This case was last updated from Los Angeles County Superior Courts on 06/04/2019 at 07:11:31 (UTC).

JACOB BLALOCK ET AL VS HALT GOLD GROUP LLC ET AL

Case Summary

On 08/01/2017 JACOB BLALOCK filed a Labor - Wrongful Termination lawsuit against HALT GOLD GROUP LLC. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judge overseeing this case is ROBERT B. BROADBELT. The case status is Pending - Other Pending.
Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****0702

  • Filing Date:

    08/01/2017

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Labor - Wrongful Termination

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judge

ROBERT B. BROADBELT

 

Party Details

Plaintiffs and Cross Defendants

BLALOCK JACOB

NOVAK BENJAMIN

ORION PRECIOUS METALS INC.

Defendants and Respondents

PATRIOT GOLD GROUP LLC

CHARTOFF CHARLEY

CELANO MIKE

HANNEY JOHN JACK

ORBISON ALEXANDER

HALT GOLD GROUP LLC

HALT GOLD GROUP LLC DBA PATRIOT GOLD GROUP LLC

Defendant and Cross Plaintiff

HALT GOLD GROUP LLC DBA PATRIOT GOLD GROUP LLC

Attorney/Law Firm Details

Plaintiff Attorney

ZAFFOS ADAM P

Defendant Attorneys

HARRIS ADRIA K.

KENNEDY TRACEY ADANO ESQ.

Other Attorneys

NEMECEK DAVID P JR. ESQ.

 

Court Documents

Unknown

2/23/2018: Unknown

PLAINTIFFS JACOB BLALOCK AND BENJAMIN NOVAK'S OPPOSITION TO DEFENDANTS HALT GOLD GROUP, LLC (DBA PATRIOT GOLD GROUP, LLC), MIKE CELANO, CHARLEY CHARTOFF AND JOHN "JACK" HANNEY'S DEMURRER TO SIXTH CAUS

3/2/2018: PLAINTIFFS JACOB BLALOCK AND BENJAMIN NOVAK'S OPPOSITION TO DEFENDANTS HALT GOLD GROUP, LLC (DBA PATRIOT GOLD GROUP, LLC), MIKE CELANO, CHARLEY CHARTOFF AND JOHN "JACK" HANNEY'S DEMURRER TO SIXTH CAUS

Minute Order

3/7/2018: Minute Order

DEFENDANTS HALT GOLD GROUP, LLC (DBA PATRIOT GOLD GROUP, LLC), MIKE CELANO, CHARLEY CHARTOFF, AND JOHN "JACK" HANNEY'S REPLY IN SUPPORT OF DEMURRER TO PLAINTIFFS' FIRST AMENDED COMPLAINT AS TO THE SIX

3/8/2018: DEFENDANTS HALT GOLD GROUP, LLC (DBA PATRIOT GOLD GROUP, LLC), MIKE CELANO, CHARLEY CHARTOFF, AND JOHN "JACK" HANNEY'S REPLY IN SUPPORT OF DEMURRER TO PLAINTIFFS' FIRST AMENDED COMPLAINT AS TO THE SIX

PLAINTIFFS JACOB BLALOCK AND BENJAMIN NOVAK'S OPPOSITION TO DEFENDANT ALEXANDER ORBISON'S DEMURRER TO THE FOURTH AND SIXTH CAUSES OF ACTION OF FAC

3/9/2018: PLAINTIFFS JACOB BLALOCK AND BENJAMIN NOVAK'S OPPOSITION TO DEFENDANT ALEXANDER ORBISON'S DEMURRER TO THE FOURTH AND SIXTH CAUSES OF ACTION OF FAC

DEFENDANT ALEXANDER ORBISON'S REPLY IN SUPPORT OF DEMURRER TO PLAINTIFFS' FIRST AMENDED COMPLAINT AS TO THE FOURTH AND SIXTH CAUSES OF ACTION

3/15/2018: DEFENDANT ALEXANDER ORBISON'S REPLY IN SUPPORT OF DEMURRER TO PLAINTIFFS' FIRST AMENDED COMPLAINT AS TO THE FOURTH AND SIXTH CAUSES OF ACTION

Minute Order

3/15/2018: Minute Order

ORDER RE: DEFENDANTS' DEMURRER TO PLAINTIFF'S FIRST AMENDED COMPLAINT AS TO THE SIXTH CAUSE OF ACTION

3/15/2018: ORDER RE: DEFENDANTS' DEMURRER TO PLAINTIFF'S FIRST AMENDED COMPLAINT AS TO THE SIXTH CAUSE OF ACTION

Minute Order

3/22/2018: Minute Order

ORDER RE.: DEFENDANT ALEXANDER ORBISON'S DEMURRER TO PLAINTIFF'S FIRST AMENDED COMPLAINT AS TO THE FOURTH AND SIXTH CAUSES OF ACTION

3/22/2018: ORDER RE.: DEFENDANT ALEXANDER ORBISON'S DEMURRER TO PLAINTIFF'S FIRST AMENDED COMPLAINT AS TO THE FOURTH AND SIXTH CAUSES OF ACTION

DECLARATION OF ADAM ZAFFOS IN SUPPORT OF PLAINTIFFS' MOTION TO COMPEL RESPONSES TO SPECIAL INTERROGATORIES 13-16, 19, 21, 23, 25, 27,29 SET ONE (1), FORM INTERROGATORIES EMPLOYMENT 214.1 SET ONE (1),

4/5/2018: DECLARATION OF ADAM ZAFFOS IN SUPPORT OF PLAINTIFFS' MOTION TO COMPEL RESPONSES TO SPECIAL INTERROGATORIES 13-16, 19, 21, 23, 25, 27,29 SET ONE (1), FORM INTERROGATORIES EMPLOYMENT 214.1 SET ONE (1),

SEPARATE STATEMENT OF ITEMS IN DISPUTE IN SUPPORT OF PLAINTIFFS' MOTION TO COMPEL RESPONSES TO SPECIAL INTERROGATORIES 13-16, 19, 21, 23, 25, 27,29 SET ONE (1), FORM INTERROGATORIES EMPLOYMENT 214.1 S

4/5/2018: SEPARATE STATEMENT OF ITEMS IN DISPUTE IN SUPPORT OF PLAINTIFFS' MOTION TO COMPEL RESPONSES TO SPECIAL INTERROGATORIES 13-16, 19, 21, 23, 25, 27,29 SET ONE (1), FORM INTERROGATORIES EMPLOYMENT 214.1 S

PLAINTIFFS' NOTICE OF MOTION AND MOTION TO COMPEL RESPONSES TO SPECIAL INTERROGATORIES 13-16, 19, 21, 23, 25, 27, 29 SET ONE (1), FORM INTERROGATORIES EMPLOYMENT 214.1 SET ONE (1), AND REQUEST FOR PRO

4/5/2018: PLAINTIFFS' NOTICE OF MOTION AND MOTION TO COMPEL RESPONSES TO SPECIAL INTERROGATORIES 13-16, 19, 21, 23, 25, 27, 29 SET ONE (1), FORM INTERROGATORIES EMPLOYMENT 214.1 SET ONE (1), AND REQUEST FOR PRO

Proof of Service

4/10/2018: Proof of Service

Minute Order

4/13/2018: Minute Order

ORDER RE: PLAINTIFFS AND CROSS-DEFENDANTS JACOB BLALOCK AND BENJAMIN NOVAK AND CROSS-DEFENDANT ORION PRECIOUS METALS, INC.'S DEMURRER TO CROSS-COMPLAINT OF HALT GOLD GROUP, LLC

4/13/2018: ORDER RE: PLAINTIFFS AND CROSS-DEFENDANTS JACOB BLALOCK AND BENJAMIN NOVAK AND CROSS-DEFENDANT ORION PRECIOUS METALS, INC.'S DEMURRER TO CROSS-COMPLAINT OF HALT GOLD GROUP, LLC

DECLARATION OF NATASHA L. DOMEK IN SUPPORT OF I)EFENDANT HALT GOLD GROUP, LLC DBA PATRIOT GOLD GROUP LLC'S OPPOSITION TO PLAINTIFFS? MOTION TO COMIEL FURTHER DISCOVERY RESPONSES ANI) REQUEST FOR MONET

4/13/2018: DECLARATION OF NATASHA L. DOMEK IN SUPPORT OF I)EFENDANT HALT GOLD GROUP, LLC DBA PATRIOT GOLD GROUP LLC'S OPPOSITION TO PLAINTIFFS? MOTION TO COMIEL FURTHER DISCOVERY RESPONSES ANI) REQUEST FOR MONET

EFENDANT HALT GOLD GROUP, TIC BA PATRIOT GOLD GROUP LLC'S EPARATE STATEMENT IN SUPPORT F ITS OPPOSITION TO PLAINTIFFS' LOTION TO COMPEL FURTHER ISCO VERY RESPONSES AND EQUEST FOR MONETARY ANCTIONS

