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1 Collin J. Vierra (State Bar No. 322720)
EIMER STAHL LLP
2 99 Almaden Blvd., Suite 641
San Jose, CA 95113-1605
3 Telephone: (408) 889-1668
4 Email: cvierra@eimerstahl.com
5 Attorney for Plaintiffs
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7 SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN MATEO
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Robert Arntsen; Mary Lee; Arntsen Family Case No. 22-CIV-01148
10 Partnership, LP; and Brian Christopher Dunn
Custodianship; Date: September 16, 2022
11 Time: 9:00am
12 Plaintiffs, Dept. 21
v.
13 Hon. Robert D. Foiles
David M. Bragg; Kurtis Stuart Kludt; Silicon
14 Valley Real Ventures LLC; SVRV 385 NOTICE OF MOTION AND MOTION
Moore, LLC; SVRV 387 Moore, LLC; TO COMPEL AND FOR SANCTIONS
15 Gregory J. Davis; Kevin Wolfe; James AGAINST DEFENDANTS DAVID M.
16 Justesen; Paramont Woodside, LLC; and BRAGG, KURTIS S. KLUDT, AND
Paramont Capital, LLC; SILICON VALLEY REAL VENTURES,
17 LLC, AND ATTORNEY RYAN VAN
Defendants. STEENIS, AND MEMORANDUM IN
18 SUPPORT
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NOTICE OF MOTION AND MOTION TO COMPEL AND FOR SANCTIONS
1 TO ALL PARTIES AND THEIR COUNSEL OF RECORD:
2 PLEASE TAKE NOTICE, that on September 16, 2022 1 at 9:00am, or as soon thereafter
as the matter may be heard, in Department 21, located in the San Mateo Superior Court, before
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the Honorable Robert D. Foiles, Plaintiffs Robert Arntsen, Mary Lee, Arntsen Family
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Partnership, LP, and Brian Cristopher Dunn Custodianship (“Plaintiffs”), pursuant to Code of
5 Civil Procedure section 2023.030 and this Court’s Local Rules, will and hereby do move the
6 Court for an Order to compel Defendants Davis M. Bragg (“Bragg”) and Silicon Valley Real
7 Ventures, LLC (“SVRV) to answer Plaintiffs’ requests for documents and special interrogatories
8 and to compel Defendant Kurtis S. Kludt (“Kludt”) to answer Plaintiffs’ requests for documents.
Plaintiffs further move for monetary sanctions against Bragg, SVRV, Kludt, and Bragg’s and
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SVRV’s attorney, Mr. Ryan Van Steenis (“Van Steenis), for their abuses of the discovery
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process.
11 This Motion is brought on the grounds that Defendants Bragg, SVRV, and Kludt have
12 refused to properly respond to Plaintiffs’ discovery demands, and that Van Steenis has refused to
13 meet and confer with Plaintiffs, in flagrant violation of California law and this Court’s Rules.
14 These Defendants’ and Van Steenis’s abuses of the discovery process are materially prejudicing
Plaintiffs’ ability to litigate this case.
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Plaintiffs’ Motion is based upon this Notice of Motion, the accompanying Memorandum
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of Points and Authorities, the Declaration of Collin J. Vierra in support thereof, all pleading and
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papers filed with the Court, and any arguments and evidence that may be presented at the time of
18 hearing.
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20 Dated: August 23, 2022 By: ______________________
21 Collin J. Vierra
EIMER STAHL, LLP
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Attorney for Plaintiffs
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1 This court currently has two hearings scheduled for September 16, 2022, related to this case: first, a
25 hearing on the Paramont Defendants’ demurrer to Plaintiffs’ initial Complaint, and second, a hearing
on Plaintiffs’ previously-filed motion to compel and for sanctions against Defendants David M. Bragg
26 and Silicon Valley Real Ventures, LLC. Because this Motion addresses discovery-related misconduct
that is substantially related to that described in Plaintiffs’ previously filed motion to compel and for
27 sanctions, Plaintiffs ask that the hearing on this Motion be consolidated with the hearing on Plaintiffs’
previously filed motion. Further, because Plaintiffs have filed a First Amended Complaint, the hearing
28 on the Paramont Defendants’ demurrer should be taken off calendar.
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NOTICE OF MOTION AND MOTION TO COMPEL AND FOR SANCTIONS
1 Collin J. Vierra (State Bar No. 322720)
EIMER STAHL LLP
2 99 Almaden Blvd., Suite 641
San Jose, CA 95113-1605
3 Telephone: (408) 889-1668
4 Email: cvierra@eimerstahl.com
5 Attorney for Plaintiffs
6
7 SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN MATEO
8
9
Robert Arntsen; Mary Lee; Arntsen Family Case No. 22-CIV-01148
10 Partnership, LP; and Brian Christopher Dunn
Custodianship; Date: September 16, 2022
11 Time: 9:00am
12 Plaintiffs, Dept. 21
v.
