing on his claim for punitive damages against Defendants Mark Friedman, David Friedman and Trident Group, Inc.

Accordingly, both motions to conduct punitive damages discovery as against Defendants Mark Friedman, David Friedman and Trident Group, Inc. is DENIED.

Motion For Terminating, Evidentiary and Monetary Sanctions

Plaintiff’s Evidentiary Objections

Declaration of Thomas N. Fitzgibbon

No. 1: SUSTAINED. Lack of foundation.

No. 2: SUSTAINED. Lack of personal knowledge.

No. 3: OVERRULED. Relevant.

No. 4: SUSTAINED. Lack of personal knowledge.

No. 5: SUSTAINED. Hearsay.

No. 6: SUSTAINED. Lack of personal knowledge.

No. 7: OVERRULED. Permissible legal opinion by counsel.

No. 8: SUSTAINED. Lack of personal knowledge.

No. 9: SUSTAINED. Lack of personal knowledge.

No. 10: SUSTAINED. Hearsay.

No. 11. OVERRULED. Relevant.

No. 12: SUSTAINED. Lack of personal knowledge.

No. 13: SUSTAINED. Hearsay.

No. 14: SUSTAINED. Hearsay.

Declaration of Tara Jackson

No. 1: SUSTAINED. Inadmissible lay opinion.

Declaration of Vu Pham

No. 1: SUSTAINED. Hearsay.

No. 2: SUSTAINED. Hearsay.

Discussion

Plaintiff moves for terminating, evidentiary and monetary sanctions against Defendants for spoliation of evidence.

“Spoliation” is “ ‘the destruction or significant alteration of evidence, or the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation.’ ” (Byrnie, supra, 243 F.3d at p. 107.) “[D]estruction of evidence relevant to proof of an issue at trial can support an inference that the evidence would have been unfavorable to the party responsible for its destruction.” (Kronisch v. U.S. (2d Cir. 1998) 150 F.3d 112, 126 (Kronisch); see also Cedars-Sinai Medical Center v. Superior Court (1998) 18 Cal.4th 1, 11 [74 Cal. Rptr. 2d 248, 954 P.2d 511] (Cedars-Sinai).) “In order for an adverse inference to arise from the destruction of evidence, the party having control over the evidence must have had an obligation to preserve it at the time it was destroyed.” (Kronisch, supra, 150 F.3d at p. 126.) In addition, the party seeking the benefit of an inference from spoliation “must demonstrate first that the records were destroyed with a  [*682]  culpable state of mind (i.e. where, for example, the records were destroyed knowingly, even if without intent to violate [a] regulation [requiring their retention], or negligently). Second, a party must show that the destroyed records were relevant to the party's claim or defense.” (Byrnie, supra, 243 F.3d at p. 109; but see Cedars-Sinai, supra, 18 Cal.4th at p. 14 [“there will typically be no way of telling what precisely the evidence would have shown and how much it would have weighed in the spoliation victim's favor”].)

Reeves v. MV Transportation, Inc. (2010) 186 Cal.App.4th 666, 681-82.

The Court finds that the modifications of which Plaintiff complains go to weight of the evidence, to be aided by the Neutral Accountant Report, as it pertains to the merits of Plaintiff’s claims against Defendants. Such weighing of evidence is to occur at trial. As Defendants state in their opposition at Page 10:9-10: “Meyerov challenges whether the changes or actions were proper, a matter to be resolved at trial, not on a Motion for Spoliation.” The Court does not find sufficient evidence that Defendants engaged in spoliation which would warrant sanctions at this stage of the litigation.

The motion for terminating, evidentiary and $47,000 in monetary sanctions is DENIED.

Defendants’ request for $33,600 in monetary sanctions is likewise DENIED.

Case Number: BC651099    Hearing Date: November 04, 2019    Dept: 48

MOTION TO COMPEL COMPLIANCE WITH SUBPOENA; REQUEST FOR SANCTIONS

MOVING PARTY: Plaintiff Daniel Meyerov

RESPONDING PARTY(S): No opposition filed.

PROOF OF SERVICE:

• Correct Address: No as to Brian D. Boydston, Esq (served at 10786 Le Conte Avenues, Los Angeles, CA 90024; address is listed as 2288 Westwood Blvd., Ste 212, Los Angeles, CA 90064-2000 on Bar website)
• 16/21 (CCP § 1005(b)): OK. Served by mail on July 25, 2019.

• DENY motion to compel compliance with subpoena and request for sanctions without prejudice.

ANALYSIS

Motion to Compel Compliance with Subpoena

It is unclear whether non-party Andrew Friedman received notice of such a motion, for instance, by service upon an attorney representing Friedman.

Plaintiff Daniel Meyerov moves to compel compliance with the subpoena served upon non-party Andrew Friedman and requests sanctions. The basis for this motion is CCP §§ 2020.220(c) and 2025.450. See Notice of Motion, Page 2:9-10. However, neither of these code sections authorize a motion to compel compliance and imposition of sanctions against a non-party witness:

CCP § 2020.220(c) provides:

(c) Personal service of any deposition subpoena is effective to require all of the following of any deponent who is a resident of California at the time of service:

(1) Personal attendance and testimony, if the subpoena so specifies.

(2) Any specified production, inspection, testing, and sampling.

(3) The deponent’s attendance at a court session to consider any issue arising out of the deponent’s refusal to be sworn, or to answer any question, or to produce specified items, or to permit inspection or photocopying, if the subpoena so specifies, or specified testing and sampling of the items produced.

CCP § 2025.450(a) provides:

(a) If, after service of a deposition notice, a party to the action or an officer, director, managing agent, or employee of a party, or a person designated by an organization that is a party under Section 2025.230, without having served a valid objection under Section 2025.410, fails to appear for examination, or to proceed with it, or to produce for inspection any document, electronically stored information, or tangible thing described in the deposition notice, the party giving the notice may move for an order compelling the deponent’s attendance and testimony, and the production for inspection of any document, electronically stored information, or tangible thing described in the deposition notice.

(Bold emphasis added.)

Accordingly, Plaintiff has failed to cite statutory authority to compel non-party Andrew Friedman to comply with the subpoena and for the imposition of sanctions against him.

The motion to compel compliance and request for sanctions is DENIED without prejudice to bringing a newly-noticed motion to compel based upon the applicable statute.