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This case was last updated from Los Angeles County Superior Courts on 07/27/2019 at 01:29:50 (UTC).

LUCKY'S TWO-WAY RADIOS, INC. ET AL VS FRANK J. CANNATA

Case Summary

On 02/13/2018 LUCKY'S TWO-WAY RADIOS, INC filed a Contract - Other Contract lawsuit against FRANK J CANNATA. This case was filed in Los Angeles County Superior Courts, Van Nuys Courthouse East located in Los Angeles, California. The Judges overseeing this case are PAUL A. BACIGALUPO and VIRGINIA KEENY. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****6864

  • Filing Date:

    02/13/2018

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Van Nuys Courthouse East

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

PAUL A. BACIGALUPO

VIRGINIA KEENY

 

Party Details

Plaintiffs and Cross Defendants

BUDDY CORPORATION

LUCKY'S TWO-WAY RADIOS INC.

Defendants and Cross Plaintiffs

DOES 1 TO 50

CANNATA FRANK J.

Attorney/Law Firm Details

Plaintiff and Cross Defendant Attorney

BRADLEY BARRY ALAN

Defendant Attorney

MOLNAR CHRISTIAN STEPHEN

Cross Plaintiff Attorney

LESCHES LEVI

 

Court Documents

Minute Order

3/15/2018: Minute Order

Legacy Document

3/29/2018: Legacy Document

Minute Order

6/21/2018: Minute Order

Notice

7/23/2018: Notice

Notice of Motion

8/9/2018: Notice of Motion

Notice of Motion

8/29/2018: Notice of Motion

Notice of Motion

8/29/2018: Notice of Motion

Objection

10/19/2018: Objection

Order

12/17/2018: Order

Motion for Leave to File a Cross-Complaint

1/23/2019: Motion for Leave to File a Cross-Complaint

Ex Parte Application

3/15/2019: Ex Parte Application

Cross-Complaint

4/10/2019: Cross-Complaint

Declaration

4/24/2019: Declaration

Stipulation and Order

5/23/2019: Stipulation and Order

Notice of Posting of Jury Fees

7/9/2019: Notice of Posting of Jury Fees

Reply

7/15/2019: Reply

Reply

7/15/2019: Reply

Order Appointing Court Approved Reporter as Official Reporter Pro Tempore

7/22/2019: Order Appointing Court Approved Reporter as Official Reporter Pro Tempore

120 More Documents Available

 

Docket Entries

  • 07/22/2019
  • at 08:30 AM in Department W, Virginia Keeny, Presiding; Trial Setting Conference - Not Held - Taken Off Calendar by Court

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  • 07/22/2019
  • at 08:30 AM in Department W, Virginia Keeny, Presiding; Ex-Parte Proceedings (to Enter Substitution) - Held - Motion Granted

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  • 07/22/2019
  • at 08:30 AM in Department W, Virginia Keeny, Presiding; Hearing on Demurrer - with Motion to Strike (CCP 430.10) - Held

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  • 07/22/2019
  • Minute Order ( (Hearing on Demurrer - with Motion to Strike (CCP 430.10); Tri...)); Filed by Clerk

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  • 07/22/2019
  • Order Appointing Court Approved Reporter as Official Reporter Pro Tempore (Josslyn Gordon CSR#10284); Filed by Lucky's Two-Way Radios Inc. (Plaintiff); Buddy Corporation (Plaintiff)

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  • 07/19/2019
  • at 08:30 AM in Department W, Virginia Keeny, Presiding; Hearing on Motion for Order (Requiring Bond Pursuant to Section 1030 of the Code of Civil Procedure)

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  • 07/18/2019
  • at 08:30 AM in Department W, Virginia Keeny, Presiding; Hearing on Motion for Summary Adjudication - Not Held - Rescheduled by Party

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  • 07/18/2019
  • at 08:30 AM in Department W, Virginia Keeny, Presiding; Hearing on Motion for Preliminary Injunction - Not Held - Rescheduled by Party

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  • 07/17/2019
  • Ex Parte Application (to Enter Substitution); Filed by Lucky's Two-Way Radios Inc. (Plaintiff)

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  • 07/15/2019
  • Reply (to Opposition to Defendants' Motion to Strike); Filed by Lucky's Two-Way Radios Inc. (Plaintiff)

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186 More Docket Entries
  • 03/15/2018
  • Declaration; Filed by Lucky's Two-Way Radios Inc. (Plaintiff); Buddy Corporation (Plaintiff)

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  • 03/15/2018
  • Ex-Parte Application; Filed by Lucky's Two-Way Radios Inc. (Plaintiff); Buddy Corporation (Plaintiff)

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  • 03/15/2018
  • Order; Filed by Lucky's Two-Way Radios Inc. (Plaintiff); Buddy Corporation (Plaintiff)

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  • 03/06/2018
  • Proof of Service of Summons and Complaint; Filed by Lucky's Two-Way Radios Inc. (Plaintiff)

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  • 02/21/2018
  • First Amended Complaint; Filed by Lucky's Two-Way Radios Inc. (Plaintiff); Buddy Corporation (Plaintiff)

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  • 02/21/2018
  • Proof of Service of Summons and Complaint; Filed by Lucky's Two-Way Radios Inc. (Plaintiff); Buddy Corporation (Plaintiff)

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  • 02/13/2018
  • Notice of Case Management Conference; Filed by Clerk

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  • 02/13/2018
  • Complaint; Filed by Lucky's Two-Way Radios Inc. (Plaintiff); Buddy Corporation (Plaintiff)

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  • 02/13/2018
  • Civil Case Cover Sheet; Filed by Lucky's Two-Way Radios Inc. (Plaintiff); Buddy Corporation (Plaintiff)

    Read MoreRead Less
  • 02/13/2018
  • Summons; Filed by Lucky's Two-Way Radios Inc. (Plaintiff); Buddy Corporation (Plaintiff)

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Tentative Rulings

Case Number: LC106864    Hearing Date: February 01, 2021    Dept: W

lucky’s two-way radios, inc. et al., v. cannata

defendant’s demurrer to the second amended complaint

Date of Hearing: February 1, 2021 Trial Date: None set.

Department: W Case No.: LC106864

Meet and Confer: Yes. (RJN, Exh. H.)

BACKGROUND

Plaintiffs Lucky’s Two-Way Radios, Inc. and Buddy Corporation (“LTWR”) allege that Frank J. Cannata (“Cannata”) was a consultant for Plaintiffs’ business pursuant to a consulting services agreement. It is alleged that while consulting for Plaintiffs, Cannata allowed or arranged for valuable company property to be taken by “Mr. Recycling” without Plaintiffs’ consent. Plaintiff further claims that on December 8, 2017, Cannata improperly transferred proprietary information via e-mail to personal accounts. Plaintiff alleges a loss of $500,000 in property.

Plaintiffs filed a complaint on February 13, 2018. The Second Amended Complaint (“SAC”) was filed on August 7, 2020, alleging: (1) Breach of Contract; (2) Conversion; (3) Breach of Fiduciary Duty; (4) Fraud and Fraudulent Concealment; (5) Specific Performance; and (6) Permanent Injunction

On March 29, 2019, the court granted Cannata’s motion for leave to file a cross-complaint. Cannata filed the first amended cross-complaint against Plaintiffs Lucky’s Two-Way Radios, Inc. and Buddy Corporation on April 10, 2019.

Cannata filed a second amended cross-complaint (“SAXC”) on August 2, 2019. The SAXC against Cross-Defendants alleges several causes of action including breach of contract, indemnity, labor code retaliation and wage and hour violations, false pretenses, fraud, battery, stored communications violations, trespass, and unfair competition.

On October 13, 2020, default was entered against Defendant because he failed to file an answer to the SAC. Default was set aside and vacated on December 17, 2020.

Defendant now demurs to the SAC.

[Tentative] Ruling

Defendants demurrer to the second amended complaint as to the first, second, fifth, and sixth causes of action is sustained with leave to amend;

Defendant’s demurrer to the second amended complaint as to the third and fourth causes of action is overruled.

request for judicial notice

Defendant requests this court take judicial notice of several documents filed with the court and Minute Order by the court.

The court grants Defendant’s request for judicial notice. (Evid. Code §452(d).)

EVIDENTIARY OBJECTION

Plaintiff objects to Exhibit A attached to Lesches’ declaration as well as portions of Lesches’ declaration. The court sustains the objection to Exhibit A as well as Objection Nos. 1, 2 and 3.

discussion

Defendant demurs to all the causes of action in the second amended complaint on the grounds Plaintiff fails to allege the contract type or contract terms; lack of standing; uncertainty; failure to state facts sufficient to constitute a cause of action; and failure to allege fraud with the requisite specificity.

In opposition, Plaintiff’s central argument is Cannata waived all objections to the SAC, other than those based on insufficient facts to support a cause of action, when Cannata did not demur to the first amended complaint. Plaintiff contends, as a result, Cannata has waived any right to demur to Plaintiffs’ SAC on grounds such as: Plaintiffs lack capacity to sue; nonjoinder or misjoinder of parties; uncertainty; and failure to allege whether contract sued upon is written or oral or implied by conduct. Plaintiff also argues they have sufficiently alleged causes of action for breach of contract.

Waiver

Plaintiff argues Defendant Cannata waived any objections to the SAC when he did not demur to the first amended complaint. Plaintiff contends Cannata did not demur to Plaintiffs’ FAC and the causes of action alleged in the SAC are the same as those alleged in the FAC. Only the general facts were modified in an attempt to better differentiate Cannata’s role. As a result, to the extent that Cannata’s demurrer relates to capacity to sue, uncertainty or the type of contract alleged, plaintiff argues he waived all such objections when he answered the FAC.

In reply, Defendant argues he did not waive special demurrers. Defendant cites to Carlton v. Dr. Pepper Snapple Group, Inc. (2014) 228 Cal.App.4th 1200 to support his contention. In Carlton, the appellate court affirmed a judgment of dismissal sustaining a special demurrer to the SAC after the trial court had overruled demurrer to the same Cause of Action in the FAC. (Id. at p. 1211.) “When Carlton filed the SAC, he exposed himself to the possibility of a demurrer being filed and sustained to the entire SAC.” (Id.) Defendant Cannata also argues Plaintiffs’ waiver contention is barred by judicial estoppel.

The court finds Defendant has not waived all his objections to the SAC. “If the party against whom a complaint or cross-complaint has been filed fails to object to the pleading, either by demurrer or answer, that party is deemed to have waived the objection unless it is an objection that the court has no jurisdiction of the subject of the cause of action alleged in the pleading or an objection that the pleading does not state facts sufficient to constitute a cause of action.” (CCP §430.80.) Here, Defendant’s demurrer is primarily based on standing and failure to state facts sufficient to constitute a cause of action.

A defendant may object to a complaint by demurrer on the ground that “[t]he person who filed the pleading does not have the legal capacity to sue.” (CCP § 430.10(b).) “‘There is a difference between the¿capacity¿to sue, which is the right to come into court, and the¿standing¿to sue, which is the right to relief in court.’ (Citation.) ‘Incapacity is merely a legal disability, such as infancy or insanity, which deprives a party of the right to come into court. The right to relief, on the other hand, goes to the existence of a cause of action. It is not a plea in abatement, as is lack of capacity to sue.’” (Color-Vue, Inc. v. Abrams (1996) 44 Cal.App.4th 1599, 1604 [emphasis in original].) No such argument regarding lack of capacity is raised, and so Defendant’s demurrer on standing is not waived.

As for Defendant Cannata’s demurrer on the grounds of uncertainty or failure to allege whether the contract sued upon is written, oral, or implied by conduct, the court find Defendant has not waived those objections. First, the court does not understand Plaintiff's position regarding waiver at all. In Plaintiff’s motion for leave to amend, Plaintiff stated that Defendants could demur to the SAC if they wanted to. (RJN, Exh. D.) Now, they say the opposite. This does not evidence any good faith on Plaintiff's part and instead demonstrates a willingness to take inconsistent positions in order to suit their needs. Moreover, such a contention is barred by judicial estoppel. (See Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171, 181 holding judicial estoppel prevents a party from asserting a position in a legal proceeding that is contrary to a position previously taken in the same or some earlier proceeding.)

First Cause of Action – Breach of Contract

Defendant demurs to the first cause of action on the grounds the cause of action fails to allege whether the “consulting contract” was written, oral, or implied; fails to allege the terms of the Contract, how the Contract was supposedly breached, or who the Parties to the Contract were; Plaintiff lacks standing; and uncertainty.

The problem with plaintiff’s current complaint is that it really alleges two contracts: one is a written NDA which is attached to the complaint. To the extent the breach of contract action is based on an alleged breach of the NDA, it is not uncertain and it is properly plead.

The problem arises with the other alleged contractual agreement which is described, in toto, in paragraph 6 of the new complaint: “On or about April 4, 2017, the Organization hired Defendant to provide consulting services as an independent contractor. Under the terms of the engagement, Cannata would supply general consulting for overall company operations in exchange for a consulting fee of about $160,000.00 a year, pursuant to weekly invoices from CANNATA, in addition to being provided with moving expenses, a vehicle, an office and housing.” This contract is not in writing and its terms are not fully set forth; it is fatally uncertain as it is unclear what the “Organization” is, or how it relates to the two named plaintiffs.