13 Hon. Robert D. Foiles
David M. Bragg; Kurtis Stuart Kludt; Silicon
14 Valley Real Ventures LLC; SVRV 385 MEMORANDUM OF POINTS AND
Moore, LLC; SVRV 387 Moore, LLC; AUTHORITIES IN SUPPORT OF
15 Gregory J. Davis; Kevin Wolfe; James MOTION TO COMPEL AND FOR
16 Justesen; Paramont Woodside, LLC; and SANCTIONS AGAINST DEFENDANTS
Paramont Capital, LLC; DAVID M. BRAGG, KURTIS S. KLUDT,
17 AND SILICON VALLEY REAL
Defendants. VENTURES, LLC, AND ATTORNEY
18 RYAN VAN STEENIS
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 TABLE OF CONTENTS
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3 TABLE OF AUTHORITIES .......................................................................................................... 3
4 SUMMARY OF THE ARGUMENT ............................................................................................. 4
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BACKGROUND REGARDING DEFENDANTS’ DISCOVERY ABUSES ............................... 4
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BACKGROUND REGARDING GOOGLE DRIVE ..................................................................... 5
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MEET AND CONFER ATTEMPTS.............................................................................................. 5
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LEGAL STANDARD ..................................................................................................................... 6
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REASONS WHY SANCTIONS AND AN ORDER TO COMPEL ARE NECESSARY
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AGAINST BRAGG, KLUDT, SVRV, AND VAN STEENIS ...................................................... 7
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KLUDT ....................................................................................................................................... 8
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13 BRAGG, SVRV, AND VAN STEENIS .................................................................................. 13
14 REQUEST FOR SANCTIONS .................................................................................................... 17
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CONCLUSION ............................................................................................................................. 18
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 TABLE OF AUTHORITIES
2 Page(s)
3 CASES
4 Clement v. Alegre,
5 (2009) 177 Cal. App. 4th 1277 ................................................................................................... 7
6 Equal Emp. Opp. Comm’n v. M1 5100 Corp.,
7 (S.D. Fla. July 2, 2020) 2020 WL 3581372 ............................................................................... 7
Townsend v. Super. Ct.,
8
(1988) 61 Cal. App. 4th 1431 ..................................................................................................... 7
9
Vella v. Hudgins,
10 (1984) 151 Cal. App. 3d 515 .................................................................................................. 6, 7
11
OTHER AUTHORITIES
12
13 Claire-Lise Kutlay,
14 43-PAR L.A. Law. 3 ................................................................................................................... 7
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 SUMMARY OF THE ARGUMENT
2 Defendants Bragg, Kludt, and SVRV have been abusing the discovery process in this case
since day one.
3
Despite having received numerous requests for discovery, Bragg and SVRV have not
4
produced a single document and have refused to respond to most of Plaintiffs’ written discovery
5 requests. Meanwhile, their attorney, Ryan Van Steenis, has been in constant breach of California’s
6 discovery rules and California’s Rules of Professional Conduct. He has raised meritless objections
7 to Plainitffs’ discovery requests (when he has filed responses at all) and then eschewed Plaintiffs’
8 counsel’s repeated good faith attempts to meet and confer by refusing to respond to their emails.
Indeed, he did not even speak to Plaintiffs’ counsel for at least two months after first speaking with
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Bragg and SVRV about this case, even after his clients said he would reach out to Plaintiffs’
10
counsel, were threatened with an entry of default, were threatened with sanctions. He only
11 responded when he was threatened with sanctions personally.
12 Kludt admitted to Plaintiffs in March and April 2022 that he had numerous documents
13 relevant to this litigation. Despite promising he would produce them, he refused to do so. Plaintiffs’
14 counsel was forced to conduct an investigation in July 2022 that revealed that Kludt had access to
hundreds of relevant documents that he was refusing to produce, despite being served with formal
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discovery in May 2022. Even after Plaintiffs’ counsel shared links to these documents with Kludt’s
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attorney, Mark Poe, Kludt did not share these files with his own attorney for nearly a month. Kludt
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has produced some documents since then, but still has refused to produce password-protected
18 documents that Plaintiffs have proved exist, and links to which Plaintiffs shared with Kludt’s
19 counsel as early as July 10, 2022. Meanwhile, Kludt has refused to conduct a reasonable search
20 for responsive documents from other sources, including those that Plaintiffs have proved were
21 used to generate documents relevant to this litigation.
Evidence indicates not only that Bragg, Kludt, and SVRV are refusing to respond to
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Plaintiff’s discovery requests, but also that Bragg and Kludt have been withholding relevant
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documents from their own counsel. Nothing but sanctions can deter this flagrant misconduct.
24 BACKGROUND REGARDING DEFENDANTS’ DISCOVERY ABUSES
25 Plaintiffs previously filed a motion to compel and for sanctions against Defendants Bragg
26 and SVRV on July 12, 2020. Plaintiffs subsequently filed an application for an order to expedite
27 the hearing, and the Court granted that motion and moved the hearing to September 16, 2022.
Since then, not only have Bragg and SVRV failed to correct the conduct addressed in Plaintiffs’
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 previously filed motion, but Defendants Bragg and SVRV, and attorney Van Steenis, have engaged
2 in additional discovery misconduct. Plaintiffs have also learned additional facts about Bragg’s,
SVRV’s and Van Steenis’s discovery misconduct going back months.
3
Meanwhile, despite Plaintiffs’ counsel spending numerous hours trying to resolve ongoing
4
discovery disputes, Defendant Kludt has refused to properly respond to Plaintiffs’ discovery
5 requests, necessitating his inclusion in this Motion.
6 BACKGROUND REGARDING GOOGLE DRIVE
7 Bragg, SVRV, and Kludt primarily used Google Drive 2 to create and edit documents
8 relevant to this litigation, although they also used at minimum, Dropbox, Box 3, standard Microsoft
Office applications, QuickBooks, and other applications. It takes literally seconds for the owner of
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a Google Drive folder (or anyone else with sufficient permissions) to share the folder with someone
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else—one simply (1) clicks the “Share” button, (2) enters the email address with which they wish
11 to share the folder, and (3) clicks “Send” to confirm. Images showing the simplicity of this process
12 are attached as Appendix B.
13 Throughout this litigation, Plaintiffs have informed Bragg, SVRV, and Kludt that they
14 could comply with Plaintiffs’ discovery requests by simply sharing relevant Google Drive (and
similar) folders with Plaintiffs directly, which would obviate the need for Defendants to download
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and Bates stamp each document in the relevant folder. As a courtesy to Defendants, Plaintiffs have
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offered to bear the burden and expense of downloading, processing, Bates-stamping, and
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circulating these documents once they have been given access to the Google Drive folders. In
18 short, Defendants have been given the easiest possible method of producing relevant documents
19 from their Google Drive folders.
20 MEET AND CONFER ATTEMPTS
21 Plaintiffs’ counsel has sought to meet and confer with Defendants’ counsel about the issues
described in this Motion numerous times during the past several months, as described further
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below, to try to avoid having to bring this Motion. Bragg’s and SVRV’s counsel has largely refused
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to meet and confer at all. Despite exchanging several communications with Kludt’s counsel, the
24 issues with Kludt’s discovery responses have not been resolved, and show no signs that they will
25 be resolved without an order from this Court. (Vierra Decl. ¶ 4.)