4/13/2018: EFENDANT HALT GOLD GROUP, TIC BA PATRIOT GOLD GROUP LLC'S EPARATE STATEMENT IN SUPPORT F ITS OPPOSITION TO PLAINTIFFS' LOTION TO COMPEL FURTHER ISCO VERY RESPONSES AND EQUEST FOR MONETARY ANCTIONS

153 More Documents Available

 

Docket Entries

  • 05/28/2019
  • Docketat 08:30 AM in Department 53, Robert B. Broadbelt, Presiding; Hearing on Demurrer - without Motion to Strike - Not Held - Rescheduled by Party

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  • 04/10/2019
  • Docketat 09:30 AM in Department 53, Robert B. Broadbelt, Presiding; Trial - Not Held - Continued - Stipulation

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  • 03/29/2019
  • Docketat 08:30 AM in Department 53, Robert B. Broadbelt, Presiding; Final Status Conference - Not Held - Continued - Stipulation

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  • 02/13/2019
  • Docketat 4:09 PM in Department 53, Robert B. Broadbelt, Presiding; Court Order

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  • 02/13/2019
  • DocketMinute Order ( (Court Order re Consolidation;)); Filed by Clerk

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  • 02/13/2019
  • DocketNotice (Of Entry of Order For Consolidation of Cases and Continuance of Trial Date and Pre-Trial Deadlines); Filed by Mike Celano (Defendant); CHARLEY CHARTOFF (Defendant); HALT GOLD GROUP LLC (Defendant) et al.

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  • 01/29/2019
  • Docketat 08:30 AM in Department 53, Robert B. Broadbelt, Presiding; Ex-Parte Proceedings

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  • 01/29/2019
  • DocketMinute Order ( (Hearing on Ex Parte Application;)); Filed by Clerk

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  • 01/29/2019
  • DocketStipulation and Order (to Consolidate Cases); Filed by Clerk

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  • 01/17/2019
  • DocketDemurrer - without Motion to Strike; Filed by Orion Precious Metals, Inc. (Cross-Defendant); JACOB BLALOCK (Cross-Defendant)

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313 More Docket Entries
  • 08/08/2017
  • DocketNOTICE OF CASE MANAGEMENT CONFERENCE

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  • 08/08/2017
  • DocketORDER TO SHOW CAUSE HEARING

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  • 08/08/2017
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 08/08/2017
  • DocketOSC-Failure to File Proof of Serv; Filed by Clerk

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  • 08/03/2017
  • DocketNotice; Filed by Jacob Blalock (Plaintiff); BENJAMIN NOVAK (Plaintiff)

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  • 08/03/2017
  • DocketNOTICE OF ERRATA

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  • 08/01/2017
  • DocketSUMMONS

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  • 08/01/2017
  • DocketCOMPLAINT FOR DAMAGES FOR: (1) WRONGFUL TERMINATION IN VIOLATION OF PUBLIC POLICY;ETC

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  • 08/01/2017
  • DocketComplaint; Filed by Jacob Blalock (Plaintiff); BENJAMIN NOVAK (Plaintiff)

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  • 11/11/1971
  • DocketCase Management Statement; Filed by HALT GOLD GROUP LLC (Defendant)

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Tentative Rulings

Case Number: ****0702 Hearing Date: November 18, 2022 Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

jacob blalock , et al.;

Plaintiffs,

vs.

halt gold group, llc, dba patriot gold group, llc , et al.;

Defendants.

Case No.:

****0702

Hearing Date:

November 18, 2022

Time:

10:00 a.m.

[Tentative] Order RE:

cross-complainants’ motion to file selected portions of documents under seal

MOVING PARTIES: Cross-Complainants Halt Gold Group, LLC dba Patriot Gold Group, LLC, and Mike Celano

RESPONDING PARTY: Unopposed

Motion to File Selected Portions of Documents Under Seal

The court considered the moving papers filed in connection with this motion. No opposition papers were filed.

LEGAL STANDARD

Generally, court records are presumed to be open unless confidentiality is required by law. (Cal. Rules of Court, rule 2.550, subd. (c).) If the presumption of access applies, the court may order that a record be filed under seal “if it expressly finds facts that establish: (1) There exists an overriding interest that overcomes the right of public access to the record; (2) The overriding interest supports sealing the record; (3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; (4) The proposed sealing is narrowly tailored; and (5) No less restrictive means exist to achieve the overriding interest.” (Cal. Rules of Court, rule 2.550, subd. (d).)

DISCUSSION

Cross-Complainants Halt Gold Group, LLC dba Patriot Gold Group, LLC and Mike Celano (“Cross-Complainants”) move the court for an order sealing the following documents: (1) exhibits E through H, as attached to the declaration of Mike Celano, and (2) exhibits JJ through SS, as attached to the declaration of David P. Nemecek, Jr. The court notes that Cross-Complainants assert that they filed these declarations in support of their motion in limine number 3. (Motion to Seal, filed June 13, 2022, p. 4:5-18.) Although Cross-Complainants filed motion in limine number 3 with the court on June 10, 2022, it does not appear that Cross-Complainants filed the subject declarations with the court on that date. The court does note that Cross-Complainants filed the declarations of Mike Celano and David P. Nemecek with the court on August 29, 2022, which state (1) exhibits E through H to the declaration of Mike Celano are redacted, and (2) exhibits JJ through SS to the declaration of David P. Nemecek, Jr. are redacted. (Celano Decl., filed August 29, 2022, pp. 23-30; Nemecek Decl., filed August 29, 2022, pp. 373-392.) The court therefore considers Cross-Complainants’ motion to be directed to the declarations filed on August 29, 2022.

The court finds that (1) there exists an overriding interest not to disclose the redacted portions of the specified exhibits described above that overcomes the right of public access to the record, because they consist of documents concerning cross-complainant Patriot Gold’s prospective customers, and documents designated confidential pursuant to a stipulated protective order, (2) the overriding interest supports sealing the record to preserve the confidentiality of the documents, (3) a substantial probability exists that the overriding interest will be prejudiced if the records are not sealed, (4) the proposed sealing is narrowly tailored; and (5) no less restrictive means exist to achieve the overriding interest. (Cal. Rules of Court, rule 2.550, subd. (d).)

ORDER

The court grants cross-complainants Halt Gold Group, LLC, dba Patriot Gold Group LLC, and Mike Celano’s motion to file selected portions of documents under seal.

The court orders that the complete, unredacted versions of (1) “Declaration of Mike Celano in Support of Cross-Complainants’ Motion In Limine No. 3 for Issue and Evidence Sanctions,” filed on August 29, 2022, and (2) “Declaration of David P. Nemecek, Jr., in Support of Motion Limine No. 3 for Issue and Evidence Sanctions,” filed on August 29, 2022, shall be filed under seal.

Pursuant to California Rules of Court, rule 2.551, subdivision (e), the court directs the clerk to file this order, maintain the records ordered sealed in a secure manner, and clearly identify the records as sealed by this this order.

The court orders cross-complainants Halt Gold Group, LLC, dba Patriot Gold Group LLC, and Mike Celano to give notice of this ruling.

IT IS SO ORDERED.

DATED: November 18, 2022

Robert B. Broadbelt III

Judge of the Superior Court



Case Number: ****0702 Hearing Date: July 14, 2022 Dept: 53

Blalock v. Halt Gold Group, LLC, Case No. ****0702

Ex Parte Applications – 7/14/22

Parties have filed two ex parte applications which have been presented to the court today.

First, cross-complainant Halt Gold Group, LLC has filed an ex parte application for an order (1) advancing the hearing on its motion to compel further responses to discovery requests, (2) continuing the trial and Final Status Conference, and (3) reopening discovery for the limited purpose of allowing it to serve a demand for inspection. The court finds that cross-complainant Halt Gold Group, LLC has not satisfied the requirement of California Rules of Court, rule 3.1202(c) that an applicant for an ex parte order must make an affirmative factual showing in a declaration containing competent testimony based on personal knowledge of irreparable harm, immediate danger, or other statutory basis for granting relief ex parte. The discovery cutoff and discovery motion cutoff dates have now passed. (Code Civ. Proc., 2024.020, subds. (a), (b).) The court finds that cross-complainant Halt Gold Group, LLC has not shown good cause to continue the trial and Final Status Conference. The court denies cross-complainant Halt Gold Group, LLC’s request to reopen discovery for a limited purpose after considering the factors set forth in Code of Civil Procedure section 2024.050, subdivision (b). The court therefore denies cross-complainant Halt Gold Group, LLC’s ex parte application. The court orders cross-complainant Halt Gold Group, LLC to give notice of this order.