As discussed above, Defendant did not waive their standing argument. Defendant argues the first cause of action fails to allege whether/how Buddy or LTWR have standing to sue for the supposed breach of Cannata’s supposed contract with “the Organization.” Defendant contends that the only allegation giving Buddy or LTWR standing -- “Plaintiffs and Defendant Cannata had a contractual relationship by virtue of the consulting agreement for consulting services for general operations for Plaintiffs” -- is too vague and uncertain. ( SAC ¶ 25.) Because Plaintiffs have not sufficiently alleged whether they were party to the consulting agreement, whether they were third party beneficiaries and the actual terms of the agreement, the court sustains the demurrer to the first cause of action with leave to amend. To the extent the first cause of action is based on an alleged breach of the NDA, it has been adequately plead.

Second Cause of Action – Conversion

Defendant demurs to the second cause of action on the grounds Plaintiffs lack standing; uncertainty; and Plaintiffs fail to state facts sufficient to constitute a cause of action.

Defendant first argues the second cause of action fails to allege whether/how Buddy or LTWR have standing to sue for the supposed loss of “company property.” Specifically, the SAC merely alleges that Buddy maintains “custody of a significant amount of telecommunications and radio equipment,” (SAC ¶ 2), but “custody” is neither possession nor ownership, and, more importantly, it is not alleged that the missing equipment is the equipment over which Buddy maintains “custody.” (See SAC ¶¶ 10, 12, 14, 15, and 27.)

Plaintiff also has not alleged LTWR’s interest in the alleged converted property. The court also agrees it is unclear what allegations are by LTWR regarding conversion, if any.

Accordingly, Defendant’s demurrer to the second cause of action is sustained with leave to amend.

Third Cause of Action – Breach of Fiduciary Duty

 

Defendant demurs to the third cause of action on the grounds Plaintiffs lack standing; Plaintiffs fail to allege sufficient facts to support a cause of action for breach of fiduciary duty; and uncertainty.

First, Defendant argues the third cause of action fails to allege whether/how Buddy or LTWR have standing to sue for supposed breaches of fiduciary duty. It is not alleged how Cannata’s supposed contract with “the Organization” gave rise to a fiduciary duty to Plaintiffs.

However, the court finds, when reading the SAC as a whole, the SAC contains sufficient facts that establish that Defendant Cannata performed services for Plaintiffs, that when he was performing services for Plaintiffs, he owed them a fiduciary duty to perform them honestly and in their best interests.

Defendant also argues the third cause of action fails to allege that Cannata owned a fiduciary duty arising from a Consulting Contract. Defendant contends “[t]raditional examples of fiduciary relationships in the commercial context include trustee/beneficiary, directors and majority shareholders of a corporation, business partners, joint adventurers, and agent/principal.” (Wolf v. Superior Court (2003) 107 Cal.App.4th 25, 30.) “Inherent in each of these relationships is the duty of undivided loyalty the fiduciary owes to its beneficiary, imposing on the fiduciary obligations far more stringent than those required of ordinary contractors.” (Id.; see also Cleveland v. Johnson (2012) 209 Cal.App.4th 1315, 1343.)

While Wolf provides traditional examples of fiduciary relationships, it is not an exclusive list. Plaintiffs have alleged the parties’ fiduciary relationship. An employee, business partner, joint adventurer may owe different fiduciary duties than an independent contractor, but that does not mean an independent contractor does not owe any fiduciary duties. “‘[B]efore a person can be charged with a fiduciary obligation, he must either knowingly undertake to act on behalf and for the benefit of another, or must enter into a relationship which imposes that undertaking as a matter of law.’” (Hasso v. Hapke (2014) 227 Cal.App.4th 107, 140 (quoting Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 221).) “A fiduciary duty under common law may arise ‘when one person enters into a confidential relationship with another.’” (Id.

Lastly, Defendant argues the SAC fails to allege what claims are alleged by Buddy for breach of fiduciary duty and what claims are alleged by LTWR for breach of fiduciary Duty. Defendant contends there is an extensive record in this action that Plaintiffs do not respond to discovery; accordingly, the amendment should not be allowed based on a presumption that discovery will ascertain the issues. Furthermore, the case has been pending for three years.

However, demurrers for uncertainty are disfavored and should only be sustained where the complaint is so uncertain that the demurring defendant cannot reasonably respond thereto (see, e.g., Khoury v. Maly's of Calif., Inc. (1993) 14 Cal.App.4th 612, 616) and here, Plaintiff’s SAC is not so uncertain that Defendant cannot reasonably respond thereto. Moreover, demurrer for sufficiency tests whether the complaint states a cause of action¿¿(Hahn v. Mirda¿(2007) 147 Cal.App.4th 740, 747), not the cooperation of the parties’ willingness to respond to discovery.

Accordingly, Defendant’s demurrer to the third cause of action is overruled.

 

Fourth Cause of Action – Fraud and Fraudulent Concealment

 

Defendant demurs to the fourth cause of action on the grounds the cause of action is not alleged with the requisite specificity and is uncertain.

Defendant argues the fourth cause of action fails to allege what frauds/representations are alleged by Buddy and what frauds/representations are alleged by LTWR. Defendants again argue there is an extensive record in this action that Plaintiffs do not respond to discovery; accordingly, the amendment should not be allowed based on a presumption that discovery will ascertain the issues.

In opposition, Plaintiff argues Plaintiffs’ fraud cause of action is primarily based on a fraudulent concealment perpetrated by Mr. Cannata alleged in Paragraphs 41-42. Plaintiffs also argue Paragraphs 10 and 13 through 21 of the SAC satisfy the heightened specificity requirement for pleading fraud and fraud related causes of action.

The court finds Plaintiffs’ allegations of fraud are pleaded with the requisite specificity. Plaintiff alleges on or about December 8, 2017, Cannata intentionally forwarded sensitive company documents he originally obtained in July 2017. (SAC ¶20.) Plaintiff further alleges Defendant concealed and misrepresented this fact. (SAC ¶41.) Plaintiff alleges Defendant concealed this fact to the detriment of Plaintiffs (Buddy and LTWR) because Defendant now has the capacity to illegally sabotage or cause damage to the companies communication sites which could affect millions of people’s internet and telephone communications throughout California. (SAC ¶21.) While plaintiffs do not spell out the allegations as to reliance, the court finds the overall allegations sufficient to state a claim for fraud. It is implicit that if an employee steals his employer’s property (physical or intellectual) by means of deception, detrimental reliance occurred when the employer relied on the deception in the first instance, and failed to prevent the theft.

Next, Defendant argues the SAC fails to allege what claims are alleged by Buddy for fraud and what claims are alleged by LTWR. However, as discussed above, demurrers for uncertainty are disfavored and should only be sustained where the complaint is so uncertain that the demurring defendant cannot reasonably respond thereto (see, e.g., Khoury v. Maly's of Calif., Inc. (1993) 14 Cal.App.4th 612, 616) and here, Plaintiff’s SAC is not so uncertain that Defendant cannot reasonably respond thereto. Moreover, demurrer for sufficiency tests whether the complaint states a cause of action¿¿(Hahn v. Mirda¿(2007) 147 Cal.App.4th 740, 747), not the cooperation of the parties’ willingness to respond to discovery.

Accordingly, the court overrules the demurrer to the fourth cause of action.

 

Fifth/Sixth Causes of Action – Specific Performance/Permanent Injunction

 

Defendant demurs to the fifth and sixth causes of action on the grounds it is well established that Permanent Injunctions are remedies and not causes of action. (Ivanoff v.

Bank of America, N.A. (2017) 9 Cal.App.5th 719, 734 [“Injunctive relief is a remedy, not a cause of action”].) Similarly, specific performance requires pleading specific

elements, which are not alleged in the SAC.

Specifically, Defendant argues the two remedies are not a cause of action and specific performance requires Plaintiff to plead: (1) sufficiently definite contract terms; (2) adequate consideration; (3) substantial similarity of the requested performance to the contractual terms; (4) mutuality of remedies; and (5) inadequacy of legal remedies. (See Union Oil Co. of Cal. v. Greka Energy Corp. (2008) 165 Cal. App. 4th 129, 134.)

However, a cause of action for permanent injunction may stand if Plaintiff’s other causes of action may be maintained. “A permanent injunction is merely a remedy for a proven cause of action. It may not be issued if the underlying cause of action is not established.” (Art Movers v. Ni West (1992) 3 Cal.App.4th 640, 646.) As a result, it may be issued if the underlying cause of action is not established. (Ivanoff v. Bank of America, N.A. (2017) 9 Cal.App.5th 719, 734.) The permanent injunction is based on Defendant’s breach of the NDA and continued use of the purportedly stolen information. However, because the court sustains the demurrer to the breach of contract cause of action, the court sustains the permanent injunction cause of action. Similarly, specific performance is a remedy to breach of contract. (Tamarind Lithography Workshop, Inc. v. Sanders (1983) 143 Cal.App.3d 571, 575.)

As for the specific performance cause of action, “Specific performance of a contract may be decreed whenever: (1) its terms are sufficiently definite, (2) consideration is adequate, (3) there is substantial similarity of the requested performance to the contractual terms, (4) there is mutuality of remedies, and (5) plaintiff's legal remedy is inadequate.” (Union Oil Co. of California v. Greka Energy Corp. (2008) 165 Cal.App.4th 129.) Plaintiff has alleged sufficiently alleged a request for specific performance. However, because the court sustains the demurrer to the breach of contract cause of action, the court sustains the specific performance cause of action.

The court notes that plaintiffs should correct the mislabeling of the causes of action in their amended pleading. The SAC alleges fifth as specific performance (the SAC mislabels it fourth) and sixth cause of action for permanent injunction (the SAC mislabels it fifth).

Case Number: LC106864    Hearing Date: January 11, 2021    Dept: W

lucky’s two-way radios, inc. et al., v. cannata

defendant’s motion to compel further deposition production of documents, compel further responses to special interrogatory no. 66, and motion for terminating sanctions, or the alternative, issue sanctions (“Second motion to compel”); plaintiff’s motions to quash deposition subpoena; defendant’s motion to bind lucky’s prior discovery responses

Date of Hearing: January 11, 2021 Trial Date: None set.

Department: W Case No.: LC106864

BACKGROUND

Plaintiffs Lucky’s Two-Way Radios, Inc. and Buddy Corporation (“LTWR”) allege that Frank J. Cannata (“Cannata”) was a consultant for Plaintiffs’ business pursuant to a consulting services agreement. While consulting for Plaintiffs, Cannata allowed or arranged for valuable company property to be taken by “Mr. Recycling” without Plaintiffs’ consent. Plaintiff further claims that on December 8, 2017, Cannata improperly transferred proprietary information via e-mail to personal accounts. Plaintiff alleges a loss of $500,000 in property.

Plaintiffs filed a complaint on February 13, 2018. The Second Amended Complaint (“SAC”) was filed on August 7, 2020, alleging: (1) Breach of Contract; (2) Conversion; (3) Breach of Fiduciary Duty; (4) Fraud and Fraudulent Concealment; (5) Specific Performance; and (6) Permanent Injunction

On March 29, 2019, the court granted Cannata’s motion for leave to file a cross-complaint. Cannata filed the first amended cross-complaint against Plaintiffs Lucky’s Two-Way Radios, Inc. and Buddy Corporation on April 10, 2019.

Cannata filed a second amended cross-complaint (“SAXC”) on August 2, 2019. The SAXC against Cross-Defendants alleges several causes of action including breach of contract, indemnity, labor code retaliation and wage and hour violations, false pretenses, fraud, battery, stored communications violations, trespass, and unfair competition.

On October 13, 2020, default was entered against Defendant because he failed to file an answer to the SAC. Default was set aside and vacated on December 17, 2020.

[Tentative] Ruling

1. Defendant’s Motion to Compel Further Deposition Production of Documents, Compel Further Responses to Special Interrogatory No. 66, and Motion for Terminating Sanctions, or the Alternative, Issue Sanctions (“Second Motion To Compel”) is GRANTED, in part.

2. Plaintiffs’ Motion to Quash/Modify the Deposition Subpoena Served on Hartford Fire Insurance Company is denied based on the modified subpoena.

3. Plaintiffs’ Motion to Quash/Modify the Deposition Subpoena Served on Coremark Insurance Services, Inc. is denied based on the modified subpoena.

4. Defendant’s Motion to Bind Plaintiff LTWR’s Prior Discovery Responses is DENIED.

request for judicial notice

Defendant Frank J. Cannata requests this court take judicial notice of several pleadings filed with the court in this case. (See RJN, Exhs. 1 – 19.)

As these materials reflect court records, which are properly subject to judicial notice, the court grants Cannata’s request for judicial notice as to the existence of these documents. The truth of allegations made in these court documents are not judicially noticeable.

In Reply, Defendant further requests this court take judicial notice of (1) Transcript of Proceedings, September 12, 2019 (Exh. A) and (2) August 6, 2019 Declaration of Barry A. Bradley (Exh. B).

Defendant’s request for judicial notice is granted.

Defendant also requests this court take judicial notice of: (1) Plaintiffs’ Reply iso Motion for Leave to File a Second Amended Complaint (Exh. A); (2) August 2, 2020 Declaration of Frank J. Cannata iso MSA (Exh. B); (3) Transcript of Proceedings, March 5, 2020 (Exh. C); (4) March 18, 2020 Protective Order (Exh. D); and (5) Transcript of Proceedings, August 5, 2020 (Exh. E).

Defendant’s request for judicial notice is granted.

Again, Defendant filed a request for judicial notice. Defendant requests this court take judicial notice of (1) Cannata’s April 10, 2018 Answer to the First Amended Complaint (Exh. A) and Cannata’s August 2, 2019 Second Amended Cross-Complaint (Exh. B).

Defendant’s request for judicial notice is granted.

EVIDENTIARY OBJECTIONS

Plaintiffs submit evidentiary objections in Opposition to Defendant/Cross-Complainant Cannata’s Declaration in support of Second Motion to Compel.