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28 2 A brief, useful primer on Google Drive is available at https://tinyurl.com/m7ydb9e.
3 Box and Dropbox are services that operate substantially similarly to Google Drive.
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 LEGAL STANDARD
2 Under Code of Civil Procedure section 2023.010, “misuse of the discovery process”
includes, without limitation, “[f]ailing to respond or to submit to an authorized method of
3
discovery,” (subsection (d)), [m]aking, without substantial justification, an unmeritorious
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objection to discovery, (subsection (e)), “[m]aking an evasive response to discovery,” (subsection
5 (f)), and “[f]ailing to confer . . . in a reasonable and good faith attempt to resolve informally any
6 dispute concerning discovery, if the section governing a particular discovery Application requires
7 the filing of a declaration stating facts showing that an attempt at informal resolution has been
8 made” (subsection (i)). Section 2023.040 authorizes a party to bring a motion for sanctions where
an opposing party (or their attorney) has abused the discovery process. And section 2023.030
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requires courts to impose sanctions for misuses of the discovery process, subject only to narrow
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exceptions.
11 Specifically, subsection (a) of section 2023.030 authorizes the Court to “impose a monetary
12 sanction ordering that one engaging in the misuse of the discovery process . . . pay the reasonable
13 expenses, including attorneys’ fees, incurred by anyone as a result” of such conduct. The Court
14 “shall impose that sanction unless it finds that the one subject to the sanction acted with substantial
justification or that other circumstances make the imposition of the sanction unjust.” (Id. [emphasis
15
added]; see also CCP § 2031.300(c) [court “shall” impose sanctions with regard to inspection
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demands]; CCP § 2030.290(c) [same for interrogatories]; CCP § 2033.280(c) [same for requests
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for admission].)
18 “The amount to be awarded as attorneys’ fees is left to the sound discretion of the trial
19 court.” (Vella v. Hudgins (1984) 151 Cal. App. 3d 515, 522.) Courts may award attorneys’ fees
20 even if the attorney and his agents are operating under a contingency fee arrangement. (See id. at
21 521.) In determining the reasonableness of attorneys’ fees, courts may consider, inter alia, “the
number of hours spent” and the “reasonable hourly compensation for the attorney.” (Id.) In 2021,
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the national average billing rates for legal partners and associates were $729 and $535 per hour,
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respectively. (Andrew Maloney, Associate Billing Rates Are Growing Faster Than Partner Rates,
24 American Lawyer (Feb. 3, 2022), https://tinyurl.com/2p8scp28.) Associate billing rates were
25 slightly higher than the national average in San Francisco, at $536 per hour. (Id.)
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 REASONS WHY SANCTIONS AND AN ORDER TO COMPEL ARE NECESSARY
2 “[T]he central precept” of California’s Civil Discovery Act is that “civil discovery be
essentially self-executing.” (Clement v. Alegre (2009) 177 Cal. App. 4th 1277, 1281.) To that end,
3
the Discovery Act “requires that there be a serious effort and negotiation and informal resolution”
4
of discovery disputes. (Id. [citing Townsend v. Super. Ct. (1988) 61 Cal. App. 4th 1431, 1438].)
5 Unfortunately, given “the lengths to which some counsel and clients will go to avoid providing
6 discovery”—including “by responding to straightforward [discovery requests] with nitpicking and
7 meritless objections”—sometimes it is necessary to involve the Court. (Id.) Given the goal that
8 civil discovery in California be self-executing, courts have imposed sanctions on parties for
refusing to respond to discovery requests in good faith, for example, by “seiz[ing] on what might
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have be[] at most technical violation[s] of the rules” to try to avoid responding to discovery. (Id.
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at 1287.)
11 While so-called “self-collection” of potentially relevant documents and communications
12 sometimes occurs in discovery, it “may give rise to questions regarding the accuracy and
13 completeness of collections if directions and oversight by legal counsel . . . are poor or non-
14 existent.” (The Sedona Conference, The Sedona Principles, Third Edition: Best Practices,
Recommendations & Principles for Addressing Electronic Document Production (2018) at 168,
15
tinyurl.com/y3f836p4); see also Equal Emp. Opp. Comm’n v. M1 5100 Corp. (S.D. Fla. July 2,
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2020) 2020 WL 3581372, at *3 [granting motion to compel under threat of sanctions in situation
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where self-interested “Defendant’s employees self-collected [discovery materials] in order to
18 respond to Plaintiffs’ document requests without sufficient attorney knowledge, participation, and
19 counsel.”]. When determining whether self-collection should be allowed, an “attorney should
20 consider . . . the custodian’s role in the litigation, including whether the custodian has a stake in
21 the litigation or his conduct may have been embarrassing which heightens the risk of an incomplete
collection.” (Claire-Lise Kutlay, 43-PAR L.A. Law. 3, Conducting and Documenting Proper
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Evidence Collections (April 2020).)
23
Here, Defendants Bragg, Kludt, and SVRV, and attorney Van Steenis have gone to very
24 great lengths to avoid providing plainly relevant discovery. Moreover, Defendants’ counsel appear
25 to be relying on Defendants to self-collect documents, despite the obvious risk of an incomplete
26 production. Indeed, it has recently become clear that Defendants have not even provided their
27 counsel with access to plainly relevant documents, much less produced them to Plaintiffs.
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 In addition to the misconduct described in Plaintiffs’ previously filed motion to compel
2 and for sanctions, Defendants Bragg, SVRV, and Kludt, and attorney Van Steenis, have engaged
in the following additional misconduct:
3
KLUDT
4
After Plaintiffs initiated this action in March 2022, Kludt contacted Plaintiffs and asked to
5 be dismissed from the case. Kludt claimed that Bragg was solely responsible for the fraud
6 perpetrated on Plaintiffs and stated that he had numerous documents relevant to this litigation that
7 would demonstrate his innocence. He asserted that he still had access to Google Drive and Box
8 folders and his SVRV email account. Plaintiffs responded that they could not consider dismissing
Kludt until he shared with Plaintiffs all relevant documents and answered questions about the case
9
under oath. (Vierra Decl. ¶ 5.)