Second, plaintiffs and cross-defendants have filed a renewed ex parte application to advance and shorten time for the hearing on their motion to compel the deposition of defendant Halt Gold Group, LLC’s person most qualified. The court finds that plaintiffs and cross-defendants have not met their burden to show new or different facts, circumstances, or law to support their renewed Ex Parte Application. (Code Civ. Proc., 1008, subd. (b).) The court also finds that plaintiffs and cross-defendants have not satisfied the requirement of California Rules of Court, rule 3.1202(c) that an applicant for an ex parte order must make an affirmative factual showing in a declaration containing competent testimony based on personal knowledge of irreparable harm, immediate danger, or other statutory basis for granting relief ex parte. The discovery cutoff and discovery motion cutoff dates have now passed. (Code Civ. Proc., 2024.020, subds. (a) (b).) The court therefore denies plaintiffs and cross-defendants’ ex parte application. The court orders plaintiffs and cross-defendants to give notice of this order.



Case Number: ****0702 Hearing Date: March 3, 2022 Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

jacob blalock , et al.;

Plaintiffs,

vs.

halt gold group, llc , et al.,

Defendants.

Case No.:

****0702

Hearing Date:

March 3, 2022

Time:

10:00 a.m.

[Tentative] Order RE:

motion for summary judgment or, in the alternative, summary adjudication

MOVING PARTIES: Cross-Defendants Jacob Blalock, Benjamin Novak, and Orion Precious Metals, Inc.

RESPONDING PARTIES: Cross-Complainants Halt Gold Group, LLC dba Patriot Gold Group LLC and Mike Celano

Motion for Summary Judgment or, in the Alternative, Summary Adjudication on the Second Amended Cross-Complaint

The court considered the moving, opposition, and reply papers filed in connection with this motion.

EVIDENTIARY OBJECTIONS

The court rules on Cross-Complainants’ evidentiary objections to the declaration of Jacob Blalock as follows:

The court sustains Objection No. 10.

The court overrules Objections Nos. 1-9, 11-13.

The court rules on Cross-Complainants’ evidentiary objections to the declaration Benjamin Novak as follows:

The court sustains Objection No. 10 and overrules the remaining objections.

The court rules on Cross-Complainants’ evidentiary objections to the declaration of Adam P. Zaffos as follows:

The court sustains Objection No. 6.

The court overrules Objections Nos. 1-5, 7-12.

REQUEST FOR JUDICIAL NOTICE

The court grants Cross-Defendants’ request for judicial notice under California Evidence Code section 452, subdivision (d).

LEGAL STANDARD

The purpose of a motion for summary judgment or summary adjudication “is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) “Code of Civil Procedure section 437c, subdivision (c), requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.)

“On a motion for summary judgment, the initial burden is always on the moving party to make a prima facie showing that there are no triable issues of material fact.” (Scalf v. D.B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519.) A defendant or cross-defendant moving for summary judgment or summary adjudication “has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action . . . cannot be established, or that there is a complete defense to the cause of action.” (Code Civ. Proc., 437c, subd. (p)(2).) “Once the defendant or cross-defendant has met that burden, the burden shifts to the plaintiff or cross-complainant to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.” (Code Civ. Proc., 437c, subd. (p)(2).) “If the plaintiff cannot do so, summary judgment should be granted.” (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463, 467.) “When deciding whether to grant summary judgment, the court must consider all of the evidence set forth in the papers (except evidence to which the court has sustained an objection), as well as all reasonable inferences that may be drawn from that evidence, in the light most favorable to the party opposing summary judgment.” (Id. at p. 467; Code Civ. Proc., 437c, subd. (c).)

DISCUSSION

Cross-Defendants Jacob Blalock (“Blalock”), Benjamin Novak (“Novak”), and Orion Precious Metals, Inc. (“Orion”) (collectively, “Cross-Defendants”) move for summary judgment, or in the alternative, summary adjudication, on the Second Amended Cross-Complaint (“SACC”) filed by Halt Gold Group, LLC, d/b/a Patriot Gold Group, LLC (“Patriot”) and Mike Celano (“Celano”) (collectively, “Cross-Complainants”).

  1. First Cause of Action for Misappropriation of Trade Secrets

Cross-Defendants move for summary adjudication as to the first cause of action for misappropriation of trade secrets based on the following arguments: (1) Patriot cannot establish that it owned a trade secret; (2) Patriot cannot establish that Cross-Defendants misappropriated any trade secret; (3) Patriot cannot establish that Cross-Defendants’ actions damaged Patriot; and/or (4) Patriot’s claim is barred by the doctrine of unclean hands.

“Under the [California Uniform Trade Secrets Act], a prima facie claim for misappropriation of trade secrets requires the plaintiff to demonstrate: (1) the plaintiff owned a trade secret, (2) the defendant acquired, disclosed, or used the plaintiff’s trade secret through improper means, and (3) the defendant’s actions damaged the plaintiff.” (Sargent Fletcher, Inc. v. Able Corp. (2003) 110 Cal.App.4th 1658, 1665.) The statute defines a trade secret to be information, including a formula, pattern, compilation, program, device, method, technique, or process that (1) derives independent economic value from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. (Cal. Civ. Code 3426.1, subd. (d).) Improper means is defined to include theft, bribery, misrepresentation, breach, or inducement of a breach of a duty to maintain secrecy, or espionage. (Cal. Civ. Code 3426.1, subd. (a).)

The court finds that Cross-Defendants have not met their burden of showing that Patriot cannot establish it owned a trade secret. Further, Cross-Defendants rely on incompetent evidence because the referenced declarations were not signed under penalty of perjury. (Cross-Def. Ex. 8; Code Civ. Proc., 2015.5.)

The court finds that Cross-Defendants have not met their burden of showing that the element of misappropriation cannot be established. Andrew Clay, a sales representative employed by Patriot, stated in his declaration that, on the morning of May 9, 2017, Clay observed Blalock and Novak entering Patriot’s office, where they then removed documents and folders contained in desks situated at their workstations. (Cross-Def. Ex. 18, Andrew Clay Decl., 1-3.) Jack Hanney, member of Patriot, stated in his declaration that he printed a copy of Patriot’s customer list and gave it to Novak because, at that time, he was working with Novak to review information specific to Patriot’s customers. (Cross-Def. Ex. 19, Hanney Decl., 1, 3.) Mr. Hanney states that the documents have been missing since Blalock and Novak entered Patriot’s office without authorization. (Id., 5.) The court finds that this information is sufficient to establish an inference that protected information was improperly taken by Novak and Blalock.

The court finds that Cross-Defendants have not met their burden of showing that the first cause of action for misappropriation of trade secrets has no merit because Cross-Defendants have not shown that the element of damages cannot be established. Cross-Defendants rely again on the inadmissible declarations, described above, to confirm past relationships with the customers that Cross-Complainants contend moved from Patriot to Orion. (Cross-Def. Ex. 8; Code Civ. Proc., 2015.5.)

Cross-Defendants also move for summary adjudication on the ground that Patriot’s misappropriation claim is barred by the doctrine of unclean hands.

“Unclean hands . . . requires inequitable conduct by the plaintiff in connection with the matter in controversy and provides a complete defense to the plaintiff’s action.” (Dickson, Carlson & Campillo v. Pole (2000) 83 Cal.App.4th 436, 446.) “The defense of unclean hands does not apply in every instance where the plaintiff has committed some misconduct in connection with the matter in controversy, but applies only where it would be inequitable to grant the plaintiff any relief.” (Id. at pp. 446-447.) “Whether the defense applies in particular circumstances depends on the analogous case law, the nature of the misconduct, and the relationship of the misconduct to the claimed injuries.” (Id. at p. 447.) “The decision of whether to apply the defense based on the facts of the case is a matter within the trial court’s discretion.” (Ibid.) “A court’s discretion to grant an equitable defense such as unclean hands is not unlimited. The court must consider the material facts affecting the equities between the parties . . . .” (Ibid.)

“To deny relief to a party under the unclean hands doctrine, the improper conduct must be ‘in the particular transaction or connected with the subject matter of the litigation that is a defense.’ [Citations.]” (Brown v. Grimes (2011) 192 Cal.App.4th 265, 282; see O’Flaherty v. Belgum (2004) 115 Cal.App.4th 1044, 1060 [the unclean hands doctrine does not apply if the inequitable conduct did not occur in the transaction to which the relief sought relates].) “‘“If he [the wrongdoer] is not guilty of inequitable conduct toward the defendant in that transaction, his hands are “as clean as the court can require.”’ [Citations.]” (Id. at p. 283.) Here, Cross-Defendants have not met their burden to show that the defense of unclean hands bars the cause of action for misappropriation of trade secrets because they have not established that the alleged inequitable conduct of Cross-Complainants occurred in the transaction that is the subject of that cause of action.

The court therefore denies Cross-Defendants’ motion for summary adjudication as to the first cause of action for misappropriation of trade secrets.

  1. Second Cause of Action for Breach of Contract

“A cause of action for damages for breach of contract is comprised of the following elements: (1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to plaintiff.” (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1173.)