Plaintiffs’ objections to nos. 1 – 2 are SUSTAINED; objection no. 3 is OVERRULED.

Plaintiffs also make evidentiary objections in response to the late filed declaration of Cannata in support of his Second Motion to Compel. The court overrules the objections. The court finds Plaintiffs were not prejudiced by the late filed declaration. The court also overrules objection no. 1 to the declaration.

discussion

1. DEFENDANT’S MOTION TO COMPEL FURTHER DEPOSITION PRODUCTION OF DOCUMENTS OF LUCKY’S PERSON MOST QUALIFIED; TO COMPEL FURTHER DEPOSITION PRODUCTION OF DOCUMENTS FOR BUDDY’S PERSON MOST QUALIFIED; TO COMPEL FURTHER RESPONSES TO SPECIAL INTERROGATORY NO. 66; AND MOTION FOR TERMINATING SANCTIONS, OR IN THE ALTERNATIVE, ISSUE SANCTIONS

Defendant Frank J. Cannata moves this court for an order: (1) requiring Plaintiff/Cross-Defendant LTWR and Buddy Corporation to produce all documents relating to its tender to Hartford Fire Insurance, and/or other insurance companies, regarding the equipment at issue; (2) requiring Plaintiff/Cross-Defendant LTWR and Plaintiff/Cross-Defendant Buddy Corporation to furnish a privilege log; (3) provide further responses to Special interrogatory no. 66; and (4) for sanctions of an order striking Plaintiff LTWR and Plaintiff Buddy’s Second Amended Complaint; or, in the alternative, an issue sanction determining that Cannata acted as an officer in an enterprise for Plaintiff LTWR’s benefit and an issue sanction determining that Cannata was not responsible for the loss of the equipment at issue in this litigation.

Cannata contends on August 27, 2020, this court ordered Plaintiffs to produce all Hartford communications, with all privileges deemed waived. In response to this court’s order of August 27, 2020, however, Plaintiffs have taken the frivolous position that: (1) LTWR was the compelled party; and (2) LTWR will not respond because the equipment discussed in the Hartford documents was “Buddy owned” equipment; and (3) Buddy will relitigate the issue anew. However, LTWR has testified that it was a joint client to the Hartford tender. Accordingly, it is black-letter law that LTWR has control over the Hartford file, and Buddy cannot assert the privilege as against LTWR. (Evid. Code, § 962; Wortham & Van Liew v. Superior Court (1987) 188 Cal.App.3d 927, 932–933; Fletcher v. Superior Court (1996) 44 Cal.App.4th 773, 777.)

In opposition, Plaintiffs LTWR and Buddy first oppose the motion on the grounds Mr. Cannata has improperly combined three separate Motions into one. The court agrees. Defendant improperly combines three separate motions – a motion to compel compliance with the August 27, 2020 order; a motion to compel further responses to special interrogatory no. 66; and a motion for terminating sanctions. The motions should have been filed and reserved separately on the court’s calendar as the court’s reservation system is designed to ensure the court has sufficient time to prepare for the motions on calendar each week. The court admonishes Defendant for its failure to file the three motions separately. Nonetheless, the court finds that the combination of these motions is not prejudicial to plaintiffs and that it would be extremely inefficient and time consuming for the court to order them to be brought separately.

Next, Plaintiffs argue Cannata failed to formally meet and confer regarding his claims related to the 12,000 emails that were not produced pursuant to deposition notice and failed to properly meet and confer in any way with regard to Special Interrogatory No. 66. Moreover, Plaintiffs argue Mr. Crossin properly objected during the October 21, 2020, deposition of LTWR’s PMQ to the issue of why LTWR did not produce 12,000 emails as they were emails related to his status as an independent contractor, which were produced by Buddy to Hartford as part of the claim.

In Reply, Cannata argues the claimed failure to “Meet and Confer” is sheer gall and there was actually five meet and confer efforts. While there is dispute as to whether the parties sufficiently met and conferred, or even met and conferred at all, the court does not deny the motion on these grounds. As noted by Plaintiffs, the fact that the attorneys had a strong personal dislike for each other is no excuse for failure to meet and confer. (See Volkswagenwerk Aktiengesellschaft v. Sup. Ct. (1981) 122 Cal.App.3d 326, 333-334.) The court expects the parties to work together before involving the court in such matters.

Next, Plaintiffs oppose the motion on the grounds: (1) Cannata refuses to accept the corrected responses; (2) Cannata has failed to establish any good cause for why LTWR should have to produce the 12,000 emails at issue regarding Cannata’s status as an independent contractor, and that have already been produced by Buddy; and (3) as a separate legal entity, Buddy is not bound by this Court’s August 27, 2020 Order.

First, the court notes it will address Plaintiffs’ corrected responses in the motion to bind below. Second, the court finds Cannata has not demonstrated good cause for e-mails regarding Cannata’s status as an independent contractor. Both the requests to LTWR and Buddy are for “All DOCUMENTS YOU submitted to any insurer relating to the property described in Exhibit "B" to this Notice of Deposition (hereinafter, the "Disputed Property").” (Lesches Decl., Exh. H, Q.) Although Plaintiff’s claims regarding Cannata’s status as an independent contractor is a core issue in this proceeding, that is not what the discovery request is regarding. The August 27, 2020 Order was specifically regarding Cannata’s request for a court order requiring “LTWR to answer further deposition questions relating to the topics of … its tender to Hartford Fire Insurance, and/or other insurance companies regarding the equipment at issue and … LTWR to produce all documents relating its tender to Hartford Fire Insurance, and/or other insurance companies, regarding the equipment at issue.” (Minute Order, August 27, 2020.)

As a result, to the extent LTWR did not tender the documents ordered in the August 27, 2020, the court orders LTWR to do so. The parties must come to an agreement as to whether the documents have been produced or not. The court notes despite Cannata’s argument the August 19, 2019 “Clawback” order is moot, the order is not. As a result, anything that was inadvertently produced should have been clawed back pursuant to the August 19, 2019 Order. In fact, that is what counsel for Plaintiffs attests. Counsel does attest Cannata ended up returning all of the e-mails in dispute and then provided Cannata with the unprivileged documents. (Rossi Decl. ¶5.) Plaintiffs also do claim they did produce a Privilege Log pursuant to the court order. (Rossi Decl. ¶4, Exh. B.) If there are any issues regarding privileged documents, the court may decide to review, in camera, any disputes.

Moreover, despite Plaintiffs’ contention that Buddy, not LTWR, is the sole owner of the identified stolen electronic equipment, Cannata has shown good cause for compelling the production of documents from LTWR, if they do exist. “Good cause” may be found to justify discovery where specific facts show that the discovery is necessary for effective trial preparation or to prevent surprise at trial. (See Associated Brewers Dist. Co. v. Superior Court (1967) 65 Cal.2d 583, 586-588; see also CCP §§ 2017.010, 2019.030(a)(1) [information is discoverable if it is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence and it is not unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive.].) As a result, communications between LTWR and Hartford might reasonably assist a party in evaluating the case, preparing for trial, or facilitating settlement thereof.” (City of Los Angeles v. Superior Court (2017) 9 Cal.App.5th 272, 288.) The court notes, however, Plaintiffs do not have to produce documents that are unreasonably cumulative, duplicative, burdensome, and/or harassing. (CCP §2025.450.) (emphasis added.)

Turning to the issue of Buddy, the court first notes Buddy is not bound by the August 27, 2020 Order. The Order specifically addressed Cannata’s request regarding LTWR and its tender to Hartford Fire Insurance. Moreover, the court finds Buddy (nor LTWR) waived privilege by providing documents to their insurance provider, if they provided the documents as part of their agreement with Hartford to provide Plaintiffs with insurance and/or in anticipation of litigation. However, the court finds Cannata has shown good cause for documents relevant to the request for production regarding Buddy. Specifically, Plaintiffs admit Buddy is the owner of the identified stolen electronic equipment. To be clear, this order is not regarding the e-mails regarding Cannata’s independent contractor status. As the court previously discussed, Cannata has not demonstrated good cause for e-mails regarding Cannata’s status as an independent contractor.

Special Interrogatory No. 66

Turning to the motion to compel further responses to special interrogatory no. 66, the court finds as follows:

Special Interrogatory 66 asked LTWR to: “Identify all entities for which LTWR is the custodian of confidential, proprietary, and/or trade secret information.” (Lesches Decl. ¶47, Exh. U.) LTWR asserted objections including attorney client privilege; vague, ambiguity, and uncertainty; violating trade secret information and documentation; and violating the NDA signed by the Propounding Party. (Lesches Decl., Exh. U.)

Cannata argues LTWR failed to address why it should not be bound to its previous interrogatory responses identifying itself as a party with custody and control over the Hartford documents, and LTWR’s response failed to address Special Interrogatory No. 66. LTWR failed to respond, despite LTWR’s own declaration that it was the “custodian” of “confidential information” for “the Organization.”

In opposition, Plaintiffs argue Cannata has failed to properly meet and confer in any way with regard to Special Interrogatory No. 66. (CCP §§2016.040, 2030.300(b)(1).) Failing to make a “reasonable and good faith attempt” to resolve the issues informally before a motion to compel is filed constitutes a “misuse of the discovery process.” Plaintiffs also argue Cannata seeks information related to the identification of business entities for which LTWR maintains, as a custodian only, confidential, proprietary, and/or trade secret information. At no time have Plaintiffs ever alleged in the SAC that LTWR has ownership or control over the confidential, proprietary, and/or trade secret information they maintain for these other companies.

As discussed above, while there is dispute as to whether the parties sufficiently met and conferred, or even met and conferred at all, the court does not deny the motion on these grounds. As noted by Plaintiffs, the fact that the attorneys had a strong personal dislike for each other is no excuse for failure to meet and confer. (See Volkswagenwerk Aktiengesellschaft v. Sup. Ct. (1981) 122 Cal.App.3d 326, 333-334.) The court expects the parties work together before involving the court in such matters.

Next, the court finds the objections without merit. Plaintiffs do not address how such information is attorney-client privilege. Moreover, Plaintiffs have not demonstrated this information is a legally protected interest. “The party asserting a privacy right must establish a legally protected privacy interest, an objectively reasonable expectation of privacy in the given circumstances, and a threatened intrusion that is serious. [Citation.] The party seeking information may raise in response whatever legitimate and important countervailing interests disclosure serves, while the party seeking protection may identify feasible alternatives that serve the same interests or protective measures that would diminish the loss of privacy. A court must then balance these competing considerations.” (Williams v. Superior Court (2017) 3 Cal.5th 531, 552.) Moreover, Plaintiffs only claim it could result in LTWR being forced to violate an NDA, but do not state how or provide copies of the NDA.

Based on the foregoing, Defendant’s motion to compel further discovery responses to special interrogatory no. 66 is granted.

Terminating/Issue Sanctions

As for the request for terminating sanctions, or in the alternative, issue sanctions, the court denies the request to impose terminating or issue sanctions.

In a request for terminating or issue sanctions, the court should consider the totality of the circumstances, including conduct of the party to determine if the actions were willful, the determent to the propounding party, and the number of formal and informal attempts to obtain discovery. (Lang v. Hochman (2000) 77 Cal.App.4th 1225, 1246.)  If a lesser sanction fails to curb abuse, a greater sanction is warranted. (Van Sickle v. Gilbert (2011) 196 Cal.App.4th 1495, 1516.) However, “the unsuccessful imposition of a lesser sanction is not an absolute prerequisite to the utilization of the ultimate sanction.”  (Deyo v. Killbourne (1978) 84 Cal.App.3d 771, 787.) Terminating sanctions should not be ordered lightly, but are justified where a violation is willful, preceded by a history of abuse, and there is evidence that less severe sanctions would not produce compliance with the discovery rules. (Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967, 992.) 

Cannata argues numerous circumstances demonstrate that Plaintiffs must be subject to a terminating sanction against Plaintiffs’ complaint: (1) Plaintiffs’ noncompliance commenced with the frivolous opposition to Form Rog 4.1, for which Plaintiffs were sanctioned and frivolously appealed to the Supreme Court; (2) Plaintiffs were compelled to produce documents, and instead evaded the order through a frivolous “Buddy, not LTWR” assertion that was not previously; (3) there is a protective order in this action, which even has an attorneys’-eyes only designation that Plaintiffs could have availed themselves to; (4) Plaintiffs refused to furnish a privilege log; (5) Plaintiffs moved to quash the documents compelled to the Court, and did not consent to partial production by Hartford; (6) the second-bite motion by Plaintiffs raises a frivolous objection (i.e. an insurer-insured privilege), which Plaintiffs failed to adequately meet and confer regarding; (7) there are numerous additional pending sanctions-related issues, such as LTWR’s failure to electronically prepare for the October 21, 2020, deposition; (8) the amount of time that has already elapsed in the litigation; (9) the discovery at issue relates to Plaintiffs’ representations to Hartford regarding Cannata’s role at the companies, a hotly contested issue; and (10) Plaintiffs’ response to Special Interrogatory 76 demonstrates that Plaintiffs do not heed orders.

However, the court finds terminating or issue sanctions are not warranted at this time. Terminating sanctions based on willful failure to obey court orders to produce documents and a witness for deposition are reversed where there is no showing the court could not have obtained compliance by using lesser sanctions or imposing other sanctions (e.g., issue or evidentiary). (Lopez v. Watchtower Bible & Tract Soc. of New York, Inc. (2016) 246 Cal.App.4th 566, 605.) The parties have a serious dispute regarding whether the Plaintiffs have complied with the court including which Plaintiff needs to provide discovery, if the discovery has already been provided, and so on. The fact that there are “mismatched resources” is not grounds for terminating or issue sanctions.