10
In March and April 2022, instead of providing Plaintiffs with the fulsome materials he had
11 promised, Kludt gave Plaintiffs a cherry-picked set of only 19 documents—which did not include
12 any communications—most of which Plaintiffs already had, and which Kludt knew Plaintiffs
13 already had. (Id. ¶ 6.)
14 On May 27, 2022, having not received any additional documents from Kludt, Plaintiffs
served Kludt with a First Set of Requests for Production (RFPs 1–13), First Set of Requests for
15
Admission (RFAs 1–7), and First Set of Special Interrogatories (SRogs 1–7), which were due June
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27, 2022. (Vierra Decl., Ex. 19.)
17
On June 15, 2022, Kludt’s counsel, Mark Poe (“Poe”) emailed Plaintiffs to ask if Kludt
18 could have a three-week extension to July 18, 2022 to respond to discovery. Plaintiffs responded
19 the same day to offer an extension to July 6, 2022, but noted that July 18 was unreasonable given
20 that “Kludt has been saying he would send [Plaintiffs] documents for months before retaining
21 counsel and he still has not done so, apart from fewer than 20 total files most of which [Plaintiffs]
already had and which did not include any communications.” (Vierra Decl., Ex. 2.)
22
On July 6, 2022, Plaintiffs gave Bragg and SVRV notice of their intent to bring an
23
application for an order to compel and for sanctions. After this, Bragg provided a link to a Google
24 Drive folder that contained only 23 documents, including no communications—the exact same
25 documents Kludt had shared with Plaintiffs in March and April, plus two copies of both
26 Investment-Subscription Agreements, which Plaintiffs have had in their possession for three years.
27 After accessing this link, it occurred to Plaintiffs that they should see if other Google Drive links
Defendants had shared with Plaintiffs years before might still be active. The search was fruitful,
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 and Plaintiffs located several links to public folders containing hundreds of relevant documents.
2 They also discovered several links to folders that were inaccessible to the public. Based on the
names of the folders and/or the emails in which they were included, Plaintiffs recognized that the
3
documents in these folders were also indisputably relevant. (Vierra Decl., Ex. 3.)
4
On July 6, 2022, Kludt served responses and objections to Plaintiffs’ May 27, 2022
5 discovery, but did not produce any documents. Plaintiffs responded, again noting that Kludt “has
6 ready access to hundreds of relevant documents that he indicated he would provide voluntarily
7 three months ago, and he still has not done so.” Plaintiffs stated that they would be “happy to
8 discuss in the meantime” but explained that they intended “to file a motion to compel and for
sanctions” if Kludt did not start producing documents “promptly.” (Vierra Decl., Ex. 4.)
9
On July 6, 2022, Plaintiffs also served Kludt with a Second Set of Requests for Production
10
(RFP 14), due August 5, 2022. (Vierra Decl., Ex. 5.)
11 On July 7, 2022, Poe sent Plaintiffs an email stating that Kludt had sent him “a collection
12 of .pdfs,” and represented that he would “go ahead and Bates and send what I have so far.” He
13 continued, “I [am] waiting on his email pull,” implying that he was permitting Kludt to self-collect
14 his emails. (Vierra Decl., Ex. 6.) Shortly thereafter, Poe sent Plaintiffs a Dropbox link to 23
documents—the exact same documents Kludt had provided in March and April, plus the two
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copies of both Investment-Subscription Agreements that Plaintiffs already had, and which Kludt
16
knew Plaintiffs already had. (Vierra Decl. ¶ 43.)
17
On July 8, 2022, Plaintiffs wrote to Poe, explaining that this “production” “amounts to no
18 production at all” because Kludt had simply produced “the exact same documents” he had
19 provided several months earlier and Plaintiffs “possessed many of these documents before this
20 litigation even began.” Plaintiffs further asserted that they knew “for a fact that Kludt has ready
21 access to hundreds of relevant documents in Google Drive that are accessible by him
immediately.” Plaintiffs also stated that they would be “happy to discuss this with you further if
22
you can provide a reason for the delay, but at this point, all evidence indicates that Kludt . . . has
23
ample responsive documents that he is deliberately refusing to produce.” Plaintiffs once again
24 stated that if Kludt would not respond to their discovery requests, they would have to bring a
25 motion to compel and for sanctions. (Vierra Decl., Ex. 3.)
26 Poe responded with a perplexing email accusing Plaintiffs of trying “to impose legal
27 expenses on all the defendant to reproduce the same documents that are in [their] possession
28
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 already,” and inquiring how Plaintiffs “knew” that Kludt had access to hundreds of relevant
2 documents in Google Drive. (Vierra Decl., Ex. 3.)
Plaintiffs responded with a detailed email explaining how they knew there were other
3
relevant folders on Defendants’ Google Drive accounts. First, as Poe well knew, Kludt told
4
Plaintiffs these documents existed when he first contacted them and asked to be dismissed. Second,
5 Plaintiffs had located relevant Google Drive links that Kludt had failed to share. Plaintiffs first
6 provided Poe with a link to the “Moore Rd Woodside” 4 folder, which they noted “is public and
7 contains hundreds of clearly responsive documents.” Plaintiffs noted, among other things, that the
8 activity log showed that “Kludt created and operated this folder,” and further, that based on other
details of the folder, it was clear that additional responsive documents existed outside the folder.
9
Plaintiffs also provided Poe with a link to the “3-31-20” 5 folder, also created and operated by
10
Kludt, that contained indisputably responsive documents. Plaintiffs also provided Poe with a link
11 to a third folder (name unknown) to which they had requested access, but to which access had not
12 been granted. 6 (Access still has not been granted). Plaintiffs further noted that by analyzing these
13 folders, they could glean that Kludt had used at least four different accounts to operate files
14 indisputably relevant to this litigation. (Vierra Decl., Ex. 3.)