The court finds that Cross-Defendants have not met their burden of showing that the second cause of action for breach of contract has no merit because Cross-Defendants have not shown that the information obtained by Cross-Defendants, i.e., the customer information and lead sheets, does not constitute confidential information.

The court does note that Cross-Defendants have met their burden of showing that the language of the contracts did not bar Blalock and Novak, “following termination of [their] employment with [Patriot] for any reason, from using and/or disclosing [their] personal and business contacts and acquaintances, whether or not developed before or during her relationship with the Company [i.e., Patriot], even if such use is deemed to be competitive with the business of the Company.” (RJN Ex. 1, Ex. A 9.1, Ex. B, 9.1.) This evidence may support a finding that there was no breach of contract for use of the customer lists, even if competitive.

However, Cross-Complainants have also alleged that Blalock and Novak breached the terms of their agreements “by failing and refusing to return or destroy all Confidential Information in their possession upon the termination of their employment with Patriot” despite Patriot’s demand that they do so. (SACC 43.) Cross-Defendants do not address this theory other than arguing that the information was not confidential, a showing which the Cross-Defendants have failed to make. Even if the evidence presented was sufficient to show that the breach of contract claim as to the use of the customer information could not be established, “[a] motion for summary adjudication shall be granted only if it completely disposes of a cause of action…” (Code Civ. Proc., 437c, subd. (f)(1) [emphasis added].) This evidence does not completely dispose of Cross-Complainants’ breach of contract claim.

The court therefore denies Cross-Defendants’ motion for summary adjudication as to the second cause of action for breach of contract.

  1. Third Cause of Action for Defamation

“The elements of a defamation claim are (1) a publication that is (2) false, (3) defamatory, (4) unprivileged, and (5) has a natural tendency to injure or causes special damage.” (Sanders v. Walsh (2013) 219 Cal.App.4th 855, 862.) Slander is statutorily defined to include false publications which charges any person with crime, or having been indicted, convicted, or punished for crime, or tends to directly cause injury in respect to one’s profession. (Cal. Civ. Code 46, subd. (1), (3).) “A slander that falls within the first four subdivisions of Civil Code section 46 is slander per se and requires no proof of actual damages. [Citation.] A slander that does not fit into those four subdivisions is slander per quod, and special damages are required for there to be any recovery for that slander.” (Regalia v. The Nethercutt Collection (2009) 172 Cal.App.4th 361, 367 [internal citations omitted].)

The court finds that Cross-Defendants have not met their burden of showing that the third cause of action for defamation has no merit because Cross-Defendants have not shown that the statements do not constitute slander per se. Carlene Hoeksema testified in her declaration that Blalock stated that Patriot and Celano “were dishonest and were engaging in criminal activity.” (Def. Ex. 15, Hoeksema Decl. dated January 20, 2020, 4.) A statement which “[c]harges any person with crime” constitutes slander per se. (Cal. Civ. Code 46, subd. (1).) The statement by plaintiff Blalock falls within this definition. The court disagrees with Cross-Defendants’ position that this case is analogous to the facts presented in Okun v. Superior Court, where the statement was considered to imply “moral criticism of objectives and methods, not the occurrence of” a crime. (Okun v. Superior Court (1981) 29 Cal.3d 442, 459.) The statement that Cross-Complainants “were engaging in criminal activity” plainly charges Cross-Complainants with a crime. Accordingly, the court denies Cross-Defendants’ motion for summary adjudication to the extent it is based on this ground. The court also denies Cross-Defendants’ motion for summary adjudication to the extent it is based on Cross-Defendants’ arguments relating to Cross-Complainants’ inability to establish damages, because “[a] slander that falls within [Civil Code section 46] is slander per se and requires no proof of actual damages.” (Regalia, supra, 172 Cal.App.4th at 367.)

The court notes that Cross-Defendants also move for summary adjudication by arguing that the declarations by Celano and Hoeksema are inconsistent. (Cross-Def. Ex. 13, Celano Decl.; Ex. 14, Hoeksema Decl. dated October 20, 2017 [containing no assertion of Blalock’s specific statement]; Ex. 15, Hoeksema Decl. dated January 20, 2020 [containing the above-quoted assertion].) The court finds that Cross-Defendants have not met their burden of showing that the third cause of action for defamation has no merit because Cross-Defendants have not shown that there is a clear and unequivocal admission that there is no evidence of the defamatory statements.

The court therefore denies Cross-Defendants’ motion for summary adjudication as to the third cause of action for defamation.

ORDER

The court denies Cross-Defendants motion for summary judgment, or in the alternative, summary adjudication.

The court orders Cross-Complainants to give notice of this ruling.

IT IS SO ORDERED.

DATED: March 3, 2022

Robert B. Broadbelt III

Judge of the Superior Court



Case Number: ****0702 Hearing Date: February 8, 2022 Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

JACOB BLALOCK , et al.;

Plaintiffs,

vs.

Halt gold group, llc , et al.,

Defendants.

[AND RELATED CROSS-ACTIONS]

Case No.:

****0702

Hearing Date:

February 8, 2022

Time:

10:00 a.m.

[Tentative] Order RE:

MOTION to quash business records subpoena;

Motion for protective order;

motion to compel compliance;

motion for sanctions

MOVING PARTY: Plaintiffs and Cross-Defendants, Jacob Blalock, Benjamin Novak, and Cross-Defendant, Orion Precious Metals, Inc.

RESPONDING PARTIES: Cross-Complainants, Halt Gold Group LLC dba Patriot Gold Group LLC and Mike Celano

1. Cross-Defendants’ Motion to Quash the Business Records Subpoena Issued to Hubspot, Inc.

MOVING PARTY: Plaintiffs and Cross-Defendants, Jacob Blalock, Benjamin Novak, and Cross-Defendant, Orion Precious Metals, Inc.

RESPONDING PARTIES: Cross-Complainants, Halt Gold Group LLC dba Patriot Gold Group LLC and Mike Celano

  1. Cross-Defendants’ Motion for a Protective Order

    MOVING PARTY: Cross-Complainants, Halt Gold Group LLC dba Patriot Gold Group LLC and Mike Celano

    RESPONDING PARTIES: Cross-Defendant, Orion Precious Metals, Inc.

    1. Cross-Complainants’ Motion to Compel Compliance with Court Order

      MOVING PARTY: Plaintiffs and Cross-Defendants, Jacob Blalock, Benjamin Novak, and Cross-Defendant, Orion Precious Metals, Inc.

      RESPONDING PARTIES: Cross-Complainants, Halt Gold Group LLC dba Patriot Gold Group LLC and Mike Celano

    2. Cross-Defendants’ Motion for Sanctions

The court considered all papers submitted for these motions.

Background

This hearing concerns four motions. First, Cross-Defendants Jacob Blalock (“Blalock”), Benjamin Novak (“Novak”), and Orion Precious Metals, Inc. (“Orion”) seek an order quashing the deposition subpoena of Cross-Complainants Halt Gold Group, LLC, dba Patriot Gold Group, LLC (“Patriot”), and Mike Celano (“Celano”) for production of business records issued to Hubspot, Inc. Cross-Defendants also request monetary sanctions against Cross-Complainants and their counsel of record. Cross-Complainants oppose the motion.

Second, the same Cross-Defendants seek a protective regarding 12 sets of form interrogatories, special interrogatories, requests for production, and requests for admission. Cross-Defendants also request monetary sanctions against Cross-Complainants and their counsel of record. Cross-Complainants oppose the motion.

Third, Patriot and Celano seek an order compelling Orion to comply with an order issued on December 8, 2020. Patriot and Celano also seek monetary sanctions and an OSC regarding contempt to be issued. Orion opposes the motion.

Fourth, Blalock, Novak, and Orion seek sanctions under Code of Civil Procedure section 128.7. They request an order dismissing the cross-complaint and imposing monetary sanctions on Patriot and Celano. Cross-Complainants oppose the motion.

LEGAL STANDARD

Code of Civil Procedure section 1987.1 states, “[w]hen a subpoena requires the attendance of a witness or the production of books, documents or other things before a court, or at the trial of an issue therein, …, upon motion reasonably made by the party, the witness, or any consumer described in Section 1985.3, or upon the court's own motion after giving counsel notice and an opportunity to be heard, may make an order quashing the subpoena entirely, modifying it, or directing compliance with it upon such terms or conditions as the court shall declare, including protective orders.”

Code of Civil Procedure section 1987.2(a) provides, as follows: “Except as specified in subdivision (c), in making an order pursuant to motion made under subdivision (c) of Section 1987 or under Section 1987.1, the court may in its discretion award the amount of the reasonable expenses incurred in making or opposing the motion, including reasonable attorney’s fees, if the court finds the motion was made or opposed in bad faith or without substantial justification or that one or more of the requirements of the subpoena was oppressive.”