Conclusion

Based on the foregoing, Defendant’s motion to compel further deposition production of documents and compel further response to special interrogatory no. 66 is GRANTED. Defendant’s motion for terminating sanctions, or in the alternative, issue sanctions is GRANTED, in part.

2. PLAINTIFFS’ MOTION TO QUASH/MODIFY THE DEPOSITION SUBPOENA SERVED ON HARTFORD FIRE INSURANCE COMPANY

Plaintiffs LTWR and Buddy move this court for an order quashing the Deposition Subpoena served by Defendant Cannata seeking the production of several documents on Plaintiffs’ corporate insurance provider and insurance agent, Hartford Fire Insurance Company.

Plaintiffs argue this motion is made on the grounds that the Deposition Subpoena is overbroad and overly burdensome in duration requesting nearly 4 years’ worth of unlimited legal, insurance and communications documents related thereto; the Deposition Subpoena also fails to provide a specific description of each item requested without good cause or with any reasonable expectation of discovering relevant, admissible evidence; and the Deposition Subpoena seeks irrelevant, private and privileged attorney-client documents, attorney work-product related to communications exchanged between Plaintiffs and their legal counsel and/or their insurance providers and agents. Plaintiffs contend based on the categories of documents subpoenaed by Cannata, Plaintiffs have deduced that Cannata is seeking to obtain documents related to his being listed as an officer on Plaintiffs’ and other James Kay businesses EPLI, EPL and/or D&O insurance policies issued by Hartford and obtained for Cannata by CoreMark Insurance Services, Inc.

In opposition, Cannata argues Plaintiffs’ Motion to Quash Cannata’s subpoena to Hartford attacks the wrong subpoena. After meeting and conferring with Hartford regarding Hartford’s concerns, Cannata substantially narrowed the Hartford subpoena. Plaintiffs’ MTQ attacks the superseded subpoena.

In Reply, Plaintiffs state they are agreeable to the compromise between Mr. Cannata and Hartford so long as all emails previously ordered clawed back and protected by this court on August 19, 2019, are not part of the production. As discussed in Cannata’s second motion to compel, to the extent the documents are protected by the attorney client privilege, the court will modify Cannata’s Deposition Subpoena.

Based on the foregoing, the deposition subpoena served on Harford is MODIFIED.

3. PLAINTIFFS’ MOTION TO QUASH/MODIFY THE DEPOSITION SUBPOENA SERVED ON COREMARK INSURANCE SERVICES, INC.

Plaintiffs LTWR and Buddy move this court for an order quashing the Deposition Subpoena served by Defendant Cannata seeking the production of several documents on Plaintiffs’ corporate insurance provider and insurance agent, Coremark Insurance Services, Inc.

Plaintiffs again argue this motion is made on the grounds that the Deposition Subpoena is overbroad and overly burdensome in duration requesting nearly 4 years’ worth of unlimited legal, insurance and communications documents related thereto; the Deposition Subpoena also fails to provide a specific description of each item requested without good cause or with any reasonable expectation of discovering relevant, admissible evidence; and the Deposition Subpoena seeks irrelevant, private and privileged attorney-client documents, attorney work-product related to communications exchanged between Plaintiffs and their legal counsel and/or their insurance providers and agents.

Plaintiffs claim based on the categories of documents subpoenaed by Cannata, Plaintiffs have deduced that Cannata is seeking to obtain documents related to his being listed as an officer on Plaintiffs’ and other James Kay businesses EPLI, EPL and/or D&O insurance policies issued by Hartford Fire Insurance Co. and obtained for Cannata by CoreMark.

In Reply, Plaintiffs state they are agreeable to extending the compromise reached between Mr. Cannata and Hartford to CoreMark, so long as all emails previously ordered clawed back and protected by this court on August 19, 2019, are not part of the production. As discussed in Cannata’s second motion to compel, to the extent the documents are protected by the attorney client privilege, the court will modify Cannata’s Deposition Subpoena.

Based on the foregoing, the deposition subpoena served on CoreMark is MODIFIED.

4. DEFENDANT’S MOTION TO BIND PLAINTIFF LTWR’S PRIOR DISCOVERY RESPONSES

Defendant Cannata moves the court under Code of Civil Procedure section 2030.310 for an order binding Plaintiff and Cross-Defendant to its prior verified binding responses for purposes of establishing that LTWR has “control” of all documents submitted by Plaintiffs to Hartford.

“To prevail on a motion to deem interrogatories binding, the moving party must establish three conditions. First, “[t]he initial failure of the responding party to answer the interrogatory correctly [must have] substantially prejudiced the party who propounded the interrogatory.” (Code Civ. Proc., § 2030.310, subd. (c)(1).) Second, the responding party must have “failed to show substantial justification for the initial answer to that interrogatory.” (Id., § 2030.310, subd. (c)(2) .) Finally, the prejudice to the propounding party must not be curable either by a continuance to permit further discovery or by the use of the initial answer. (Id., § 2030.310, subd. (c)(3).) We review the trial court's discovery rulings for an abuse of discretion. (See Costco Wholesale Corp. v. Superior Court (2009) 47 Cal.4th 725, 733[101 Cal.Rptr.3d 758, 219 P.3d 736].)” (People ex rel. Government Employees Ins. Co. v. Cruz (2016) 244 Cal.App.4th 1184, 1194.)

Cannata makes the motion on several grounds: (1) the amendment, one day prior to a court order compelling LTWR’s production, substantially prejudices Cannata; (2) LTWR has failed to show substantial justification for the initial answer; (3) the prejudice cannot be cured; (4) there is no authority allows amending verified RFP responses; (5) LTWR’s RFP responses failed to contend that Buddy was “the name [of the] . . . organization known or believed by that party to have possession, custody, or control of that item or category of item.”; (6) LTWR has not moved for relief under section 2031.300 of the Code of Civil Procedure from its failure to object; (7) LTWR’s amendments are inconsistent with other unamended responses; (8) LTWR’s amendments fail to claim it lacks control over the documents; and (9) LTWR can be bound under a single-enterprise theory.

The court notes Plaintiffs, in opposition, argue they were never served the Request for Judicial Notice or Declaration of Levi Lesches and Declaration of Frank J. Cannata, all that was served on Plaintiffs was a Memorandum of Points and Authorities. Cannata does not address this issue in their Reply. Regardless, the court finds Plaintiffs were not prejudiced by the lack of request for judicial notice and declarations in responding to this motion.

Next, the court finds Defendant has failed to meet the requirements of Section 2030.310. First, the motion is not clear as to what responses Defendant seeks to bind. In Section II(a), Defendant contends LTWR served verified, supplemental responses to FROG 4.1, identifying itself as insured for the claims at issue. Defendant further contends throughout this litigation, Plaintiffs’ discovery responses always represented Plaintiffs as joint owners of the equipment in contention. (See Lesches Decl., Exh. D [email from Counsel explaining that Buddy owned “some” of the sought equipment]; Exh. E [Form Int. Resp. 50.2, seeking damages for LTWR due to the lost equipment]; Exh. F [LTWR Resps. to SROGS 60 and 61, contending that LTWR sought prevailing-party fees on the conversion cause of action, based on the NDA’s prevailing—party clause; Resp. to SROG 44, contending that the equipment loss breached the LTWR NDA].) Similarly, the FAC named LTWR as a joint Plaintiff to the Conversion Cause of Action. (RJN, Exh. D.)

However, in Section II(b), Cannata contends LTWR failed to make any attempt at amending any of the interrogatory responses contending that Cannata’s causing the equipment’s loss constituted a violation of the NDA—namely, FROG 50.2 and SROGs 44, 60, and 61. As a result, it is not clear to the court which responses Plaintiffs amended and which responses Defendant seeks to bind.

Moreover, Defendant argues on August 26, 2020, after the tentative was published compelling LTWR’s production of the Hartford documents, LTWR amended its discovery responses to claim it did not own the equipment that was the subject of the Hartford tender. Until August 2020, however, there was never a contention that LTWR could not respond and throughout discovery, LTWR’s verified discovery responses identified itself—i.e., LTWR—as a party with “control” over information relating to the Hartford tender.

However, it is not clear how Plaintiffs’ amendments to its interrogatories is applicable to this court’s August 27, 2020 Order for production of documents. Moreover, Defendant has not presented sufficient evidence that LTWR is not able to do so. Defendant only argues no authority allows amending verified RFP responses. The court does note that although Plaintiffs contend only objections were served in the request for production of documents, section 2031.230 provides that if the document is in possession of another party, they must state so and set forth the name and address of who they believe has possession, custody, or control of the item. (CCP §2031.230.) As a result, Plaintiffs must provide code sufficient responses. Inconsistent discovery responses will affect Plaintiffs on substantive motions and trial later on.

The court also notes Defendant has also failed to show he has substantially prejudiced. First, the court has ruled both Plaintiffs (LTWR and Buddy) must comply with certain requestfor production of documents even if Buddy, not LTWR, is the owner of the equipment at issue. (See Second Motion to Compel above.) Even if the eight month delay prejudiced Cannata, Defendant has not shown any prejudice cannot be cured by a continuance/further discovery. There is no trial set in this matter. As a result, Defendant has not demonstrated why they cannot seek to depose Buddy’s PMQ regarding the issue of equipment.

Lastly, the court notes whether the parties are a single enterprise is not applicable to the analysis of whether the court shall bind Plaintiffs’ prior interrogatory responses.

Accordingly, the court denies Cannata’s Motion to Bind.

lucky’s two-way radios, inc. et al., v. cannata

plaintiffs’ motion for summary judgment

Date of Hearing: January 11, 2021 Trial Date: None set.

Department: W Case No.: LC106864

BACKGROUND

Plaintiffs Lucky’s Two-Way Radios, Inc. and Buddy Corporation (“LTWR”) allege that Frank J. Cannata (“Cannata”) was a consultant for Plaintiffs’ business pursuant to a consulting services agreement. While consulting for Plaintiffs, Cannata allowed or arranged for valuable company property to be taken by “Mr. Recycling” without Plaintiffs’ consent. Plaintiff further claims that on December 8, 2017, Cannata improperly transferred proprietary information via e-mail to personal accounts. Plaintiff alleges a loss of $500,000 in property.

Plaintiffs filed a complaint on February 13, 2018. The Second Amended Complaint (“SAC”) was filed on August 7, 2020, alleging: (1) Breach of Contract; (2) Conversion; (3) Breach of Fiduciary Duty; (4) Fraud and Fraudulent Concealment; (5) Specific Performance; and (6) Permanent Injunction

On March 29, 2019, the court granted Cannata’s motion for leave to file a cross-complaint. Cannata filed the first amended cross-complaint against Plaintiffs Lucky’s Two-Way Radios, Inc. and Buddy Corporation on April 10, 2019.

Cannata filed a second amended cross-complaint (“SAXC”) on August 2, 2019. The SAXC against Cross-Defendants alleges several causes of action including breach of contract, indemnity, labor code retaliation and wage and hour violations, false pretenses, fraud, battery, stored communications violations, trespass, and unfair competition.

On October 13, 2020, default was entered against Defendant because he failed to file an answer to the SAC. Default was set aside and vacated on December 17, 2020.

[Tentative] Ruling

1. Plaintiffs’ Motion for Summary Adjudication of the First Cause of Action as to the Second Amended Complaint is DENIED.

MOTION FOR SUMMARY ADJUDICATION

Plaintiffs move this court for an order granting summary adjudication as to its Second Amended Complaint against Defendant/Cross-Complainant and requests that this court find that no triable issues of material fact exist as to the following cause of action and claims in the SAC against Cannata.

Plaintiffs move for summary adjudication on the grounds no triable issue of material fact exist that Cannata voluntarily entered into a Non-Disclosure Agreement dated on or about April 4, 2017, as part of his employment duties and responsibilities as an Independent Contractor Consultant with Plaintiff LTWR. Plaintiffs further argue no triable issues of material fact exist to indicate that Cannata did not breach the terms and conditions of the Non-Disclosure Agreement dated on or about April 4, 2017, by emailing to himself, without express written permission, confidential and proprietary business information.

Thus, Plaintiffs claim the issues before the court are: Did Cannata enter into an NDA with LTWR and, if so, did he breach the NDA by emailing to himself, to his private internet email account, Plaintiffs’ private, privileged and confidential information related to 30 User Names and Passwords to Plaintiffs’ communications sites throughout the State of California.

Plaintiffs allege on April 4, 2017, Defendant Cannata and Plaintiff LTWR entered into a confidentiality agreement entitled LUCKY’S TWO-WAY RADIOS INC. CONFIDENTIALITY, TRADE SECRET, AND NON-SOLICITATION AGREEMENT (“NDA”). (SAC ¶7, Exh. A.) Paragraph 2 of the NDA contains a “No Disclosure” clause wherein Cannata agrees to not summarize, copy, disclose, reverse engineer, or otherwise communicate any Confidential Information to any person or entity. (SAC, Exh. A; UMF 3.) Cannata breached the agreement when, on December 8, 2017, Cannata without express written consent forwarded sensitive, proprietary, trade secret and confidential company documents and information to his own personal email account. (SAC ¶¶20, 26.) Plaintiffs claim the email contained a copy of a word document from July 17, 2017, which contained information with user names and passwords to over 30 communications sites throughout California. (SAC ¶20.) As a result of Cannata’s conduct, Plaintiffs have incurred substantial damages including unauthorized theft, embezzlement, and possible destruction of an enormous amount of expensive property approximately in an amount of approximately $500,000. (SAC ¶28.) The NDA also contains an Equitable Relief and Liquidated Damages clause, which sets the amount of agreed upon damages violating the NDA at $250,000.00 (SAC ¶8.) As a result, Cannata is liable for the $250,000 in liquidated damages due to his actions. (SAC ¶29.)