Plaintiffs once again offered Kludt an extension, but said, “Please confirm that Kludt will
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provide us access to all relevant materials including, without limitation, those in the accounts
16
identified above, and provide a reasonable time frame within which those productions will be
17
made. Please also confirm that he will produce all relevant communications.” Plaintiffs concluded
18 by saying that they “would strongly prefer to handle discovery amicably rather than run to the
19 Court over these issues” and once again offered to meet and confer. (Vierra Decl., Ex. 3.)
20 Counsel met and conferred on July 14, 2022. On that call, Plaintiffs offered to incur the
21 cost of downloading, Bates-stamping, and circulating the Google Drive documents to all parties to
lessen the burden on Kludt, if Kludt would simply provide Plaintiffs access to the relevant Google
22
Drive materials. However, Kludt’s counsel stated he preferred to do this himself. He also stated
23
that he would aim to produce all relevant emails from each of Kludt’s accounts identified in
24 Plaintiffs’ July 10, 2022 email by August 6, 2022. (Vierra Decl., Ex. 7 & ¶ 16.)
25 On July 18, 2022, Plaintiffs wrote “to follow up about a potential issue with the production
26 of Kludt’s Google Drive documents.” They explained that Google Drive preserves multiple
27
4 https://drive.google.com/drive/folders/1NHpE8d8j_W3WueEDKhsz9EF_CHWa4Ci4.
28 5 https://drive.google.com/drive/folders/1Hcd6KnM2NcOFTPw3_oSKjLmjaO9yjXXJ.
6 https://drive.google.com/file/d/1MrhNNZ4hy23Ze-pS1VqtjYa2Q3a4Czxe/view?usp=sharing.
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 versions of documents, including metadata showing who created and edited the document, how,
2 and when, and that this information was directly relevant to Plaintiffs’ claims. Plaintiffs noted that
while this information can be extracted and produced, 7 it can be difficult and costly to do so.
3
Because Plaintiffs did not wish to impose unnecessary discovery costs on Kludt, Plaintiffs offered
4
Kludt a painless, low cost solution: he could provide Plaintiffs direct access to the documents (as
5 Plaintiffs had proposed previously) in lieu of undertaking the expense of a more complicated
6 production. (Vierra Decl., Ex. 8.) Poe never responded to this email. (Vierra Decl. ¶ 18.)
7 On August 5, 2022, Kludt provided responses and objections to Plaintiffs’ Second Set of
8 Requests for Production (RFP 14), which sought communications between Defendants since the
inception of the litigation. Although Defendants do not have a common interest agreement, Kludt
9
nevertheless refused to produce any documents, including on the ground that these
10
communications contained attorney work product. Plaintiffs promptly responded and explained
11 that Kludt’s refusal to produce documents was unwarranted. Plaintiffs also asked Poe and Van
12 Steenis once again “to confirm whether your clients will grant Plaintiffs access to your clients’
13 relevant Google Drive folders.” Plaintiffs raised the possibility of seeking sanctions if Kludt,
14 Bragg, and SVRV continued to abuse the discovery process. Poe responded to defend Kludt’s
privilege objection, after which Plaintiffs provided a further response as to why it was
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unwarranted. Kludt eventually implicitly agreed to withdraw the objection by producing
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documents in response to RFP 14, although Kludt seemingly has withheld other documents
17
responsive to this RFP without justification (discussed further below). (Vierra Decl., Ex. 9.)
18 On August 5, 2022, for the first time, Kludt finally gave his counsel access to the “Moore
19 Rd Woodside” folder that Plaintiffs had shared with Poe 26 days earlier. (Vierra Decl. ¶ 20.)
20 On August 8, 2022, Plaintiffs wrote to Poe, noting that Kludt still had not made a “complete
21 production,” despite Poe’s representation that he would aim to do so by August 6, 2022. Plaintiffs
also provided additional relevant Google Drive links they had located to which Kludt had not given
22
them access. 8 Plaintiffs informed Poe that Kludt had previously shared these documents with
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Plaintiffs when soliciting their investments, but that Kludt had subsequently restricted Plaintiffs’
24
25
7 Plaintiffs’ counsel has substantial experience making such productions.
26 8 See https://docs.google.com/document/d/1b2Uf4rGq5OruQpX3IRilTxLaM-
ZbRvO9VA4YsZGlQo0/edit?usp=drive_web&rswr=true;
27 https://docs.google.com/document/d/1fOU_1ZWVk1yQWpNL8IgsBC2mY4tnThavqRBQrtIcu9k/edit?u
sp=drive_web&rswr=true;
28 https://docs.google.com/document/d/1fOU_1ZWVk1yQWpNL8IgsBC2mY4tnThavqRBQrtIcu9k/edit?u
sp=drive_web&rswr=true.
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 access to those documents. To date, Kludt still has not provided access to those folders or the
2 documents within them. Plaintiffs’ counsel further informed Poe that they could see that Kludt still
had not even shared the indisputably relevant “3-31-20” folder with his own legal counsel even
3
though Plaintiffs had identified that link for counsel 29 days earlier. (Vierra Decl., Ex. 10.)
4
On August 8, 2022, Kludt finally shared a link to the “Moore Rd Woodside” folder with
5 Plaintiffs—29 days after Plaintiffs had shared that link with Poe and informed him that its contents
6 were publicly available. (Vierra Decl. ¶ 22.)
7 On August 9, 2022, Kludt produced 23 documents (only 7 of which were communications)
8 in response to RFP 14. Plaintiffs thanked Kludt for the production but identified at least two
communications that were referenced elsewhere and appeared to be missing from the production
9
(to say nothing of the other communications that Plaintiffs have strong reason to believe occurred,
10
but which they could not specifically identify). (Vierra Decl., Ex. 11.)