Code of Civil Procedure section 2030.090(a) provides that, after interrogatories are propounded, the responding party, and any other party or affected natural person or organization may promptly move for a protective order. This motion shall be accompanied by a meet and confer declaration. (Code Civ. Proc., 2030.090(a).) The court, for good cause, may issue a protective order to protect a party from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense. (Code Civ. Proc., 2030.090(b).) The protective order may include an order that particular interrogatories need not be answered and that the number of interrogatories is unwarranted. (Code Civ. Proc., 2030.090(b)(1), (2).) If the responding party seeks a protective order on the ground that the number of interrogatories is unwarranted, the propounding party shall have the burden of justifying the number of these interrogatories. (Code Civ. Proc., 2030.040(b).)

Similarly, when an inspection demand has been propounded, the responding party may promptly move for a protective order. (Code Civ. Proc., 2031.060(a).) The protective order may include an order that all or some of the items in the demand need not be produced. (Code Civ. Proc., 2031.060(b)(1).)

Further, when a request for admission has been propounded, the responding party may promptly move for a protective order. (Code Civ. Proc., 2033.080(a).) The protective order may include an order that all or some of the requests need not be produced. (Code Civ. Proc., 2033.080(b)(1).)

Code of Civil Procedure section 128.7 provides that the court may impose monetary sanctions on a party or attorney that presents a pleading, petition, motion, or other similar papers in the following circumstances:

1) the document is presented primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.

2) the claims, defenses, and other legal contentions therein are not warranted by existing law or by a non-frivolous argument for the extension, modification, or reversal of existing law or the establishment of new law.

3) the allegations and other factual contentions have no evidentiary support;

4) the denials of factual contentions are not warranted on the evidence.

Accordingly, under section 128.7 there are basically three types of submitted papers that warrant sanctions:

1) factually frivolous (not well-grounded in fact);

2) legally frivolous (not warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law); and

3) papers interposed for an improper purpose.

(Guillemin v. Stein (2002) 104 Cal. App. 4th 156, 167.)

In order to impose sanctions, the court must find that the conduct is “objectively unreasonable”. (Id.)

DISCUSSION

1. Motion to Quash Subpoena Issued to Hubspot, Inc.

The court denies the motion to quash as to requests for production numbers 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, and 22.

The court grants the motion to quash with as to requests for production numbers 1, 2, 3, 4, 5, 23, 24, 25, 26, 27, and 28 because they are overbroad and seek the production of information that is not relevant to the subject matter of this action or reasonably calculated to the discovery of admissible evidence.

The court denies the requests for sanctions because the circumstances presented make the imposition of sanctions unjust in light of the mixed results of the rulings.

2. Motion for Protective Order

Cross-Defendants seek a protective order directing that Cross-Defendants need not respond to 12 sets of written discovery served by Patriot. Below, the court refers to the 12 sets of written discovery at issue as “requests” in the order set forth in the notice of motion.

The court denies the motion with regards to requests 1, 2, 3, 7, 8, and 9 in the notice of motion.

The court grants in part the motion as to request 4 in the notice of motion and Cross-Defendants need not respond to special interrogatories 53, 54, and 55 because the court finds that those interrogatories are oppressive and would impose undue burden and expe nse on the responding party. The court denies the motion as to special interrogatories 28 to 52.

The court grants the motion as to request 5 in the notice of motion and Cross-Defendants need not respond to special interrogatories 120 to 139 because the court finds that these interrogatories are oppressive and would impose undue burden and expense on the responding party.

The court grants the motion as to request 6 in the notice of motion and Cross-Defendants need not respond to special interrogatories 120 to 139 because the court finds that these interrogatories are oppressive and would impose undue burden and expense on the responding party.

The court grants in part the motion as to request 10 in the notice of motion and Cross-Defendants need not respond to demand for inspection number 2 because the court finds that this demand is oppressive and would impose undue burden and expense on the responding party. The court denies the motion as to requests for production 33 to 74.

The court grants the motion as to request 11 in the notice of motion and Cross-Defendants need not respond to demand for inspection number 2 because the court finds that this demand is oppressive and would impose undue burden and expense on the responding party. The court denies the motion as to requests for production 81 to 135.

The court grants the motion as to request 12 in the notice of motion and Cross-Defendants need not respond to demand for inspection number 2 because the court finds that this demand is oppressive and would impose undue burden and expense on the responding party. The court denies the motion as to requests for production 81 to 135.

The court denies the requests for sanctions because the circumstances presented make the imposition of sanctions unjust in light of the mixed results of the rulings.

3. Motion to Compel Compliance

Patriot Gold moves for an order to compel Orion to fully comply with the December 8, 2020 order. The court denies Patriot Gold’s motion because (1) there is no reason for the court to issue an order compelling Orion to comply with an order that the court has already made, and (2) Orion has submitted evidence that it has substantially complied with the court’s order.

The court denies the requests to impose sanctions under Code of Civil Procedure sections 177.5, 2023.010, 2023.030, or 2031.300.

The court denies the application to set an OSC re: contempt for the following reasons. First, it is improperly included in Patriot Gold’s motion requesting other relief instead of a separate application. Second, the declaration submitted in support of the request does not state a cause of action for contempt. (Code Civ. Proc., 1211, subd. (a) [“When the contempt is not committed in the immediate view and presence of the court, or of the judge at chambers, an affidavit shall be presented to the court or judge of the facts constituting the contempt.”].)

“As a general rule, the elements of contempt include (1) a valid order, (2) knowledge of the order, (3) ability to comply with the order, and (4) willful failure to comply with the order.” (In re Ivey (2000) 85 Cal.App.4th 793, 798.) The court finds that the declaration of David Nemecek, Jr., filed in support of the OSC re: contempt on March 5, 2021 does not adequately allege elements 2, 3, and 4.

The court denies the motion in its entirety.

4. Motion for Sanctions under Code of Civil Procedure section 128.7

Cross-Defendants argue that the Cross-Complaint lacks evidentiary support and was presented for an improper purpose. The court finds that the Cross-Defendants have not met their burden to establish that the pleadings lack evidentiary support or that they were presented for an improper purpose.

The court therefore denies Cross-Defendants’ motion for sanctions under Code of Civil Procedure, section 128.7.

ORDER

1. The court denies the motion of Blalock, Novak, and Orion to quash the subpoena issued to Hubspot, Inc. with regard to requests for production numbers 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, and 22. The court grants the motion to quash with regard to requests for production numbers 1, 2, 3, 4, 5, 23, 24, 25, 26, 27, and 28. The court denies all requests for sanctions.

2. The court issues the following orders on the motion of Blalock, Novak, and Orion for a protective order:

(1) The court denies the motion with regard to requests 1, 2, 3, 7, 8, and 9 in the notice of motion.

(2) The court grants in part the motion with regard to request 4 in the notice of motion and Cross-Defendants need not respond to special interrogatories 53, 54, and 55. The court denies the motion with regard to special interrogatories 28 to 52 in request 4.

(3) The court grants the motion with regard to request 5 in the notice of motion and Cross-Defendants need not respond to special interrogatories 120 to 139.

(4) The court grants the motion with regard to request 6 in the notice of motion and Cross-Defendants need not respond to special interrogatories 120 to 139.

(5) The court grants in part the motion with regard to request 10 in the notice of motion and Cross-Defendants need not respond to demand for inspection number 2. The court denies the motion with regard to requests for production 33 to 74 in request 10.

(6) The court grants the motion with regard to request 11 in the notice of motion and Cross-Defendants need not respond to demand for inspection number 2. The court denies the motion with regard to requests for production 81 to 135 in request 11.

(7) The court grants the motion with regard to request 12 in the notice of motion and Cross-Defendants need not respond to demand for inspection number 2. The court denies the motion with regard to requests for production 81 to 135 in request 12.

(8) The court denies all requests for sanctions.

3. The court denies the motion of Patriot and Celano to compel compliance with court order, for sanctions, and for issuance of an OSC regarding contempt in its entirety. The court denies all requests for monetary sanctions.

4. The court denies the motion of Blalock, Novak, and Orion for sanctions. The court denies all requests for monetary sanctions.

The court orders Jacob Blalock, Benjamin Novak, and Orion Precious Metals, Inc. to give notice of this order.

IT IS SO ORDERED.

DATED: February 8, 2022

Robert B. Broadbelt III

Judge of the Superior Court



Case Number: ****0702 Hearing Date: February 1, 2022 Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

JACOB BLALOCK , et al.;

Plaintiffs,

vs.

Halt gold group, llc , et al.,

Defendants.

[AND RELATED CROSS-ACTIONS]

Case No.:

****0702

Hearing Date:

February 1, 2022

Time:

10:00 a.m.

[Tentative] Order RE:

MOTIONS to quash business records subpoenas and motion to compel deposition of Person most knowledgeable.

MOVING PARTIES: Plaintiffs and Cross-Defendants Jacob Blalock, Benjamin Novak, and Cross-Defendant Orion Precious Metals, Inc.