There is no dispute on June 8, 2018, Cannata filed a declaration with the Court under penalty of perjury under the laws of the state of California. (UMF 7.) Paragraph 5 of Cannata’s declaration attests: “On or about April 2018, I deleted, using a web browser, the email received on December 8, 2017, from frank@buddycorp.com with the attachment User Names and Passwords July 17.2017.docx. Thereafter, I deleted that same email from the "Trash" email folder in my frankjcannata@gmail.com account.” (Compendium of Exhibits, Exh. C.)

In opposition, Cannata argues Plaintiffs’ motion must be denied for both procedural and substantive issues. The court first addresses the procedural issues.

Cannata first argues the MSA must be denied as to Plaintiff Buddy because not a shred of evidence is tendered to support the notion that Buddy Corporation is a signatory to, or third-party beneficiary of, the NDA. Because Buddy Corporation has failed to meet its moving burden, the MSA must be denied as to Buddy Corporation. The court agrees. Plaintiffs do not address this issue in Reply, nor does the evidence support that Plaintiff Buddy was a party to the NDA. As a result, the motion for summary adjudication is only applicable to Plaintiff LTWR.

Next, Cannata argues the MSA fails to specify the cause of action to be adjudicated and seeks adjudication on part of a cause of action. Cannata argues Plaintiff’s Notice of Motion fails to seek adjudication as to a complete cause of action. Plaintiffs’ request as to the existence of the NDA and Defendant’s breach of the NDA does not seek summary adjudication that one or more causes of action has no merit, that there is no affirmative defense to one or more causes of action, that a claim for punitive damages has no merit, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs, as required by Code of Civil Procedure section 437c(f)(1). (See Paramount Petroleum Corp. v. Superior Court (2014) 227 Cal.App.4th 226, 244 holding there is no statutory basis for summary adjudication on the issue of breach.)

Code of Civil Procedure section 437c(t) allows a party to move for summary adjudication of a legal issue or a claim for damages other than punitive damages that does not completely dispose of a cause of action, affirmative defense, or issue of duty. However, before the court can consider the legal issues that do not completely dispose of a cause of action, the moving party must comply with the requirements of Section 437c(t). Before filing a motion for adjudication based on Section 437c(t), the parties whose claims or defenses are put at issue by the motion shall submit to the court both of the following: (i) A joint stipulation stating the issue or issues to be adjudicated; and (ii) A declaration from each stipulating party that the motion will further the interest of judicial economy by decreasing trial time or significantly increasing the likelihood of settlement. (CCP §437c(t)(1)(A).) (emphasis added.)

Further, the motion does not contain a statement in the notice of motion that reads substantially similar to the following: “This motion is made pursuant to subdivision (t) of Section 437c of the Code of Civil Procedure. The parties to this motion stipulate that the court shall hear this motion and that the resolution of this motion will further the interest of judicial economy by decreasing trial time or significantly increasing the likelihood of settlement.” (CCP § 437c(t)(4)(A).) Were the court to determine in our case that Cannata breached the NDA, the matter would still have to proceed with respect to damages. A plaintiff cannot obtain summary adjudication on the liability issue and leave the damages issue to be resolved later on. (See Paramount Petroleum Corporation v. Superior Court (2014) 227 Cal.App.4th 226, 243 (“As we have explained, the governing statute provides that a plaintiff can only obtain summary adjudication of a cause of action if the plaintiff establishes each element of the cause of action entitling it to judgment on that cause of action.”) As discussed below, Plaintiffs do not seek adjudication of damages.

Since the court has not received any stipulation, the noticed issues are procedurally improper and the motion for adjudication as to Issues 1 and 2 are DENIED.

As for Cannata’s contention that the Notice of Motion makes no reference to section 1671; to a liquidated-damages provision; or, for that matter, to damages in general, the court agrees. The Notice of Motion limits itself to two issues: Cannata voluntarily entered into an NDA and Cannata breached the terms and conditions of the NDA by emailing to himself, without express written permission, confidential and proprietary business information. The court also notes the issue of liquidated damages is not presented in the Separate Statement. “The Separate Statement of Undisputed Material Facts in support of a motion must separately identify each cause of action, claim, issue of duty, or affirmative defense, and each supporting material fact claimed to be without dispute with respect to the cause of action, claim, issue of duty, or affirmative defense…” (CRC 3.1350(d).)

As a result, the court will not consider the issue of liquidated damages at this time. “It is elemental that a notice of motion must state in writing the ‘grounds upon which it will be made.’ [Citations.] Only the grounds specified in the notice of motion may be considered by the trial court. [Citations.] This rule has been held to be especially true in the case of motions for summary adjudication of issues.” (Gonzales v. Superior Court (1987) 189 Cal.App.3d 1542, 1545.) The court also notes Plaintiffs’ Reply confirms “the notice makes no reference to the Liquidated Damages or the amount sought as that is not the subject of this Motion. Rather, Plaintiffs are simply seeking an adjudication that Mr. Cannata voluntarily breached the NDA through his actions of emailing to himself company Confidential Information without first receiving the express written permission of the company’s President. The issue of damages and liquidated damages resulting from such breach would contain triable issues of fact and are reserved for another day and a hearing on damages should this Motion be successful.” (Reply, 4:22-28.)

In light of the court's rulings above, the court does not address the substantive issues regarding Plaintiffs’ motion for summary adjudication. The court also declines to rule on the objections to evidence filed in connection with this motion because the court deems them not to be material to its disposition of the motion. (CCP §437c(q).)

Based on the foregoing, Plaintiffs’ Motion for Summary Adjudication of the existence of the NDA and that Defendant breached the NDA is DENIED.

Case Number: LC106864    Hearing Date: December 17, 2020    Dept: W

lucky’s two-way radios, inc. et al., v. cannata

defendant/cross-complainant’s motion to vacate default and/or default judgment

Date of Hearing: December 17, 2020 Trial Date: None set.

Department: W Case No.: LC106864

Moving Party: Defendant/Cross-Complainant Frank J. Cannata

Responding Party: Plaintiffs/Cross-Defendants Lucky’s Two-Way Radios, Inc. and Buddy Corporation

BACKGROUND

Plaintiffs Lucky’s Two-Way Radios, Inc. and Buddy Corporation (“LTWR”) allege that Frank J. Cannata (“Cannata”) was a consultant for Plaintiffs’ business pursuant to a consulting services agreement. While consulting for Plaintiffs, Cannata allowed or arranged for valuable company property to be taken by “Mr. Recycling” without Plaintiffs’ consent. Plaintiff further claims that on December 8, 2017, Cannata improperly transferred proprietary information via e-mail to personal accounts. Plaintiff alleges a loss of $500,000 in property.

Plaintiffs filed a complaint on February 13, 2018. The Second Amended Complaint (“SAC”) was filed on August 7, 2020, alleging: (1) Breach of Contract; (2) Conversion; (3) Breach of Fiduciary Duty; (4) Fraud and Fraudulent Concealment; (5) Specific Performance; and (6) Permanent Injunction

On March 29, 2019, the court granted Cannata’s motion for leave to file a cross-complaint. Cannata filed the first amended cross-complaint against Plaintiffs Lucky’s Two-Way Radios, Inc. and Buddy Corporation on April 10, 2019.

Cannata filed a second amended cross-complaint (“SAXC”) on August 2, 2019. The SAXC against Cross-Defendants alleges several causes of action including breach of contract, indemnity, labor code retaliation and wage and hour violations, false pretenses, fraud, battery, stored communications violations, trespass, and unfair competition.

On October 13, 2020, default was entered against Defendant because he failed to file an answer to the SAC.

[Tentative] Ruling

Defendant/Cross-Complainant Frank J. Cannata’s Motion to Vacate Default and/or Default Judgment is GRANTED.

request for judicial notice

Defendant request this court take judicial notice of the July 9, 2020 Declaration of A. Rossi iso Motion for Leave to Amend (Exh. A) and the August 2, 2020 Second Amended Cross-Complaint (Exh. B).

As these materials reflect court records, which are properly subject to judicial notice, the court grants Cannata’s request for judicial notice as to the existence of these documents. The truth of allegations made in these court documents are not judicially noticeable.

discussion

Defendant/Cross-Complainant Frank J. Cannata moves this court for under Code of Civil Procedure section 473(b) for an order setting aside the October 13, 2020 Default and any judgment entered thereon on the grounds: (1) Plaintiffs remain subject to a binding stipulation to file a Third Amended Complaint, and, accordingly, no pleading is pending; (2) No deadline to respond was missed, as Plaintiffs stipulated to hold the responsive deadline open; (3) Plaintiffs could not withdraw the stipulation holding responsive deadlines open without affording a reasonable opportunity to demur; (4) Plaintiffs’ knowingly exploited delays caused by Counsel’s hospitalization and religious observance as purported “grounds” for rescinding their agreement to file a TAC, thereby violating the Unruh Act and Rule 8.4.1 of the California Rules of Professional Conduct. Under Civil Code § 3517, Plaintiffs’ cannot use their violations of law to take a default; (5) The default is void because Cannata’s prior answer on file sufficiently precludes a default; (6) The default is void because the Third Cause of Action in Cannata’s Cross-Complaint controverts all the amendments in the SAC; and (7) Cannata’s Counsel has filed his declaration that he relied on the stipulation, and mistaken reliance on a stipulation is per se “excusable neglect” and relief from default is mandatory; (8) Cannata’s Counsel has filed his declaration that he mistakenly believed the stipulation to be binding on Plaintiffs, and that Plaintiffs’ position was precluded by Rule 8.4.1 of the California Rules of Professional Conduct, and such mistake requires setting aside the default; (9) Cannata will submit a supplemental declaration, no less than sixteen court days prior to hearing on this motion, with Cannata’s proposed demurrer; and (10) Cannata alternatively seeks discretionary relief from default based on mistake, inadvertence, surprise, or excusable neglect.

Code of Civil Procedure section 473(b) contains two distinct provisions for relief. The first provision is discretionary and broad in scope, providing: “The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. Application for this relief shall be accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted, and shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken.” (CCP §473(b).)

The second provision is mandatory and narrowly covers only default judgments and defaults that will result in entry of judgments. It states: “[T]he court shall, whenever application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney’s affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney’s mistake, inadvertence, surprise, or neglect.” (CCP §473(b).)

Where a party moves for discretionary relief, “[t]he general rule is that the six-month period within which to bring a motion to vacate under section 473 runs from the date of the default and not from the default judgment taken thereafter.” (Rutan v. Summit Sports, Inc. (1985) 173 Cal.App.3d 965, 970; Weiss v. Blumencranc (1976) 61 Cal.App.3d 536, 540; Nemeth v. Trumbull (1963) 220 Cal.App.2d 788, 791.) The six-month limit is mandatory and a court has no authority to grant relief under CCP section 473(b) unless an application is made within the six-month period.¿¿(Arambula v. Union Carbide Corp.¿(2005) 128 Cal. App. 4th 333, 340.)¿ Accordingly, this six-month limit is jurisdictional because the court has no power to grant relief under CCP section 473(b) after that time.¿(Davis v. Thayer¿(1980) 113 Cal.App.3d 892, 901.)

Plaintiffs dispute that any stipulation/agreement had been formalized or finalized prior to default being taken, that any deadlines for responsive pleadings was extended based on the proposed stipulation, or that Mr. Cannata can do anything other than answer the SAC so that the parties can move forward with this matter.

First, the court finds there is grounds for mandatory relief. Cannata’s counsel submits an attorney declaration attesting to his mistake, inadvertence, surprise, or neglect. Counsel believed the stipulation was in place and therefore, Plaintiffs would not take default. (Lesches Decl. ¶¶6-35.) Moreover, due to the Jewish holidays and counsel’s medical issues, counsel was not able to sign the stipulation. (Lesches Decl. ¶¶11-19.) Due to this mistake, inadvertence, surprise, and/or neglect, default was entered.

Next, the court finds Cannata has not waived his right to demur to the amended complaint. A demurrer is an acceptable response after a default is vacated. (See Jensen v. Allstate Ins. Co. (1973) 32 Cal.App.3d 789 holding a demurrer was not insufficient when filed in support of a motion for relief from default in view of the Code of Civil Procedure provision that application for such relief must be accompanied by copy of answer or other pleading proposed to be filed.) Moreover, whether or not the stipulation is void, unenforceable, and so on, untimely demurrers may be considered in the discretion of the trial court. (Vitkievicz v. Valverde (2012) 202 Cal.App.4th 1306, 1314; Jackson v. Doe (2011) 192 Cal.App.4th 742, 749; McAllister v. County of Monterey (2007) 147 Cal.App.4th 253, 280.) In McAllister, the court noted “[a]s one commentator observes: “No statute or rule specifically provides a time limit for demurring to an amended complaint.” (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2006) ¶ 7:139, p. 7–53.)” (McAllister, supra, 147 Cal.App.4th at p. 280.) The court in McAllister also noted section 430.40 is permissive, not mandatory, because it uses the term “may” rather than “must.” (Id.) As a result, Cannata has properly filed a proposed demurrer to the SAC with the application for relief.

The court notes Cannata contends Plaintiffs remain subject to the binding stipulation to file a Third Amended Complaint, and, accordingly, no pleading is pending. This is beyond a request of the relief sought pursuant to Code of Civil Procedure 473(b).

Based on the foregoing, Cannata’s Motion to Vacate Default and/or Default Judgment is GRANTED.

