Tentative Rulings

Case Number: BC686569    Hearing Date: December 11, 2019    Dept: 37

HEARING DATE: December 11, 2019

CASE NUMBER: BC686569

CASE NAME: David Frith-Smith v. Frank Cornell, et al.

MOVING PARTY: Plaintiff, David Frith-Smith

OPPOSING PARTY: Defendant, Frank Cornell

TRIAL DATE: September 1, 2020 (non-jury)

PROOF OF SERVICE: OK

MOTION: Plaintiff’s Motion to Compel Further Responses to Request for Production, Set One and Request for Sanctions

OPPOSITION: November 27, 2019

REPLY: December 4, 2019 [Reply Declarations only]

TENTATIVE: Plaintiff’s Motion to Compel Production in Connection with the Notice of Deposition of Cornell is DENIED. Both parties’ requests for sanctions are also DENIED. Cornell is to give notice.

Background

This action arises out of Plaintiff, David Frith-Smith (“Plaintiff”) and Defendant, Frank Cornell (“Cornell”)’s general partnership, California Investors I (“CII”) Plaintiff contends that he is a limited partner of the partnership and that Cornell is a general partner. Plaintiff contends that Cornell has breached his duties as a general partner by failing to wind-up and dissolve the partnership after liquidation of the primary asset, as allegedly required by the partnership agreement. Plaintiff further contends that Cornell, in his capacity as a general partner, has failed to deliver accountings of the partnership upon reasonable demand.

Plaintiff alleges that Cornell, CII and the other defendants have breached their fiduciary duties under the partnership agreement “in employing themselves and related parties upon terms and conditions which unjustly enrich themselves and their related parties to the detriment of the limited partners.” (Complaint, ¶ 7.)

Plaintiff’s Complaint, filed December 12, 2017, alleges three causes of action: (1) “removal of general partner and for account,” (2) termination and dissolution of partnership, and (3) breach of fiduciary duty.

Plaintiff now moves to compel Cornell to produce further documents responsive to Requests 6 and 8 in connection a Notice of Deposition to Cornell. and to produce responsive documents. Plaintiff also purports to seek an award of sanctions. Cornell opposes the motion.

Procedural History

Plaintiff contends that the documents at issue in this motion relate to his repeated attempts to take Cornell’s deposition. (Motion, 2-4.) Plaintiff first noticed the deposition for January 10, 2019 and requested that Cornell produce various documents. (Id.) Specifically, Plaintiff seeks to compel documents for the following two requests:

1. Request No 6: “Any and all reports of the value of plaintiff’s interest in [CII], filed with any taxing authority of the United States for any period commencing on or after January 1, 2015.”

2. Request No. 8: “Any and all accounts, statements, reports or other compilation of the income, expenses, profits, losses or other indications of the financial results of operations of [CII], compiled by your or at your direction for any period commencing on or after January 1, 2015.”

Plaintiff alleges that he is entitled to documents in these categories because the partnership agreement for CII requires Cornell to make a yearly reporting to the partners, which has been allegedly withheld from Plaintiff is since 2015. (Motion, 3.) Cornell allegedly submitted to deposition on July 30, 2019 and produced 1435 pages of documents “a few days prior.” (Id.)

According to Plaintiff, “it was clear” from reviewing Cornell’s documents that no documents responsive to request number 8 were produced. (Id.) Further, Plaintiff appears to contend that after further meet and confer, Cornell did produce all documents responsive to request number 6, but still failed to produce General Ledgers and other documents responsive to request number 8. (Motion, 4; Declaration of Mark H. Boykin (“Boykin Decl.”), ¶ 3, Exhibit B.) Plaintiff contends that general ledgers are necessary to “judge the accuracy of the tax returns.” (Id.)

The Parties’ Meet and Confer Efforts

Plaintiff’s motion does not clearly demonstrate that he has engaged in sufficient meet and confer efforts prior to bringing the instant motion. Instead, Plaintiff purports to attach groups of emails in one exhibit, which he contends compromises of “multiple requests” to complete the meet-and-confer. (Motion, 5; Boykin Decl., ¶ 2, Exhibit A.) Cornell submits the declaration of Emil W. Herich in support of his contention that meet and confer efforts were insufficient.

On or about December 2, 2018, Plaintiff’s counsel served a notice of deposition of Cornell. (Declaration of Emil W. Herich (“Herich Decl.”), ¶ 2, Exhibit A. On December 18, 2018, Cornell objected to the notice of deposition. (Herich Decl. ¶ 3, Exhibit B.) Plaintiff’s counsel allegedly responded to Cornell’s letter on January 4, 2019 but also allegedly did not meaningfully respond to Cornell’s objections. (Herich Decl., ¶ 4.)

On May 9, 2019, Plaintiff served a new notice of deposition of Cornell. (Id.) On May 21, 2019, Cornell served objections to the new notice of deposition. (Id.) Eventually, the parties agreed that Cornell would appear for deposition on July 30, 2019 and it was further agreed that no new notice of deposition would be served. (Id.; Exhibits C-D.)

On July 30, 2019, Cornell appeared at his deposition. (Herich Decl., ¶ 5.) Prior to the deposition, Cornell produced an extensive amount of documents, including tax returns for CII. (Id.) During the deposition, Cornell’s counsel stated on the record in response to Plaintiff’s counsel’s inquiry that he would produce tax returns for CII if they were inadvertently left out of the production. (Herich Decl., ¶ 6, Exhibit E.) At the deposition, counsel engaged in the following discussion:

Herich: And counsel, I’ve already stated on the record, and I’ll say again, we produced the tax returns for the years that you’ve requested them, I think the last three years.”