RESPONDING PARTIES: Cross-Complainants Halt Gold Group LLC dba Patriot Gold Group LLC and Mike Celano

1. Cross-Defendants’ Motion to Quash the Business Records Subpoena Issued to Wholesale Direct Metals

The court considered the moving, opposition, and reply papers.

MOVING PARTIES: Plaintiffs and Cross-Defendants Jacob Blalock, Benjamin Novak, and Cross-Defendant Orion Precious Metals, Inc.

RESPONDING PARTIES: Cross-Complainants Halt Gold Group LLC dba Patriot Gold Group LLC and Mike Celano

  1. Cross-Defendants’ Motion to Quash the Business Records Subpoena Issued to Lear Capital, Inc.

    The court considered the moving, opposition, and reply papers.

MOVING PARTY: Defendant and cross-complainant Halt Gold Group LLC, dba Patriot Gold Group LLC

RESPONDING PARTY: Cross-defendant Orion Precious Metals, Inc., dba Orion Metal Exchange

    1. Cross-Complainant’s Motion to Compel Deposition of Person Most Qualified to Testify On Behalf of Cross-Defendant Orion Precious Metals, Inc. dba Orion Metal Exchange

      The court considered the moving, opposition, and reply papers.

Background

This hearing concerns three motions. First, Cross-Defendants Jacob Blalock (“Blalock”), Benjamin Novak (“Novak”), and Orion Precious Metals, Inc. (“Orion”), seek an order quashing the deposition subpoena of Cross-Complainants Halt Gold Group, LLC, dba Patriot Gold Group, LLC (“Patriot”) and Mike Celano (“Celano”) for production of business records directed to Wholesale Direct Metals, Inc. Cross-Defendants also request monetary sanctions against Cross-Complainants and their counsel of record. Cross-Complainants oppose the motion.

Second, the same Cross-Defendants seek an order quashing Cross-Complainants’ deposition subpoena for production of business records directed to Lear Capital, Inc. Cross-Defendants also request monetary sanctions against Cross-Complainants and their counsel of record. Cross-Complainants oppose the motion.

Third, Patriot seeks an order compelling Orion to produce the person most qualified to appear and testify on topics numbers 1 through 11 set forth in the fourth amended deposition notice. Patriot also requests monetary sanctions against Orion and its counsel of record. Orion opposes the motion.

LEGAL STANDARD

Code of Civil Procedure 1987.1 states, “[w]hen a subpoena requires the attendance of a witness or the production of books, documents or other things before a court, or at the trial of an issue therein, … upon motion reasonably made by the party, the witness, or any consumer described in Section 1985.3, or upon the court’s own motion after giving counsel notice and an opportunity to be heard, may make an order quashing the subpoena entirely, modifying it, or directing compliance with it upon such terms or conditions as the court shall declare, including protective orders.”

Code of Civil Procedure 1987.2(a) provides, as follows: “Except as specified in subdivision (c), in making an order pursuant to motion made under subdivision (c) of Section 1987 or under Section 1987.1, the court may in its discretion award the amount of the reasonable expenses incurred in making or opposing the motion, including reasonable attorney’s fees, if the court finds the motion was made or opposed in bad faith or without substantial justification or that one or more of the requirements of the subpoena was oppressive.”

Pursuant to Code of Civil Procedure 2025.450, if after service of a deposition notice, a party, without having served a valid objection, fails to appear for examination, or proceed with it, or to produce for inspection any document, the party giving notice may move for an order compelling the deponent’s attendance and testimony, and the production for inspection of any document. (Code Civ. Proc. 2025.450(a).)

If a motion to compel deposition 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(g)(1).)

DISCUSSION

1. Motion to Quash Deposition Subpoena Directed to Wholesale Direct Metals

The court rules as follows on the motion. The court denies the motion to quash as to requests numbers 2, 3, 4, 5, 16, 17, 18, and 19.

The court grants the motion to quash with as to requests numbers 1, 6, 7, 20, 21, and 22 because they are overbroad and seek production of information that is not relevant to the subject matter of this action or reasonably calculated to the discovery of admissible evidence.

The court grants the motion to quash as to requests numbers 8, 9, 10, 11, 12, 13, 14, and 15 because they seek production of information that is not relevant to the subject matter of this action or reasonably calculated to the discovery of admissible evidence

The court denies the request for sanctions by Blalock, Novak, and Orion on this motion because the court finds that the circumstances presented make the imposition of sanctions unjust in light of the mixed results of the rulings.

2. Motion to Quash Deposition Subpoena Directed to Lear Capital, Inc.

The court rules as follows on the motion. The court denies the motion to quash as to requests numbers 1, 2, 3, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, and 23.

The court grants the motion to quash as to requests numbers 4, 5, 25, and 26 because they request personnel records protected by the right to privacy.

The court grants the motion to quash as to requests numbers 6 and 24 because they are overbroad and seek production of information that is not relevant to the subject matter of this action or reasonably calculated to the discovery of admissible evidence.

The court denies the request for sanctions by Blalock, Novak, and Orion on this motion because the court finds that the circumstances presented make the imposition of sanctions unjust in light of the mixed result of the rulings.

3. Motion to Compel Deposition

In its fourth amended deposition notice, Patriot sought to depose the person most qualified to testify on behalf of Orion on 11 topics. The court finds that topic numbers 1, 2, 3, 6, 7, 8, 9, 10, and 11 set forth in the fourth amended deposition notice are identical to topic numbers 1, 3, 4, 5, 6, 7, 10, 11, 12 set forth in the third amended deposition notice. On December 8, 2020, the court denied Patriot’s motion to compel Orion to produce its person most qualified to testify on topics 1, 3, 4, 5, 6, 7, 10, 11, and 12 in the third amended deposition notice. The court finds no good cause to order further testimony on these topics because the court found that Patriot had not met its burden to show that Orion did not designate and produce at the March 2, 2020 deposition the person most qualified to testify on those topics. (December 8, 2020 order, page 8, lines 21 to 27.) The court therefore denies the motion to compel as to topic nos. 1, 2, 3, 6, 7, 8, 9, 10, and 11 in the fourth amended deposition notice.

Topic number 4 seeks testimony on “[a]ll Communications between Orion and any Person Pertaining to any Patriot Gold Customer, including but not limited to communications between Orion and Lear Capital . . . .” Topic number 5 seeks testimony on communications between Orion and any person regarding a separate lawsuit, Wholesale Direct Metals, Inc. v. Charley Chartoff, et al., LASC Case No. 20SMCV00627. The court finds good cause to allow Patriot to depose a person most knowledgeable on these topics in the fourth amended deposition notice to ensure Patriot has discovery into issues reasonably calculated to lead to the discovery of admissible evidence.

Therefore, the court grants the motion to compel the deposition of the person most knowledgeable as to topic numbers 4 and 5 only. The court denies the motion as to topic numbers 1, 2, 3, 6, 7, 8, 9, 10, and 11.

The court denies Patriot’s request for sanctions on this motion because the court finds that the circumstances presented make the imposition of sanctions unjust in light of the mixed results of the rulings.

ORDER

1. The court denies the motion of Blalock, Novak, and Orion to quash the subpoena directed to Wholesale Direct Metals as to requests numbers 1, 2, 3, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, and 23. The court grants the motion to quash as to requests numbers 4, 5, 6, 24, 25, and 26. The court denies the request for sanctions in this motion of Blalock, Novak, and Orion.

2. The court denies the motion of Blalock, Novak, and Orion to quash the subpoena directed to Lear Capital Inc. as to requests numbers 1, 2, 3, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, and 23. The court grants the motion to quash as to requests numbers 4, 5, 6, 24, 25, and 26. The court denies the request for sanctions in this motion of Blalock, Novak, and Orion.

3. The court grants Patriot’s motion to compel the deposition of the person most qualified on behalf of Orion as to topic numbers 4 and 5 only. The court denies the motion as to topic numbers 1, 2, 3, 6, 7, 8, 9, 10, and 11. The court orders Orion to produce its person(s) most qualified to testify on its behalf on topic number 4 and 5 in the fourth amended deposition notice on a date to be agreed upon by the parties within 30 days of the date of this order. The court denies Patriot’s request for sanctions on this motion.

The court orders Cross-Defendants Jacob Blalock, Benjamin Novak, and Orion Precious Metals, Inc. to give notice of this order.

IT IS SO ORDERED.

DATED: February 1, 2022

Robert B. Broadbelt III

Judge of the Superior Court



Case Number: ****0702    Hearing Date: December 08, 2020    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

jacob blalock , et al.;

Plaintiffs,

vs.

halt gold group, llc , et al.,

Defendants.

Case No.:

****0702 (consolidated w/ BC678811)

Hearing Date:

December 8, 2020

Time:

10:00 a.m.