Case Number: LC106864    Hearing Date: August 27, 2020    Dept: W

lucky’s two-way radios, inc. et al., v. cannata

motion to compel further discovery responses

Date of Hearing: August 27, 2020 Trial Date: None set.

Department: W Case No.: LC106864

Moving Party: Defendant Frank J. Cannata

Responding Party: Plaintiffs Lucky’s Two-Way Radios, Inc. and Buddy Corporation

[Tentative] Ruling

Defendant Frank J. Cannata’s Motion to Compel Further Responses of Lucky’s Person Most Qualified is GRANTED.

evidentiary objections

Plaintiffs object to Cannata’s Separate Statement and the declaration of Levi Lesches, Esq.

First, Plaintiffs object to Cannata’s Separate Statement on the grounds it fails to comply with CRC Rule 3.1345(a) and (c). However, as previously noted at the August 5, 2020 hearing, the Separate Statement is for the court’s convenience and is not a jurisdictional requirement. As such, the court finds the Separate Statement sufficient for the purposes of the instant motion. The court also notes Plaintiffs’ objections are improper in form. CRC Rule 3.1354(b) states “written objections to evidence must be served and filed separately from the other papers in support of or in opposition to the motion.” Plaintiffs include their evidentiary objects with their opposition to the Separate Statement.

As for Plaintiffs’ objections Nos. 1-5 to the Separate Statement are overruled.

Plaintiffs’ objections Nos. 1-4 to Lesches’ Declaration and attached exhibits are overruled.

request for judicial notice

Cannata requests this court take judicial notice of the following: (1) February 7, 2020 Official Transcript of Proceedings (Exh. A); (2) March 5, 2020 Official Transcript of Proceedings (Exh. B); (3) August 5, 2020 Minute Order (Exh. C); (4) Cannata’s February 4, 2020 IDC Statement (Exh. D); and (5) Plaintiffs’ August 7, 2020 Second Amended Complaint (Exh. E).

Plaintiffs object to the request for judicial notice on the grounds the court may take judicial notice of the hearing that occurred but nothing more and the request for judicial notice of such documents is irrelevant, unfairly prejudicial, and lacks probative value to dispute any genuine issue of material fact. The court overrules the objections. The court notes the truth of allegations made in these documents are not judicially noticeable.

As these materials reflect documents which are properly subject to judicial notice, the court grants plaintiff’s request for judicial notice as to the existence of these documents.

discussion

Cannata moves for on order compelling James A. Kay, Jr., the designated Person Most Qualified for LTWR to appear for further deposition at a time when the court will be available to field questions from Counsel. Cannata further moves for an order requiring Buddy’s PMQ to appear for deposition at the same time as LTWR’s further deposition. Specifically, Cannata moves this court for an order requiring:

(1) LTWR to answer further deposition questions relating to the topics of: (a) its contractual relationship to its other officers; (b) its tender to Hartford Fire Insurance, and/or other insurance companies, regarding the equipment at issue; (c) how LTWR valued the equipment on its financials; (d) LTWR’s anticipated reuse of the equipment; and (e) informal claims and legal claims of theft, and the like, raised by LTWR against other employees with access to the uninventoried equipment at issue;

(2) LTWR to produce all documents relating to: (a) its tender to Hartford Fire Insurance, and/or other insurance companies, regarding the equipment at issue; and (b) its submissions to Sprint–Nextel, and/or the 800 MHz Transition Administrator, regarding the costs of rebanding the equipment at issue;

(3) Buddy to appear for its PMQ deposition on the same date as LTWR’s continued deposition; and

(4) Requiring the Parties to Meet & Confer regarding mutually agreeable dates for the continued deposition, and then submit those dates to the Court so that the Court can specify a date it will be available to confer regarding issues arising at deposition.

In opposition, Plaintiffs first contend Cannata fails to attach the documents he seeks to introduce in support of his motion nor has he laid the foundation for such documents. Plaintiffs also contend Cannata’s Motion fails to introduce admissible evidence of any effort to meet and confer with Plaintiffs.

As for the admissibility of the exhibits, the court finds the certified deposition transcripts self-authenticating. As for the meet and confer requirements, “anything pertaining to the history of the litigation and the prior interaction between the parties of which the trial court may have been aware . . . support the finding of good faith efforts under the circumstances.” (Stewart v. Colonial Western Agency, Inc. (2001) 87 Cal.App.4th 1006, 1016.) As noted by Cannata, there has been an IDC and the parties could not come to an agreement.

Next, Plaintiffs contend Cannata’s Separate Statement does not comply with CRC Rule 3.1345(a), (c) and the instant motion cannot be considered because of said violations. However, as discussed above, the court finds Cannata’s Separate Statement complies for the instant purposes. The Separate Statement is made for the convenience of the court. Cannata presents the deposition question and the response in the Separate Statement. Cannata also presents their reasons for finding Plaintiffs’ counsel’s instructions improper and/or frivolous, Plaintiffs’ response to the meet and confer efforts, and their rebuttal to Plaintiffs’ response. Moreover, the court notes Plaintiffs provides zero legal authority for the proposition that an insufficient Separate Statement is jurisdictional. As noted by Cannata, CRC Rule 2.118(c) provides the court may permit the filing of papers that do not comply for good cause. The court finds good cause here.

Moreover, Plaintiffs contend Cannata’s Motion to Compel fails to identify a specific deposition question or a specific PMQ answer that he is seeking a further response to. Plaintiffs further contend if they are seeking information beyond deposition questions related to Jasmine Barash, the confidential information of third persons are also entitled to privacy.

The court finds Cannata has sufficiently established exactly what he seeks further responses to. Cannata points to several questions at the last deposition Plaintiffs refused to answer in not only in his Separate Statement, but also his Notice of Motion. As for Plaintiffs’ privacy objections, the court finds the objections are without merit. Plaintiffs generally cite to cases regarding third party’s right to privacy. However, the court finds Cannata’s inquiries is not into “sensitive information ordinarily found in personnel files, such as evaluation of the person's work . . . . income information, employment contracts and the like.” (Alch v. Superior Court (2008) 165 Cal.App.4th 1412, 1433.) Cannata has demonstrated such information could lead to admissible evidence. Moreover, as noted by Cannata, the case Plaintiffs rely upon for the notion the person whose privacy is involved must be given notice is a consumer case. Even so, according to Valley Bank of Nevada, it is up to Plaintiffs to provide notice to not only Jasmine Barash but other “employees” of Plaintiffs. (See Valley Bank of Nevada v. Superior Court (1975) 15 Cal.3d 652, 658.)

Next, Plaintiffs, again, contend Cannata’s Motion to Compel fails to identify a specific deposition question or a specific PMQ answer that he is seeking a further response to. The court notes Plaintiffs make this same argument going forward. Plaintiffs also contend Cannata has not established any good cause for the document production he seeks through this Motion, it is unclear what communications with Hartford Fire Insurance is at issue, and Plaintiffs’ have established that the equipment stolen by Mr. Cannata was not owned by LTWR.

As noted by Cannata, it is the burden of the objecting party to lay foundation for the objection. Moreover, there is no good cause requirement of Code of Civil Procedure section 2025.480, which is the section Cannata moves under. Code of Civil Procedure section 2025.450, which Plaintiffs refer to, requires a showing of good cause when a party fails to appear for a deposition, or to proceed with it, or to produce for inspection any document, electronically stored information, or tangible thing described in the deposition notice. Here, Cannata is compelling Plaintiffs to answer and produce documents after appearing at the deposition.

As for the objection on the grounds of attorney-client privilege, Plaintiffs did not raise such objections at the deposition. As such, Plaintiffs cannot raise it now in opposition. Lastly, if no claims were made through LTWR, they must state so in their deposition.

Next, Plaintiffs contend Cannata cannot obtain a further response regarding the value of LTWR’s equipment stolen, or allowed to be stolen, by him because the equipment was owned by Buddy. Plaintiffs argue any questions directed at LTWR’s PMQ regarding depreciation, value or “replacement value damages” are not within his or her personal knowledge at the time of the deposition. Although the court finds Mr. Kay has stated on various occasions Buddy is one of his corporations that he has worked scrupulously to maintain legal separateness, the proper PMQ must be deposed regarding Buddy. That deposition can be set for the same day and place.

Moreover, Plaintiffs contend LTWR’s PMQ cannot be required to give a narrative answer based on the expression of nothing more than a defense theory in regards to questions regarding whether the equipment was accessible by other employees that Plaintiffs have sued and/or accused of dishonesty. However, the court finds the objection improper. Cannata is allowed to seek discovery into issues that is relevant, admissible or reasonably calculated to lead to the discovery of admissible evidence. For the same reasons provided above, there is no serious invasion of privacy.

Lastly, Plaintiffs contend Cannata is not entitled to LTWR’s Sprint-Nextel Tender Documents because Cannata has not shown good cause and Cannata’s Motion to says nothing about why the sought after Sprint-Nextel Tender documents are relevant, admissible or reasonably calculated to lead to the discovery of admissible evidence. As noted above, Cannata is not required to show good cause. Moreover, Cannata has shown the documents regarding Sprint-Nextel are relevant. As noted, they are relevant to LTWR’s own estimations regarding the number of pieces of deployed 800 Mhz equipment and could lead to the discovery of admissible evidence.

Plaintiffs contend that if the court grants the motion, they request that any further deposition be conducted in writing given the current COVID-19 pandemic and the threat to physical health traveling represents as Mr. Kay is a resident of Nevada, over the age of 60, and has concerns over the current pandemic.

The court denies the request for the deposition to be conducted in writing, as not at all equivalent to a deposition and more likely to be prepared by counsel than the witness. In light of the pandemic, however, the court does agree that the deposition will be conducted through remote video conference.

Sanctions

Plaintiffs request monetary sanctions in the amount of $4,995.00. against Cannata and his counsel of record for their ongoing misuse and abuse of the discovery process with regard to the instant motion.

Code of Civil Procedure section 2025.480(j) states in relevant part: “The court shall impose a monetary sanction under Chapter 7 (commencing with Section 2023.010) against any party, person, or attorney who unsuccessfully makes or oppose... a motion to compel an answer or production....”

The court finds sanctions unwarranted. Cannata successfully made a motion compelling an answer or production. Although there were issues with the March 27, 2020/March 30, 2020 filing, it appears Plaintiffs were aware of Cannata’s motion to seek relief and still filed an opposition to the motion to compel. Moreover, as noted by Cannata, the arguments in the first opposition and the instant opposition are largely the same in that Plaintiffs contend Cannata’s Separate Statement is not code compliant. Based on the foregoing, the court finds Plaintiffs’ claims insufficient to warrant sanctions.

The court notes Cannata reserves the issue of sanctions for another motion. Cannata is free to make a motion for sanctions if he chooses.

Case Number: LC106864    Hearing Date: August 05, 2020    Dept: W

lucky’s two-way radios, inc. et al., v. cannata

motion to compel further discovery responses, motion for relief from default, and motion for leave to file a second amended complaint

Date of Hearing: August 5, 2020 Trial Date: None set.

Department: W Case No.: LC106864

BACKGROUND

Plaintiffs Lucky’s Two-Way Radios, Inc. and Buddy Corporation (“LTWR”) allege that Frank J. Cannata (“Cannata”) was a consultant for Plaintiffs’ business pursuant to a consulting services agreement. While consulting for Plaintiffs, Cannata allowed or arranged for valuable company property to be taken by “Mr. Recycling” without Plaintiffs’ consent. Plaintiff further claims that on December 8, 2017, Cannata improperly transferred proprietary information via e-mail to personal accounts. Plaintiff alleges a loss of $500,000 in property.

Plaintiffs filed a complaint on February 13, 2018. The First Amended Complaint (“FAC”) was filed on February 21, 2018, alleging:

1. Breach of Contract

2. Conversion

3. Breach of Fiduciary Duty

4. Fraud and Fraudulent Concealment

5. Specific Performance

6. Permanent Injunction

On March 29, 2019, the court granted Cannata’s motion for leave to file a cross-complaint. Cannata filed the first amended cross-complaint against Plaintiffs Lucky’s Two-Way Radios, Inc. and Buddy Corporation on April 10, 2019.

Cannata filed a second amended cross-complaint (“SAXC”) on August 2, 2019. The SAXC against Cross-Defendants alleges several causes of action including breach of contract, indemnity, labor code retaliation and wage and hour violations, false pretenses, fraud, battery, stored communications violations, trespass, and unfair competition.

[Tentative] Ruling

1. Defendant/Cross-Complainant Frank J. Cannatas Motion to Set Aside is MOOT.

2. Defendant/Cross-Complainant Frank J. Cannata’s Motion to Compel Further Deposition Responses is CONTINUED.

3. Plaintiff/Cross-Defendant Lucky’s Two-Way Radios, Inc.’s Motion for Leave to Amend is GRANTED.

discussion

1. DEFENDANT/CROSS-COMPLAINANT FRANK J. CANNATA’S MOTION TO SET ASIDE DEFAULT

Defendant/Cross-Complainant Frank J. Cannata moves for an order deeming his March 27, 2020 Motion to Compel Further Deposition Reponses timely filed. In the alternative, Cannata seeks relief from default so that the motion may be considered on the merits.

Evidentiary Objections

LTWR makes several evidentiary objections to the unsigned Declaration of Levi Lesches in support of their Opposition to Cannata’s Motion to Set Aside Default. LTWR first objects to the declaration of Levi Lesches on the grounds it is not signed. Because the declaration is unsigned, it is inadmissible as reliable evidence. (See ViaView, Inc. v. Retzlaff (2016) 1 Cal.App.5th 198, 217; Kulshrestha v. First Union Commercial Corp. (2004) 33 Cal.4th 601, 601-11; see also CCP §2015.5.)