11 On August 10, 2022, Kludt produced his first set of communications in response to
12 Plaintiffs’ First Set of Requests for Production (RFPs 1–13), which appear to have been
13 downloaded exclusively from his k@realsv.com account, despite the fact that on July 10, 2022,
14 Plaintiffs identified for Poe at least three other email accounts that Kludt used when managing the
Moore Road Project. (Vierra Decl. ¶ 25.)
15
After Kludt produced 1 more document 9 in response to RFP 14, on August 11, 2022,
16
Plaintiffs followed up about the other apparently missing document (again, to say nothing of the
17
other missing communications that Plaintiffs could not specifically identify). Plaintiffs also
18 informed Kludt that they had located several more relevant Google Drive and other cloud
19 application links in the Paramont Defendants’ productions that Kludt had failed to produce.
20 Plaintiffs also reminded Poe that Kludt had previously stated that he had relevant documents in
21 Box, but that no Box link had been shared with Plaintiffs. Plaintiffs asked once again when Kludt
would provide access to all relevant links. (Vierra Decl., Ex. 13.)
22
Plaintiffs also thanked Kludt for the recent productions but again noted that Kludt’s
23
production was woefully incomplete. Poe responded that he would have to “confer with [Kludt]”
24 as to whether Kludt would produce any more documents, confirming that he is permitting Kludt
25 to self-collect documents and communications. To date, Kludt has not produced any additional
26 documents. (Vierra Decl., Ex. 13.).
27
9 In producing this document, Poe remarked, “[Kludt had forwarded that [document] to me, but I’d
28 missed it in compiling them for production. Those are all of the responsive documents.” Once again,
this implies that Poe is permitting Kludt to self-collect communications. (Vierra Decl., Ex. 12.)
12
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 On August 17, 2022, Plaintiffs, consistent with their offer, produced the contents of the
2 “Moore Rd Folder” to all Defendants after incurring the costs of downloading, hosting, processing,
and Bates-stamping those documents themselves. (Vierra Delc. ¶ 28.)
3
BRAGG, SVRV, AND VAN STEENIS
4
Since Plaintiffs filed their previous motion to compel and for sanctions against Bragg and
5 SVRV, Plaintiffs have learned of additional misconduct by Bragg and SVRV and by their counsel,
6 Van Steenis. In particular, Plaintiffs have learned that Bragg and SVRV (and Kludt) were
7 communicating with Van Steenis about this litigation at least as early as May 12, 2022, before
8 Bragg wrote Plaintiffs on May 18, 2022 to say, “My attorney [Van Steenis] will be reaching out
to you soon.” As described further below, Van Steenis did not respond to Plaintiffs for 8 weeks.
9
Not until Plaintiffs raised the prospect of sanctions against Van Steenis personally did he bother
10
to respond. A condensed timeline of Bragg’s, SVRV’s and Van Steenis’s misconduct follows:
11 On March 18, 2022, Bragg wrote to Kludt, “FYI…I just got served at the firehouse.”
12 (Vierra Decl., Ex. 14.)
13 On May 12, 2022, Bragg wrote to Kludt, “What’s the due date and have you responded to
14 the Arntsen’s [sic]. . . . Their attorney called me today and left a message and also sent an email
that I forwarded you.” (Vierra Decl., Ex. 15.)
15
Also on May 12, 2022, Bragg forwarded Plaintiffs’ service email to Van Steenis and Kludt,
16
writing, “Ryan, Should I make the initial call to this guy to let him know that we are out of business
17
and don’t have funds? Also, [Kludt, w]e haven’t had much time to speak about strategy for this
18 one. Do you have any input
Preview
1 Collin J. Vierra (State Bar No. 322720) EIMER STAHL LLP 2 99 Almaden Blvd., Suite 641 San Jose, CA 95113-1605 3 Telephone: (408) 889-1668 4 Email: cvierra@eimerstahl.com 5 Attorney for Plaintiffs 6 7 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN MATEO 8 9 Robert Arntsen; Mary Lee; Arntsen Family Case No. 22-CIV-01148 10 Partnership, LP; and Brian Christopher Dunn Custodianship; Date: September 16, 2022 11 Time: 9:00am 12 Plaintiffs, Dept. 21 v. 13 Hon. Robert D. Foiles David M. Bragg; Kurtis Stuart Kludt; Silicon 14 Valley Real Ventures LLC; SVRV 385 NOTICE OF MOTION AND MOTION Moore, LLC; SVRV 387 Moore, LLC; TO COMPEL AND FOR SANCTIONS 15 Gregory J. Davis; Kevin Wolfe; James AGAINST DEFENDANTS DAVID M. 16 Justesen; Paramont Woodside, LLC; and BRAGG, KURTIS S. KLUDT, AND Paramont Capital, LLC; SILICON VALLEY REAL VENTURES, 17 LLC, AND ATTORNEY RYAN VAN Defendants. STEENIS, AND MEMORANDUM IN 18 SUPPORT 19 20 21 22 23 24 25 26 27 28 NOTICE OF MOTION AND MOTION TO COMPEL AND FOR SANCTIONS 1 TO ALL PARTIES AND THEIR COUNSEL OF RECORD: 2 PLEASE TAKE NOTICE, that on September 16, 2022 1 at 9:00am, or as soon thereafter as the matter may be heard, in Department 21, located in the San Mateo Superior Court, before 3 the Honorable Robert D. Foiles, Plaintiffs Robert Arntsen, Mary Lee, Arntsen Family 4 Partnership, LP, and Brian Cristopher Dunn Custodianship (“Plaintiffs”), pursuant to Code of 5 Civil Procedure section 2023.030 and this Court’s Local Rules, will and hereby do move the 6 Court for an Order to compel Defendants Davis M. Bragg (“Bragg”) and Silicon Valley Real 7 Ventures, LLC (“SVRV) to answer Plaintiffs’ requests for documents and special interrogatories 8 and to compel Defendant Kurtis S. Kludt (“Kludt”) to answer Plaintiffs’ requests for documents. Plaintiffs further move for monetary sanctions against Bragg, SVRV, Kludt, and Bragg’s and 9 SVRV’s attorney, Mr. Ryan Van Steenis (“Van Steenis), for their abuses of the discovery 10 process. 11 This Motion is brought on the grounds that Defendants Bragg, SVRV, and Kludt have 12 refused to properly respond to Plaintiffs’ discovery demands, and that Van Steenis has refused to 13 meet and confer with Plaintiffs, in flagrant violation of California law and this Court’s Rules. 14 These Defendants’ and Van Steenis’s abuses of the discovery process are materially prejudicing Plaintiffs’ ability to litigate this case. 15 Plaintiffs’ Motion is based upon this Notice of Motion, the accompanying Memorandum 16 of Points and Authorities, the Declaration of Collin J. Vierra in support thereof, all pleading and 17 papers filed with the Court, and any arguments and evidence that may be presented at the time of 18 hearing. 