Boykin: Well, you produced the federal returns?

Herich: I’m sorry?

Boykin: Did you produced federal returns?

Herich: Did we yet?

Boykin: Did you produce them in your document production?

Herich: I don’t – I don’t have a document production in front of me. I know that I have tax returns, and I know that we will produce them if they weren’t produced, and we will produce them.

(Herich Decl., Exhibit E, 98:14-99:4.)

On August 2, 2019, Plaintiff’s counsel wrote an email, stating that “pursuant to our agreement on the record, please produce the following items: 1. Year-end General Ledger Statements, with 12 months of activity in single reports (not monthly reports), for 2016, 2017, 2018; 2. Federal income-tax returns for the Partnership for 2017 and 2018.” (Herich Decl., ¶ 7, Exhibit F.) On August 21, 2019, Herich responded and stated that the income tax returns had been produced. (Id.) Nevertheless, Herich attests that he caused the tax returns to be produced again, along with the 2018 returns. (Id.)

On September 12, 2019, Plaintiff’s counsel wrote by email to again demand the same documents he demanded on August 2, 2019. (Herich Decl., ¶ 8, Exhibit G.) Herich attests that he produced all documents within his client’s possession, custody or control and that neither he nor his client knew what “partnership reports” referred to. (Id.) Herich further attests that his client had re-located to a smaller office and could not locate the general ledger documents. (Id.)

On October 8, 2019, Plaintiff’s counsel again wrote Cornell’s counsel by email, contending that Cornell had failed to comply with Plaintiff’s requests “after committing on the record.” (Herich Decl. ¶ 9, Exhibit H.) The instant motion was filed on October 11, 2019. On October 28, 2019, Herich responded to Plaintiff’s counsel’s email, stating that it was his understanding that “the general ledger(s) is subsumed with the tax returns.” (Id.)

From the evidence submitted, there clearly were a number of emails regarding discovery, but there was no clearly articulated discussion about exactly what the discovery dispute involved and did not involve. It is questionable that the meet and confer requirement was met, but there are more serious problems with the motion.

Plaintiff’s Motion to Compel Defendant to Further Respond to Demand For Documents Pursuant to Notice of Deposition

1. Timeliness of Motions

Pursuant to Code of Civil Procedure section 2025.480 subdivision (b), a motion to compel further responses to requests for production in connection with a deposition notice must be made no later than 60 days after the “completion of the record” of the deposition. (Code Civ. Proc., § 2025.480(b).)

Plaintiff contends that the motion is timely because the transcript on Cornell’s deposition was made available on August 13, 2019 (Motion, 1-2). The instant motion was filed on October 11, 2019. Cornell does not dispute this contention. Accordingly, the motion is timely.

1. Discussion

Under the Discovery Act, “any party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action or to the determination of any motion made in that action, if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence.” (Code Civ. Proc., § 2017.010.)

“If 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.” (Code Civ. Proc., § 2025.480(a).) A party moving to compel production of documents at a deposition “must be accompanied by a separate statement.” (Cal. Rules of Court, rule 3.1345(a).) The moving party must also include reasons why further discovery should be ordered: legal or factual arguments why the responses given were incomplete or nonresponsive, or the objections invalid. (Cal. Rules of Court, rule 3.1345(c).) The responding party has the burden to justify objections in response to a motion filed to compel. (Fairmont Ins. Co. v. Superior Court (2000) 22 Cal.4th 245, 255.)

Plaintiff seeks an order compelling Cornell to further respond to request numbers 6 and 8 to Cornell’s Notice of Deposition, as discussed above. As discussed above, Plaintiff mainly argues that he is entitled to a further production because general ledgers are necessary to verify the accuracy of CII’s tax returns. (Motion, 6.) Plaintiff does not submit a separate statement in support of his motion. On reply, Plaintiff submits his own declaration, wherein he attests that he is a certified public accountant and that the general ledgers he seeks Cornell to produce are necessary to determine the accuracy of the CII tax returns Cornell has already produced. (Declaration of Plaintiff in Support of Reply, ¶¶ 1, 3.)

Cornell opposes the motion and contends that Plaintiff’s motion is both procedurally and substantively defective.

Cornell first contends that the motion is procedurally defective because it does not include a separate statement. (Opposition, 5.) After a review of Plaintiff’s moving papers, the court is also unable to find a separate statement in connection with Plaintiff’s motion. A separate statemen is mandatory on a discovery motion and the failure to include one is sufficient grounds to deny the motion.

Accordingly, Plaintiff’s motion to compel further responses to request for production, numbers 6 and 8 in connection with Plaintiff’s Notice of Deposition of Cornell is DENIED.

Request for Sanctions

“The court shall impose a monetary sanction . . . against any party, person or attorney who unsuccessfully makes or opposes a motion to compel a further response to response to a demand, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.” (Code Civ. Proc., § 2031.310, subd. (h).)

“If a motion under subdivision (a) is granted, the court shall impose a monetary sanction in favor of the party who noticed the deposition and against the deponent or the party with whom the deponent is affiliated, unless the court finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.” (Code Civ. Proc., § 2025.450, subd. (g)(1).)

Plaintiff requests sanctions in the amount of $5,111.65 for attorneys fees and costs incurred by in connection with bringing the instant motion. Cornell also requests attorney’s fees against Plaintiff in the amount of $2,460.

Given the foregoing, the court declines to award sanctions to either party and finds that both parties have acted with substantial justification in bringing and opposing the instant motion.

Conclusion

Plaintiff’s Motion to Compel Production in Connection with the Notice of Deposition of Cornell is DENIED. Both parties’ requests for sanctions are also DENIED. Cornell is to give notice.