As such, the general evidentiary objection to the Declaration of Levi Lesches is sustained in its entirety and the court need not rule on LTWR’s other objections.

In Reply, Counsel Levi Lesches submits a new, signed declaration explaining he had inadvertently filed the incorrect declaration. Counsel Levi Lesches also attaches new exhibits not previously submitted in the first declaration. “The general rule of motion practice, which applies here, is that new evidence is not permitted with reply papers.” (Jay v. Mahaffey (2013) 218 cal.app.4th 1522, 1537.) As such, the court disregards the new declaration as it is not the same declaration and contains new exhibits.

Discussion

Cannata first contends the clerk had no discretion in rejecting the timely filed March, 27, 2020 Motion to Compel Further. (See Rojas v. Cutsforth (1998) 79 Cal.Rptr.2d 292, 293 holding “The functions of the clerk are purely ministerial ....”; see also Mito v. Temple Recyclling Center Corp. (2010) 187 Cal.App.4th 276 and Carlson v. State of California Department of Fish & Game (1998) 68 Cal.App.4th 1268.)

In opposition, LTWR does not object to this proposition. Rather, LTWR agrees that court clerk had no authority to deny Mr. Cannata’s March 27, 2020, filing and, as such, agree that it and all of the supporting documents attached thereto were timely filed. LTWR contends, however, simply because they were timely filed does not mean Mr. Cannata’s corrected documents filed three days later relate back to the March 27, 2020, filing or may be considered timely filed by this court or considered by this court when ruling on the Motion to Compel.

The court agrees the Motion to Compel Further Responses should not have been rejected. “Rejection of the petition by the clerk ... for a technical defect cannot undo a ‘filing’ that has already occurred.” (Carlson, supra, 68 Cal.App.4th at p. 1273.) As such, the court does not reach the merits of Cannata’s other arguments. As for the declaration and attached exhibits, the March 27, 2020 exhibits are not before the court. Moreover, Cannata contends no declaration was necessary in the March 27, 2020 filing and as such the motion, the separate statement, and the supporting exhibits were all timely filed.

Code of Civil Procedure section 2025.480(h) provides “Not less than five days prior to the hearing on this motion, the moving party shall lodge with the court a certified copy of any parts of the stenographic transcript of the deposition that are relevant to the motion.” As such, the transcript is timely. The other exhibits in the March 30, 2020 Declaration are the Meet and Confer efforts and agreement to extend the filing deadline. The court therefore need not consider those exhibits in hearing the Motion to Compel Further.

Based on the foregoing, Cannata’s motion is MOOT as the court determines that the motion was timely filed on March 27, 2020.

2. DEFENDANT/CROSS-COMPLAINANT FRANK J. CANNATA’S MOTION TO COMPEL FURTHER DEPOSITION RESPONSES

Cannata moves this court for an order requiring (1) LTWR to answer further deposition questions relating to the topics of: (a) its contractual relationship to its other officers; (b) its tender to Hartford Fire Insurance, and/or other insurance companies, regarding the equipment at issue; (c) how LTWR valued the equipment on its financials; (d) LTWR’s anticipated reuse of the equipment; and (e) informal claims and legal claims of theft, and the like, raised by LTWR against other employees with access to the uninventoried equipment at issue; (2) LTWR to produce all documents relating to: (a) its tender to Hartford Fire Insurance, and/or other insurance companies, regarding the equipment at issue; and (b) its submissions to Sprint–Nextel, and/or the 800 MHz Transition Administrator, regarding the costs of rebanding the equipment at issue; (3) Buddy to appear for its PMQ deposition on the same date as LTWR’s continued deposition; and (4) Requiring the Parties to Meet & Confer regarding mutually agreeable dates for the continued deposition, and then submit those dates to the Court so that the Court can specify a date it will be available to confer regarding issues arising at deposition.

Request for Judicial Notice

Cannata requests this court take judicial notice of (1) the December 16, 2019 Declaration of Frank J. Cannata (Exh. A); (2) February 7, 2020 Official Transcript of Proceedings (Exh. B); and (3) November 19, 2020 Official Transcript of Proceedings (Exh. C).

The court takes judicial notice of the declaration and that the hearings occurred. However, the truth of matters asserted in the documents is not subject to judicial notice. (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882.) Cannata does not specify what, if any “indisputable facts” from the hearing may be accepted as true.

Discussion

Cannata moves for on order compelling James A. Kay, Jr., the designated Person Most Qualified for LTWR to appear for further deposition at a time when the court will be available to field questions from Counsel. Cannata further moves for an order requiring Buddy’s PMQ to appear for deposition at the same time as LTWR’s further deposition.

LTWR opposes the motion on the grounds it is vague, ambiguous and fails to comply with the notice requirements of Code of Civil Procedure section 1010 and CRC 3.1110. Specifically, LTWR claims given the pending motion for relief from default and its potential effect on the March 27, 2020 motion, LTWR cannot determine which motion to compel, the one filed on March 27 or the one filed on March 30, 2020, will be heard on August 5, 2020.

The court continues the matter for LTWR to properly address the issues in the motion to compel further. As discussed above, the March 27, 2020 motion was properly filed. As for the transcript, it was filed at least 5 days before the hearing on the motion.

Based on the foregoing, the court continues the matter.

3. LUCKY’S TWO-WAY RADIOS INC. AND BUDDY CORPORATION’S MOTION FOR LEAVE TO AMEND TO FILE SECOND AMENDED COMPLAINT

LTWR moves the court for an order granting Plaintiffs leave to file a SAC and the proposed SAC submitted with this motion be deemed filed and served upon Defendant/Cross-Defendant Frank J. Cannata.

Request for Judicial Notice

Cannata requests this court take judicial notice of the following: (1) March 20, 2018 Declaration of James A. Kay, Jr. iso Motion for Preliminary Injunction (Exh. A); (2) February 21, 2020 Declaration of Angela M. Rossi (Exh. B); (3) December 8, 2019 Declaration of James A. Kay, Jr. iso Opposition for Summary Adjudication (Exh. C); (4) April 3, 2018 Declaration of James A. Kay, Jr. iso Motion for Preliminary Injunction (Exh. D); (5) December 19, 2019 Declaration of Levi Lesches iso Reply iso Motion for Summary Adjudication (Exh. E); (6) December 17, 2019 Declaration of Levi Lesches iso Reply iso Motion for Preliminary Injunction (Exh. F); and (7) February 27, 2020 Reply iso Motion for Leave to Make Doe Amendments (Exh. G).

As these materials reflect documents within the court records, which are properly subject to judicial notice, the court grants Cannata’s request for judicial notice as to the existence of these documents. The truth of allegations made in these court documents are not judicially noticeable.

LTWR requests this court take judicial notice of Rules of Professional Conduct, Rule 3.10. (Exh. 1.) LTWR’s request for judicial notice is granted. (See Evid. Code §451(b).)

Discussion

LTWR moves the court for an order granting LTWR leave to file a Second Amended Complaint (“SAC”) and that the proposed SAC submitted with this motion be deemed filed and served upon Cannata.

The courts have a strong policy of allowing motions for leave to amend. “If the motion to amend is timely made and the granting of the motion will not prejudice the opposing party, it is error to refuse permission to amend….” (Morgan v. Sup. Ct. (1959) 172 Cal.App.2d 527.) A court can deny leave to amend after long, inexcusable delay, where there is cognizable prejudice, such as discovery needed, trial delay, critical evidence lost, or added preparation expense. (Solit v. Tokai Bank (1999) 68 Cal.App.4th 1435, 1448; Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761; Green v. Rancho Santa Margarita Mortgage Co. (1994) 28 Cal.App.4th 686, 692; Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 487.) Notably, “it is not required to accept an amended complaint that is not filed in good faith, is frivolous, or sham.” (American Advertising & Sales Co. v. Mid-Western (1984) 152 Cal.App.3d 875, 878.)

Specifically, LTWR requests to file the SAC as LTWR believes the FAC as pled is factually confusing, inconsistent and does not provide sufficient separation between what each Plaintiff intended to allege as facts with regard to Mr. Cannata’s interaction.

Cannata opposes the motion on several grounds including: (1) Plaintiffs’ new pleading attempts to substantially revise the theory of the case after two years of litigation; (2) Plaintiffs’ proposed pleading raises allegations that are contradicted by Plaintiffs’ prior declarations, verified discovery responses, deposition testimony, and pleadings; (3) the Rossi Declaration fails to furnish the mandatory showing required under Rule 3.1324(b); (4) it is not explained what or who “The Organization” is, what it does, or where “The Organization” has been all this time; (5) the amendments seek to contradict verified discovery responses; and (6) the proposed amendments are contradicted by the instrument appended to the proposed pleading.

First, Cannata opposes on the grounds the motion fails to comply with CRC Rule 3.1324. Specifically, Cannata contends LTWR’s declaration does not explain the “effect of the amendment,” why the proposed amendments are “necessary,” or when the facts “giving rise to the amended allegations were discovered.” Moreover, Cannata contends LTWR made no attempt to amend for over six months.

However, the court finds Plaintiffs have substantially complied with CRC Rule 3.1324. Plaintiffs have included a copy of the proposed amended pleading, which is red-lined with allegations Plaintiffs propose to be deleted from the previous pleading as well as allegations that are to be added to the previous pleading. (CRC Rule 3.1324(a).) The declaration of Plaintiffs’ counsel claims the proposed amendment clarifies the facts and the issues alleged so that Plaintiffs can seek summary judgment/adjudication and is necessary as it became apparent to Plaintiffs that the FAC as pled was confusing and inconsistent and failed to provide sufficient separation between what each Plaintiff intended to allege as facts with regard to Defendant, Mr. Cannata’s interaction or inactions. (CRC Rule 3.1324(b)(1),(2).) Further, Plaintiffs’ counsel claims Plaintiffs discovered the facts giving rise to the amended allegations in August 2019 and November 2019 after Cannata filed his Motion for Summary Adjudication and Motion for Preliminary Injunction and as such, could not request for an amendment earlier. (CRC Rule 3.1324(b)(3),(4).)

Although Plaintiff waited six months to file the proposed amended complaint, the court does not find the delay to have been prejudicial to Cannata. Moreover, any claims that the causes of action are unclear as to what Plaintiff is asserting are merit based and Cannata is free to make merit based arguments on a demurrer, summary judgment, or the like.

Second, Cannata opposes the motion on the grounds Plaintiffs’ proposed pleading is a sham and an attempt at trifling with the courts. Specifically, Cannata contends Plaintiffs have alleged, declared, testified to, and stated in verified discovery, that LTWR and Buddy hired and/or contracted with Cannata. Now, Cannata claims Plaintiffs are saying The Organization contracted with Cannata.

“Generally, after an amended pleading has been filed, courts will disregard the original pleading.” (Larson v. UHS of Rancho Springs, Inc. (2014) 230 Cal.App.4th 336, 343 (internal citations omitted).) However, the sham pleading doctrine is an exception to this rule. A complaint is considered a “sham” pleading if the amendment contains allegations that contradict the earlier pleading or that omit previously pled facts that rendered the initial complaint deficient. (Owens v. Kings Supermarket (1988) 198 Cal.App.3d 379, 383-84.) Any inconsistencies with prior pleadings must be explained; if the pleader fails to do so, the court may disregard the inconsistent allegations. Accordingly, a court is not bound to accept as true allegations contrary to the factual allegations in former pleading in the same case. (Larson, supra, 230 Cal.App.4th at 343 (internal citations omitted).) However, the sham pleading doctrine, “does not exist in a vacuum and cannot be mechanically applied.” (Berman v. Bromberg (1997) 56 Cal.App.4th 936, 946, quoting Contreras v. Blue Cross of California (1988) 199 Cal.App.3d 945, 950.)

The court finds Cannata has not demonstrated that the new allegations in the proposed SAC contradict or are otherwise pleaded to purposefully avoid a material defect with its claims. Plaintiffs’ FAC alleges LTWR “provides business administration services such as payroll for the benefit of a family of related companies, including Buddy Corporation and Comm Enterprises, LLC dba Southland Communications. (FAC ¶1.) LTWR provides services for the benefit of a group of legally distinct but related companies, (the “Organization”). Although it is not clear who the Organization is – only Buddy Corporation and Comm Enterprises, or other companies as well – this does not indicate that LTWR has filed a sham pleading as it could be the possibility that the Organization includes LTWR and Buddy Corporation, which is what LTWR has previously “alleged, declared, testified to, and stated in verified discovery.” (Opp. 8:19-20.) Similarly, alleging Plaintiffs have “performed all promises, conditions, and covenants on its part to be performed pursuant to the NDA” and as a result of Cannata’s breach of the NDA, Plaintiffs have incurred attorney fees and costs does not contradict LTWR’s original pleadings. Moreover, LTWR specifically alleges in the fourth cause of action that LTWR is entitled to specific performance of the terms, conditions, and provisions of the NDA. (FAC ¶49.) Any defects regarding clarity should be dealt with on demurrer.

Third, Cannata contends the declaration filed in support of the motion for leave to amend is not only procedurally deficient, but also appears to constitute prima facie perjury under Code of Civil Procedure section 118a. Specifically, Cannata argues counsel for Plaintiffs has submitted contrary declarations in this matter, less than five months apart. However, review of the declarations does not illustrate prima facie perjury. In each declaration by Plaintiff’s counsel has testified that based on the evidence before her, Mr. Kay was acting on behalf of LTWR and Buddy Corporation when he hired Cannata. Moreover, any communications between Mr. Kay and Cannata were on behalf of both entities. Plaintiff’s counsel now simply states they felt the FAC was confusing and includes in the proposed amendment that LTWR provided services to the Organization and Cannata was an independent contractor of the Organization. As discussed above, although the court finds the definition of the Organization vague, Plaintiffs’ counsel has not made contradictory, misleading, or false statements. The Organization includes at least the Buddy Corporation and Southland Communications, which have been part of Plaintiffs’ allegations and testified to by Plaintiffs’ counsel.