19 20 Dated: August 23, 2022 By: ______________________ 21 Collin J. Vierra EIMER STAHL, LLP 22 Attorney for Plaintiffs 23 24 1 This court currently has two hearings scheduled for September 16, 2022, related to this case: first, a 25 hearing on the Paramont Defendants’ demurrer to Plaintiffs’ initial Complaint, and second, a hearing on Plaintiffs’ previously-filed motion to compel and for sanctions against Defendants David M. Bragg 26 and Silicon Valley Real Ventures, LLC. Because this Motion addresses discovery-related misconduct that is substantially related to that described in Plaintiffs’ previously filed motion to compel and for 27 sanctions, Plaintiffs ask that the hearing on this Motion be consolidated with the hearing on Plaintiffs’ previously filed motion. Further, because Plaintiffs have filed a First Amended Complaint, the hearing 28 on the Paramont Defendants’ demurrer should be taken off calendar. 2 NOTICE OF MOTION AND MOTION TO COMPEL AND FOR SANCTIONS 1 Collin J. Vierra (State Bar No. 322720) EIMER STAHL LLP 2 99 Almaden Blvd., Suite 641 San Jose, CA 95113-1605 3 Telephone: (408) 889-1668 4 Email: cvierra@eimerstahl.com 5 Attorney for Plaintiffs 6 7 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN MATEO 8 9 Robert Arntsen; Mary Lee; Arntsen Family Case No. 22-CIV-01148 10 Partnership, LP; and Brian Christopher Dunn Custodianship; Date: September 16, 2022 11 Time: 9:00am 12 Plaintiffs, Dept. 21 v. 13 Hon. Robert D. Foiles David M. Bragg; Kurtis Stuart Kludt; Silicon 14 Valley Real Ventures LLC; SVRV 385 MEMORANDUM OF POINTS AND Moore, LLC; SVRV 387 Moore, LLC; AUTHORITIES IN SUPPORT OF 15 Gregory J. Davis; Kevin Wolfe; James MOTION TO COMPEL AND FOR 16 Justesen; Paramont Woodside, LLC; and SANCTIONS AGAINST DEFENDANTS Paramont Capital, LLC; DAVID M. BRAGG, KURTIS S. KLUDT, 17 AND SILICON VALLEY REAL Defendants. VENTURES, LLC, AND ATTORNEY 18 RYAN VAN STEENIS 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 TABLE OF CONTENTS 2 3 TABLE OF AUTHORITIES .......................................................................................................... 3 4 SUMMARY OF THE ARGUMENT ............................................................................................. 4 5 BACKGROUND REGARDING DEFENDANTS’ DISCOVERY ABUSES ............................... 4 6 BACKGROUND REGARDING GOOGLE DRIVE ..................................................................... 5 7 MEET AND CONFER ATTEMPTS.............................................................................................. 5 8 LEGAL STANDARD ..................................................................................................................... 6 9 REASONS WHY SANCTIONS AND AN ORDER TO COMPEL ARE NECESSARY 10 AGAINST BRAGG, KLUDT, SVRV, AND VAN STEENIS ...................................................... 7 11 KLUDT ....................................................................................................................................... 8 12 13 BRAGG, SVRV, AND VAN STEENIS .................................................................................. 13 14 REQUEST FOR SANCTIONS .................................................................................................... 17 15 CONCLUSION ............................................................................................................................. 18 16 17 18 19 20 21 22 23 24 25 26 27 28 2 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 TABLE OF AUTHORITIES 2 Page(s) 3 CASES 4 Clement v. Alegre, 5 (2009) 177 Cal. App. 4th 1277 ................................................................................................... 7 6 Equal Emp. Opp. Comm’n v. M1 5100 Corp., 7 (S.D. Fla. July 2, 2020) 2020 WL 3581372 ............................................................................... 7 Townsend v. Super. Ct., 8 (1988) 61 Cal. App. 4th 1431 ..................................................................................................... 7 9 Vella v. Hudgins, 10 (1984) 151 Cal. App. 3d 515 .................................................................................................. 6, 7 11 OTHER AUTHORITIES 12 13 Claire-Lise Kutlay, 14 43-PAR L.A. Law. 3 ................................................................................................................... 7 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 SUMMARY OF THE ARGUMENT 2 Defendants Bragg, Kludt, and SVRV have been abusing the discovery process in this case since day one. 3 Despite having received numerous requests for discovery, Bragg and SVRV have not 4 produced a single document and have refused to respond to most of Plaintiffs’ written discovery 5 requests. Meanwhile, their attorney, Ryan Van Steenis, has been in constant breach of California’s 6 discovery rules and California’s Rules of Professional Conduct. He has raised meritless objections 7 to Plainitffs’ discovery requests (when he has filed responses at all) and then eschewed Plaintiffs’ 8 counsel’s repeated good faith attempts to meet and confer by refusing to respond to their emails. Indeed, he did not even speak to Plaintiffs’ counsel for at least two months after first speaking with 9 Bragg and SVRV about this case, even after his clients said he would reach out to Plaintiffs’ 10 counsel, were threatened with an entry of default, were threatened with sanctions. He only 11 responded when he was threatened with sanctions personally. 