[Tentative] Order RE:

(1) motion by cross-complainant halt gold group, llc dba patriot gold group llc to compel responses and for issue, evidentiary, monetary and terminating sanctions;

(2) Motion by Cross-Complainant Halt Gold Group, LLC dba Patriot Gold Group LLC to Compel Deposition of Person Most Qualified to Testify On Behalf of Cross-Defendant Orion Precious Metals, Inc. dba Orion Metal Exchange

AND RELATED CROSS-ACTION

MOVING PARTY: Defendants and cross-complainants Halt Gold Group LLC, dba Patriot Gold Group LLC

RESPONDING PARTIES: Plaintiffs and cross-defendants Jacob Blalock and Benjamin Novak, and cross-defendant Orion Precious Metals, Inc., dba Orion Metal Exchange

  1. Motion by Cross-Complainant Halt Gold Group, LLC dba Patriot Gold Group LLC to Compel Responses and For Issue, Evidentiary, Monetary and Terminating Sanctions

The court considered the moving, opposition, and reply papers.

MOVING PARTY: Defendants and cross-complainants Halt Gold Group LLC, dba Patriot Gold Group LLC

RESPONDING PARTIES: Plaintiffs and cross-defendants Jacob Blalock and Benjamin Novak, and cross-defendant Orion Precious Metals, Inc., dba Orion Metal Exchange

  1. Motion by Cross-Complainant Halt Gold Group, LLC dba Patriot Gold Group LLC to Compel Deposition of Person Most Qualified to Testify On Behalf of Cross-Defendant Orion Precious Metals, Inc. dba Orion Metal Exchange

The court considered the moving, opposition, and reply papers.

BACKGROUND

Plaintiffs Jacob Blalock (“Blalock”) and Benjamin Novak (“Novak”) filed this action on August 1, 2017, against defendants Halt Gold Group, LLC, dba Patriot Gold Group, LLC (“Patriot”), Mike Celano (“Celano”), Charley Chartoff, John “Jack” Hanney, and Alexander Orbison. Blalock and Novak filed the operative First Amended Complaint on November 29, 2017, asserting causes of action for, among other things, violations of the Fair Employment and Housing Act and intentional infliction of emotional distress.

On October 20, 2017, Patriot filed a Cross-Complaint in the FEHA Action against Blalock, Novak, and cross-defendant Orion Precious Metals, Inc. (“Orion”). On December 12, 2018, Patriot and Celano filed the operative Second Amended Cross-Complaint against Blalock, Novak, and Orion (collectively, “Cross-Defendants”), asserting causes of action for (1) misappropriation of trade secrets, (2) breach of contract, and (3) defamation.

MOTION BY CROSS-COMPLAINANT HALT GOLD GROUP, LLC DBA PATRIOT GOLD GROUP LLC TO COMPEL RESPONSES AND FOR ISSUE, EVIDENTIARY, MONETARY AND TERMINATING SANCTIONS

  1. Background

On January 18, 2019, Patriot (1) electronically served on Orion its Requests for Production of Documents, Set One and Special Interrogatories, Set One, and (2) electrically served on Novak its Form Interrogatories, Set Two. (Nemecek Decl., filed February 21, 2020, ¶ 2.)

On January 22, 2019, Patriot electronically served on Blalock and Novak its Requests for Production of Documents, Set Two, and Special Interrogatories, Set Three. (Id. at ¶ 4.)

On August 7, 2019, Patriot electronically served on Orion its Form Interrogatories, Set One. (Id. at ¶ 9.) On October 6, 2019, Orion served its responses to Patriot’s Form Interrogatories, Set One, but Orion’s responses were not verified. (Id. at ¶ 14.)

As of February 21, 2020, Cross-Defendants have not served any responses to the discovery request at issue, except for Orion’s unverified responses to Patriot’s Form Interrogatories, Set One. (Id. at ¶ 24.)

Patriot now moves for orders compelling (1) Novak to serve responses to Patriot’s Form Interrogatories, Set Two, and Special Interrogatories, Set Three, and to serve responses and produce documents responsive to Patriot’s Requests for Production of Documents, Set Two; (2) Blalock to serve responses to Patriot’s Special Interrogatories, Set Three, and Form Interrogatories, Set One, and to serve responses and produce documents responsive to Patriot’s Requests for Production of Documents, Set Two; and (3) Orion to serve responses to Patriot’s Special Interrogatories, Set One, and Form Interrogatories, Set One, and to serve responses and produce documents responsive to Patriot’s Requests for Production of Documents, Set One. Patriot also moves for an order imposing terminating, issue, or evidentiary sanctions, as well as monetary sanctions against Cross-Defendants. Cross-Defendants oppose the motion.

  1. Request for Judicial Notice

The court grants Patriot’s request for judicial notice, filed March 9, 2020, as to Exhibit A.

  1. Discussion

If a party to whom interrogatories or an inspection demand are directed fails to serve a timely response, the propounding party may move for an order compelling responses without objections. (Code Civ. Proc., ;; 2030.290, subd. (b); 2031.300, subd. (b).) Where a motion seeks only a response to an inspection demand, no showing of “good cause” is required. (Compare Code Civ. Proc., ; 2031.300(b) with Code Civ. Proc., ; 2031.310, subd. (b)(1).)

As an initial matter, the court notes that Patriot, in its Notice of Motion, filed February 21, 2020, moves to compel Blalock to serve responses to Patriot’s Form Interrogatories, Set One. However, Patriot has not presented any evidence or argument to show that it served on Blalock its Form Interrogatories, Set One, and that Blalock failed to serve his responses to Patriot’s Form Interrogatories, Set One. The court therefore denies Patriot’s motion to compel Blalock to serve responses to Patriot’s Form Interrogatories, Set One.[1]

In their opposition, Cross-Defendants contend that each of the discovery requests at issue were not properly served and that Cross-Defendants were therefore under no obligation to respond. Cross-Defendants state that there was and is no agreement between the parties for electronic service as required by Code of Civil Procedure section 1010.6. Counsel for Cross-Defendants, Adam Zaffos, states in his declaration filed in support of Cross-Defendants’ opposition that there is not a written agreement between the parties for electronic service. (Zaffos Decl., filed March 3, 2020, ¶ 2.) Zaffos acknowledges that his firm uses an electronic service provider to transmit filings with the court due to the electronic filing requirements of the court, and he further states that service of documents is still completed by an authorized method, and that any electronic copies that Patriot or Cross-Defendants may receive are merely a courtesy and are not reflective of any agreement for accepting electronic service. (Ibid.) Zaffos also states that Cross-Defendants have made attempts to informally resolve these discovery disputes, including offering to provide responses to a narrowed set of discovery, even though proper service had never been made. (Id. at ¶ 13.)

In reply, Patriot contends that Cross-Defendants have consented to accept electronic service of documents by electronically filing documents with the court. Patriot relies on California Rules of Court, rule 2.251(b)[2], which, at the time Patriot served its discovery requests, provided, in relevant part:

  1. Electronic service may be established by consent. A party or other person indicates that the party or other person agrees to accept electronic service by:

. . .

(B) Electronically filing any document with the court. The act of electronic filing is evidence that the party or other person agrees to accept service at the electronic service address the party or other person has furnished to the court under rule 2.256(a)(4). . . . .

(California Rules of Court, rule 2.251(b)(1)(B).) Rule 2.256(a)(4) provides that each electronic filer must “[f]urnish one or more electronic service addresses, in the manner specified by the court. This only applies when the electronic filer has consented to or is required to accept electronic service.”

Here, Cross-Defendants have not consented to and were not required to accept electronic service in this action. Cross-Defendants were not required to furnish one or more electronic service addresses to the court pursuant to rule 2.256(a)(4), and have not agreed to accept service at any electronic service address furnished to the court under rule 2.256(a)(4). For cases filed on or before December 31, 2018, electronic service of documents, including discovery requests, is not authorized “unless a party or other person has agreed to accept electronic service in that specific action or the court has ordered electronic service on a represented party . . . .” (Code Civ. Proc., ; 1010.6, subd. (2)(A)(i).) Therefore, Patriot did not serve the discovery responses at issue by an authorized or agreed upon method, and the court denies Patriot’s motion to compel Cross-Defendants’ responses to the discovery requests.

If a party engages in the misuse of the discovery process, the court may impose monetary, issue, evidence, or terminating sanctions. (Code Civ. Proc., ; 2023.030.) Code of Civil Procedure section 2023.010 provides, in relevant part, that “[m]isuses of the discovery process include, but are not limited to, the following: . . . . (d) Failing to respond or to submit to an authorized method of discovery. . . . . (g) Disobeying a court order to provide discovery.” The court finds that Cross-Defendants have not engaged in conduct that is a misuse of the discovery process. The court denies Patriot’s request for terminating, issue, or evidentiary sanctions. (Code Civ. Proc., ; 2023.030.)