Fourth, Cananta contends Plaintiffs proposed amendments fundamentally alter Plaintiffs’ theory of the case. Specifically, Cannata argues the last two years Plaintiffs have claimed they had direct contract claims against Cannata but now, they are relying on an indemnity claim by asserting the Organization contracted with Cannata. Cannata also argues Plaintiffs do not attempt adding the Organization as a party, which means that the named Plaintiffs are proceeding on third-party beneficiary theories. However, while Plaintiffs are alleging the Organization hired Defendant Cannata to provide consulting services, the Organization includes LTWR and Buddy Corporation. While it may be unclear whether this includes other companies managed by Mr. Kay, this does not alter the theory. “California law permits third party beneficiaries to enforce the terms of a contract made for their benefit.” (Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1021 [citing Civ. Code, § 1559].) Plaintiffs are not attempting to allege LTWR or Buddy Corporation entered into a contract for the benefit of the Organization. Moreover, as discussed above, the court does not find the delay to have been prejudicial on Cannata. Cannata has not also demonstrated how the proposed amendments will require further discovery. (See Green v. Rancho Santa Margarita Mortgage Co. (1994) 28 Cal.App.4th 686, 692.) Moreover, any discovery into the organization, control, operations or oversight of “The Organization” can be completed in the next six months, given that no jury trials will commence before 2021 in light of the ongoing Coronavirus pandemic.

Fifth, Cannata argues there are prior discovery responses contradicting the proposed amendments. The court notes Cannata does not provide which discovery responses are contradicted by the proposed amendments. Assuming it is discovery responses in which Plaintiffs responded that LTWR and Buddy hired and/or contracted with Cannata, as discussed above, the court finds the proposed amendment does not squarely contradict the verified discovery responses. To the extent that Cannata wants to exploit the seemingly ever-shifting definition of which entity hired him and his role in this complex of businesses, he will be given free rein to do so at trial. Moreover, the court finds Code of Civil Procedure section 2030.310 inapplicable here as subdivision (a) merely provides the propounding party may use the initial response and the responding party may use its supplemental response at trial. There is no indication that Plaintiff provided supplemental responses. As for subdivision (b), Cannata has not moved this court to bind Plaintiffs’ “initial” response, if there is one.

Lastly, Cannata argues the court’s order should clarify that there is no judicial estoppel against Cannata. However, as the court grants Plaintiffs’ motion, this argument is moot.

Based on the foregoing, the court grants Plaintiffs’ Motion for Leave to Amend to File a Second Amended Complaint.

Case Number: LC106864    Hearing Date: July 15, 2020    Dept: W

lucky’s two-way radios, inc. et al., v. cannata

motions to compel discovery

Date of Hearing: July 15, 2020 Trial Date: January 11, 2021

Department: W Case No.: LC106864

Moving Party: Plaintiffs/Cross-Defendants Lucky’s Two-Way Radios Inc. and Buddy Corporation

Responding Party: Defendant/Cross-Complainant Frank J. Cannata

BACKGROUND

Plaintiffs Lucky’s Two-Way Radios, Inc. and Buddy Corporation (“LTWR”) allege that Frank J. Cannata (“Cannata”) was a consultant for Plaintiffs’ business pursuant to a consulting services agreement. While consulting for Plaintiffs, Cannata allowed or arranged for valuable company property to be taken by “Mr. Recycling” without Plaintiffs’ consent. Plaintiff further claims that on December 8, 2017, Cannata improperly transferred proprietary information via e-mail to personal accounts. Plaintiff alleges a loss of $500,000 in property.

Plaintiffs filed a complaint on February 13, 2018. The First Amended Complaint (“FAC”) was filed on February 21, 2018, alleging:

1. Breach of Contract

2. Conversion

3. Breach of Fiduciary Duty

4. Fraud and Fraudulent Concealment

5. Specific Performance

6. Permanent Injunction

On March 29, 2019, the court granted Cannata’s motion for leave to file a cross-complaint. Cannata filed the first amended cross-complaint against Plaintiffs Lucky’s Two-Way Radios, Inc. and Buddy Corporation on April 10, 2019.

Cannata filed a second amended cross-complaint (“SAXC”) on August 2, 2019. The SAXC against Cross-Defendants alleges several causes of action including breach of contract, indemnity, labor code retaliation and wage and hour violations, false pretenses, fraud, battery, stored communications violations, trespass, and unfair competition.

[Tentative] Ruling

LTWR’s Motion to Compel Discovery is GRANTED, if Cannata has not served code-compliant responses by the date of this hearing.

request for judicial notice & evidentiary objections

LTWR requests this court take judicial notice of 1) Frank J. Cannata’s Ex Parte Application to Extend Discovery Deadlines on February 4, 2020; and 2) Frank J. Cannata’s IDC Brief held on February 7, 2020.

As these materials reflect court records, which are properly subject to judicial notice, the court grants LTWR’s request for judicial notice as to the existence of these documents. The truth of allegations made in these court documents are not judicially noticeable.

LTWR makes objections to the Declaration of Levi Lesches and Cannata’s Request for Judicial Notice in support of its Opposition to LTWR’s Motions to Compel Responses to Judicial Council Form Interrogatories (Set Two), Special Interrogatories (Set Four), and Request for Production of Documents (Set Four).

As to the evidentiary objections to the request for judicial notice, the court overrules the objections. As to LTWR’s objections to the declaration of Levi Lesches, the court overrules those objections as well.

discussion

LTWR moves this court to compel Cannata’s responses to LTWR’s Judicial Form Interrogatories (Set Two), Special Interrogatories (Set Four) (collectively “Interrogatories”), and Request for Production of Documents (Set Four).

It is well-settled that “unsworn responses are tantamount to no responses at all.” (Appleton v. Superior Court (1988) 206 Cal.App.3d 632, 636; Zorro Inv. Co. v. Great Pacific Securities Corp. (1977) 69 Cal.App.3d 907, 914.) Where a party fails to serve timely responses to discovery requests, the court may make an order compelling responses. (CCP §§2030.290, 2031.300 2033.280; Sinaiko Healthcare Consulting, Inc. v. Pacific Healthcare Consultants (2007) 148 Cal.App.4th 390, 403.) A party that fails to serve timely responses waives any objections to the request, including ones based on privilege or the protection of attorney work product. (CCP §§2030.290(a), 2031.300(a), 2033.280(a).) Unlike a motion to compel further responses, a motion to compel responses is not subject to a 45-day time limit and the propounding party has no meet and confer obligations. (Sinaiko Healthcare Consulting, Inc., supra, 148 Cal.App.4th at p. 404.)

LTWR contends it properly served Cannata with the Interrogatories and Requests for Production of Documents on January 6, 2020, thereby making Cannata’s responses due no later than February 7, 2020. (Rossi Decl. ¶2, Exh. A.) At Cannata’s Ex Parte Application to Extend Discovery Deadlines on February 4, 2020, Cannata sought to defer responses to these discovery requests until after the March 3, 2020 hearing on the Motion to Bifurcate. (Rossi Decl. ¶4, RJN.) This court granted an extension until February 14, 2020. (Rossi Decl. ¶5.) Later, at an IDC held on February 7, 2020, Cannata sought a protective order with regard to the Interrogatories and Request for Production of Documents, which this court denied. (Rossi Decl. ¶6, Exh. B.) Then on February 11, 2020, Cannata’s counsel emailed LTWR’s counsel asking for “electronic format copies of the discovery,” which LTWR ultimately provided. (Rossi ¶7, Exh. C.) Cannata’s counsel then sent a letter address multiple topics, including requesting an extension of time to respond. (Rossi ¶8, Exh. D.) LTWR stipulated to the extension, giving Cannata until February 21, 2020 to respond to the discovery requests. (Rossi Decl. ¶9, Exh. E.) On February 21, 2020, Cannata sent unverified “responses” to these discovery requests, which mostly provided that Cannata “shall diligently provide additional responses before March 6, 2020.” (Rossi Decl. ¶10, Exh. F.) On March 4, 2020, Cannata’s counsel then sent an email stating which requests he would provide supplemental responses. (Rossi Decl. ¶11, Exh. G.)

As such, LTWR argues, Cannata abused the discovery process and has violated Code of Civil Procedure sections 2031.300 and 2030.280 by failing to timely respond and all objections to LTWR’s requests are therefore waived.

In opposition, Cannata argues LTWR’s position is unreasonable as LTWR is essentially seeking sanctions against a solo practitioner’s inability to instantly respond to 174 written interrogatories and 30 requests for production of documents, all of which was simultaneously served. Moreover, Cannata argues the motion is moot because Cannata’s counsel shall furnish such responses to LTWR more than seven days before the hearing on this motion and will file a declaration when all responses are completed.

The court notes as of the date of the hearing, Cannata has not apprised this court of whether it has served proper responses to LTWR’s discovery requests. Moreover, LTWR’s Reply filed on July 8, 2020 states the motion is not moot as Cannata has failed and refused and continues to produce verified responses to LTWR’s written discovery.

Regardless, if the court finds Cannata has served compliant responses before the hearing on this motion, the court may relieve Cannata from waiver of any objection. (CCP§§2030.290(a)(1); 2031.300(a).) If the court finds Cannata failed to do as much, Cannata is ordered to provide code-compliant responses to LTWR’s Interrogatories and Requests for Production.

Additionally, review of Cannata’s unverified February 21, 2020 responses indicates they have provided some objections to the discovery requests. As such, the court finds Cannata has not waived those objections. However, Cannata will have waived objections not raised in its initial February 21, 2020 responses if the court finds Cannata did not serve code compliant responses before the hearing on this motion.

Sanctions

LTWR seeks sanctions in the amount of $6,520.00, jointly and severally against Cannata and his attorney of record, Lesches Law, on the grounds Cannata has delayed, obstructed, and failed to provide responses without justification.

Counsel for LTWR, Angela Rossi, declares she spent 10 hours regarding the Motion to Compel Responses to LTWR’s Interrogatories plus a filing fee and 6 hours regarding the Motion to Compel Responses to LTWR’s Request for Production of Documents plus a filing fee. Rossi’s hourly rate is $400. (Rossi Decl. ¶13.)

In opposition, Cannata argues the requests for sanctions should be denied in their entirety because 1) LTWR failed to meet and confer in good faith; 2) the notice of sanctions is defective; and 3) case law precludes sanctions.

Regarding LTWR’s meet and confer efforts, Cannata claims the bare fact that this court refused to grant an oral motion for a protective order did not automatically relieve LTWR of its obligation to reasonably confer about a reasonable schedule for furnishing responses to hundreds of written interrogatories. Moreover, Cannata claims all of LTWR’S moving papers are signed March 6, 2020, when Cannata had initially intended to supplement responses. As such, LTWR was misusing the discovery process. The court disagrees.

LTWR initially propounded the discovery requests in January 2020. Throughout this time, it appears there has been several communications between counsel regarding the discovery responses including communications regarding extensions and an IDC. Although LTWR prepared the instant motion on March 6, 2020, the same day Cannata represented that it would serve supplemental responses by, the instant motion was not filed and served until March 11, 2020. Thus, it appears LTWR did wait for Cannata’s responses. Moreover, it is not clear how LTWR failed to “deliberate” over whether there was a substantial justification when Cannata had told LTWR it would serve supplemental responses.

Turning to the issue of notice, Cannata argues LTWR’s sanctions requests are not properly noticed and counsel’s declaration establishes that Cannata was not at fault. Here, Cannata’s counsel’s declaration does not necessarily support that a motion to compel was not necessary as LTWR has shown repeated attempts to have Cannata comply with the discovery requests.

Moreover, the court finds LTWR’s request for sanctions were properly noticed and properly provides her billing rate. (See Rossi Decl. ¶13.) The notice clearly states “Lucky's further moves for an Order compelling Cannata and/or his counsel Lesches Law, jointly and severally to pay Lucky's reasonable expenses in making this Motion, including attorney's fees and cost in the sum of $2,460.00” and “Lucky’s seeks an award of monetary sanctions in the amount of $4,060.00, awarded jointly and severally between Cannata and his counsel to be paid also within ten (10) days of the hearing on this matter.” This identifies every person, party, and attorney against whom the sanction is sought. (CCP §2023.040.)

Lastly, Cannata argues equality principle requires that this court apply the same standards against Cannata as this court applied in favor of LTWR in November 2018. Cannata contends the equality principle requires that “similarly situated litigants should be treated the same.” (James B. Beam Distilling Co. v. Georgia, 501 U.S. 529, 530 (1991).) Here, this court declined to enter sanctions against LTWR in Cannata’s Motion to Compel Request for Production of Documents. The court had overruled all objections by LTWR except an objection regarding privacy rights of third parties. As such, under the equality principal, Cannata is entitled to the same liberal standard.

Nonetheless, due to Cannata’s delays, which the court ultimately finds inexcusable, plaintiff LTWR has had to bring this motion to compel. The court finds that an award of sanctions is appropriate and orders fees in the amount of $2800 awarded against Cannata and his counsel, jointly and severally, to be paid within 30 days. This is less than the amount requested by LTWR, but nonetheless a reasonable amount given that this was not a complex issue and the court does not believe the time spent at the IDC should be recovered.

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