In their opposition, Cross-Defendants request monetary sanctions against Patriot and its counsel in the total amount of $4,250. The court “shall” impose a monetary sanction against any party who unsuccessfully makes or opposes a motion to compel a response to interrogatories or a motion to compel a response to a demand for inspection, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of sanctions unjust. (Code Civ. Proc., ;; 2030.290, subd. (c), 2031.300, subd. (c).) The court finds that Patriot did not act with substantial justification and that no other circumstances make the imposition of sanctions unjust. The court finds that a total of $4,250 (10 hours x $425 per hour for Adam Zaffos) is a reasonable amount of sanctions to impose against Patriot on its motion to compel responses.

MOTION BY CROSS-COMPLAINANT HALT GOLD GROUP, LLC DBA PATRIOT GOLD GROUP LLC TO COMPEL DEPOSITION OF PERSON MOST QUALIFIED TO TESTIFY ON BEHALF OF CROSS-DEFENDANT ORION PRECIOUS METALS, INC. DBA ORION METAL EXCHANGE

  1. Background

On August 7, 2019, Patriot served a notice of deposition directed to Orion for personal appearance and production of documents at the deposition of Orion’s person(s) most qualified on September 9, 2019. (Nemecek Decl., filed May 11, 2020, ¶ 2.) On September 9, 2019, Blalock appeared for and testified on behalf of Orion, and Orion produced some documents responsive to the August 7, 2019 deposition notice. (Id. at ¶¶ 3-4.)

On January 24, 2020, Patriot served a second amended notice of deposition directed to Orion for personal appearance and production of documents at the deposition of Orion’s person(s) most qualified on February 28, 2020. (Id. at ¶ 5.) Due to scheduling conflicts, the parties agreed to reschedule the continued deposition of Orion’s person(s) most qualified to March 2, 2020. (Id. at ¶ 6.) On February 18, 2020, Patriot served a third amended notice of deposition directed to Orion for personal appearance and production of documents at the deposition of Orion’s person(s) most qualified on March 2, 2020 (the “Third Amended Deposition Notice”).

On March 2, 2020, Blalock and Novak each appeared for and testified on behalf of Orion, and Orion did not produce any documents responsive to the Third Amended Deposition Notice. (Id. at ¶¶ 7-8.)

Patriot now moves for an order compelling Orion (1) to appear for deposition and testify on topic nos. 1, 3, 4, 5, 6, 7, 10, 11, and 12 set forth in the Third Amended Deposition Notice, (2) to appear for deposition for questions it refused to answer at the March 2, 2020 deposition, and (3) to produce documents responsive to document requests nos. 2, 3, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 17, 27, 28, and 32 set forth in the Third Amended Deposition Notice. Patriot also requests monetary sanctions against Orion and its counsel of record. Cross-Defendants oppose the motion.

  1. Discussion

“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, subd. (a).) The motion “shall be made no later than 60 days after the completion of the record of the deposition, and shall be accompanied by a meet and confer declaration under Section 2016.040.” (Code Civ. Proc., ; 2025.480, subd. (b).)

Patriot contends that, at the March 2, 2020 deposition, Blalock and Novak were not competent to testify on Orion’s behalf, the deponents provided evasive responses or refused to answer several questions, and that Orion failed to produce any document responsive to the Third Amended Deposition Notice.

In opposition, Cross-Defendants first contend that Patriot’s motion is procedurally defective under Code of Civil Procedure section 2025.480, subdivision (b), because Patriot filed its motion later than 60 days after the completion of the record of the March 2, 2020 deposition and Patriot failed to meet and confer before filing its motion. The transcripts of the March 2, 2020 deposition were completed by the court reporter on March 5, 2020, and the stipulated deadline for the witnesses to make corrections to their testimony was March 12, 2020. (Nemecek Decl., filed May 11, 2020, Exs. E and F; Nemecek Supp. Decl., filed September 16, 2020, ¶ 2.) Therefore, the date of the completion of the record of the March 2, 2020 was March 12, 2020. Patriot filed its motion on May 11, 2020, i.e., 60 days after March 12, 2020. The court finds that Patriot’s motion is timely under Code of Civil Procedure section 2025.480, subdivision (b). The court also finds that Patriot has substantially complied with the meet and confer requirements of subdivision (b). (Nemecek Decl., filed May 11, 2020, ¶ 17, Ex. K.)

Cross-Defendants next contend that Orion produced the only two individuals with knowledge of the topics set forth in the Third Amended Deposition Notice, that Orion was justified in refusing to answer questions pertaining to certain topics, that Patriot failed to show good cause justifying production of documents responsive to the Third Amended Deposition Notice, and that Orion’s objections served in response to the Third Amended Deposition Notice are with merit.

After considering the evidence and arguments presented by both parties, the court finds that Patriot has not met its burden of show that Orion did not designate and produce at the March 2, 2020 deposition those of its officers, directors, managing agents, employees, or agents who are most qualified to testify on its behalf as to topics nos. 1, 3, 4, 5, 6, 7, 10, 11, and 12 to the extent any information known or reasonably available to the deponent. (Code Civ. Proc., ; 2025.230.) The court therefore denies Patriot’s motion to compel Orion to produce its persons most qualified to testify on those topics.

After considering the deposition questions set forth in Patriot’s Separate Statement and the arguments presented by both parties, the court rules on Patriot’s motion to compel Orion’s answers to the questions asked at the March 2, 2020 deposition as follows:

After considering the document requests set forth in Patriot’s Separate Statement and the arguments presented by both parties, the court rules on Patriot’s motion to compel Orion to produce documents responsive to the document requests set forth in Patriot’s Third Amended Deposition Notice as follows

Patriot seeks monetary sanctions against Orion and its counsel. “The court shall impose a monetary sanction under Chapter 7 . . . against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel an answer or production, 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., ; 2025.480, subd. (j).) The court denies Patriot’s request for monetary sanctions because the court finds that Patriot obtained mixed results on its motion to compel deposition and production of documents and the circumstances presented make the imposition of sanctions unjust. The court also denies Cross-Defendants’ request for monetary sanctions against Patriot for the same reasons.

ORDER

For the reasons set forth above, the court orders as follows.

The court denies Patriot’s motion to compel (1) Novak to serve responses to Patriot’s Form Interrogatories, Set Two, and Special Interrogatories, Set Three, and to serve responses and produce documents responsive to Patriot’s Requests for Production of Documents, Set Two; (2) Blalock to serve responses to Patriot’s Special Interrogatories, Set Three, and Form Interrogatories, Set One, and to serve responses and produce documents responsive to Patriot’s Requests for Production of Documents, Set Two; and (3) Orion to serve responses to Patriot’s Special Interrogatories, Set One, and Form Interrogatories, Set One, and to serve responses and produce documents responsive to Patriot’s Requests for Production of Documents, Set One.

The court denies Patriot’s request for issue, evidentiary, terminating, and monetary sanctions made in connection with Patriot’s motion to compel responses to its Form Interrogatories, Special Interrogatories, and Requests for Production of Documents.

The court grants Cross-Defendants’ request for monetary sanctions against Patriot made in connection with Patriot’s motion to compel responses to its Form Interrogatories, Special Interrogatories, and Requests for Production of Documents. As discussed above, the court orders that Patriot shall pay monetary sanctions in the amount of $4,250 to Cross-Defendants within 30 days of the date of service of this order.

The court grants in part, and denies in part, Patriot’s motion for an order compelling Orion (1) to appear for deposition and testify on topic nos. 1, 3, 4, 5, 6, 7, 10, 11, and 12 set forth in Patriot’s February 18, 2020 Third Amended Deposition Notice, (2) to appear for deposition for questions it refused to answer at the March 2, 2020 deposition, and (3) to produce documents responsive to document requests nos. 2, 3, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 17, 27, 28, and 32 set forth in Patriot’s February 18, 2020 Third Amended Deposition Notice, as follows.

The court denies Patriot’s motion to compel Orion to designate and produce at deposition the persons most qualified to testify on its behalf as to topic nos. 1, 3, 4, 5, 6, 7, 10, 11, and 12 set forth in the February 18, 2020 Third Amended Deposition Notice.

Pursuant to Code of Civil Procedure section 2025.480, subdivision (a), the court orders Orion to designate and produce at deposition the persons most qualified to testify on its behalf, and to answer the following questions set forth in Patriot’s Separate Statement in support of its motion to compel deposition:

The court orders Patriot to produce all documents responsive to the following document requests set forth in Patriot’s February 18, 2020 Third Amended Deposition Notice within 30 days of the date of service of this order:

The court denies Patriot and Cross-Defendants’ requests for monetary sanctions made in connection with Patriot’s motion to compel deposition and production of documents.

The court orders Cross-Defendants to give notice of this order.

IT IS SO ORDERED.

DATED: December 8, 2020

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court


[1] In its motion, Patriot contends that Blalock has not served any responses to Patriot’s Form Interrogatories, Set Three. (Patriot’s Memorandum of Points & Authorities, filed February 21, 2020, p. 10:8-9.) However, Patriot does not state in its notice of motion that it moves to compel Blalock’s responses to Patriot’s Form Interrogatories, Set Three.

[2] Rule 2.251 was subsequently amended on January 1, 2020.



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