12 Kludt admitted to Plaintiffs in March and April 2022 that he had numerous documents 13 relevant to this litigation. Despite promising he would produce them, he refused to do so. Plaintiffs’ 14 counsel was forced to conduct an investigation in July 2022 that revealed that Kludt had access to hundreds of relevant documents that he was refusing to produce, despite being served with formal 15 discovery in May 2022. Even after Plaintiffs’ counsel shared links to these documents with Kludt’s 16 attorney, Mark Poe, Kludt did not share these files with his own attorney for nearly a month. Kludt 17 has produced some documents since then, but still has refused to produce password-protected 18 documents that Plaintiffs have proved exist, and links to which Plaintiffs shared with Kludt’s 19 counsel as early as July 10, 2022. Meanwhile, Kludt has refused to conduct a reasonable search 20 for responsive documents from other sources, including those that Plaintiffs have proved were 21 used to generate documents relevant to this litigation. Evidence indicates not only that Bragg, Kludt, and SVRV are refusing to respond to 22 Plaintiff’s discovery requests, but also that Bragg and Kludt have been withholding relevant 23 documents from their own counsel. Nothing but sanctions can deter this flagrant misconduct. 24 BACKGROUND REGARDING DEFENDANTS’ DISCOVERY ABUSES 25 Plaintiffs previously filed a motion to compel and for sanctions against Defendants Bragg 26 and SVRV on July 12, 2020. Plaintiffs subsequently filed an application for an order to expedite 27 the hearing, and the Court granted that motion and moved the hearing to September 16, 2022. Since then, not only have Bragg and SVRV failed to correct the conduct addressed in Plaintiffs’ 28 4 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 previously filed motion, but Defendants Bragg and SVRV, and attorney Van Steenis, have engaged 2 in additional discovery misconduct. Plaintiffs have also learned additional facts about Bragg’s, SVRV’s and Van Steenis’s discovery misconduct going back months. 3 Meanwhile, despite Plaintiffs’ counsel spending numerous hours trying to resolve ongoing 4 discovery disputes, Defendant Kludt has refused to properly respond to Plaintiffs’ discovery 5 requests, necessitating his inclusion in this Motion. 6 BACKGROUND REGARDING GOOGLE DRIVE 7 Bragg, SVRV, and Kludt primarily used Google Drive 2 to create and edit documents 8 relevant to this litigation, although they also used at minimum, Dropbox, Box 3, standard Microsoft Office applications, QuickBooks, and other applications. It takes literally seconds for the owner of 9 a Google Drive folder (or anyone else with sufficient permissions) to share the folder with someone 10 else—one simply (1) clicks the “Share” button, (2) enters the email address with which they wish 11 to share the folder, and (3) clicks “Send” to confirm. Images showing the simplicity of this process 12 are attached as Appendix B. 13 Throughout this litigation, Plaintiffs have informed Bragg, SVRV, and Kludt that they 14 could comply with Plaintiffs’ discovery requests by simply sharing relevant Google Drive (and similar) folders with Plaintiffs directly, which would obviate the need for Defendants to download 15 and Bates stamp each document in the relevant folder. As a courtesy to Defendants, Plaintiffs have 16 offered to bear the burden and expense of downloading, processing, Bates-stamping, and 17 circulating these documents once they have been given access to the Google Drive folders. In 18 short, Defendants have been given the easiest possible method of producing relevant documents 19 from their Google Drive folders. 20 MEET AND CONFER ATTEMPTS 21 Plaintiffs’ counsel has sought to meet and confer with Defendants’ counsel about the issues described in this Motion numerous times during the past several months, as described further 22 below, to try to avoid having to bring this Motion. Bragg’s and SVRV’s counsel has largely refused 23 to meet and confer at all. Despite exchanging several communications with Kludt’s counsel, the 24 issues with Kludt’s discovery responses have not been resolved, and show no signs that they will 25 be resolved without an order from this Court. (Vierra Decl. ¶ 4.) 26 27 28 2 A brief, useful primer on Google Drive is available at https://tinyurl.com/m7ydb9e. 3 Box and Dropbox are services that operate substantially similarly to Google Drive. 5 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 LEGAL STANDARD 2 Under Code of Civil Procedure section 2023.010, “misuse of the discovery process” includes, without limitation, “[f]ailing to respond or to submit to an authorized method of 3 discovery,” (subsection (d)), [m]aking, without substantial justification, an unmeritorious 4 objection to discovery, (subsection (e)), “[m]aking an evasive response to discovery,” (subsection 5 (f)), and “[f]ailing to confer . . . in a reasonable and good faith attempt to resolve informally any 6 dispute concerning discovery, if the section governing a particular discovery Application requires 7 the filing of a declaration stating facts showing that an attempt at informal resolution has been 8 made” (subsection (i)). Section 2023.040 authorizes a party to bring a motion for sanctions where an opposing party (or their attorney) has abused the discovery process. And section 2023.030 9 requires courts to impose sanctions for misuses of the discovery process, subject only to narrow 10 exceptions. 11 Specifically, subsection (a) of section 2023.030 authorizes the Court to “impose a monetary 12 sanction ordering that one engaging in the misuse of the discovery process . . . pay the reasonable 13 expenses, including attorneys’ fees, incurred by anyone as a result” of such conduct. The Court 14 “shall impose that sanction unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.” (Id. [emphasis 15 added]; see also CCP § 2031.300(c) [court “shall” impose sanctions with regard to inspection 16 demands]; CCP § 2030.290(c) [same for interrogatories]; CCP § 2033.280(c) [same for requests 17 for admission].) 18 “The amount to be awarded as attorneys’ fees is left to the sound discretion of the trial 19 court.” (Vella v. Hudgins (1984) 151 Cal. App. 3d 515, 522.) Courts may award attorneys’ fees 20 even if the attorney and his agents are operating under a contingency fee arrangement. (See id. at 21 521.) In determining the reasonableness of attorneys’ fees, courts may consider, inter alia, “the number of hours spent” and the “reasonable hourly compensation for the attorney.” (Id.) In 2021, 22 the national average billing rates for legal partners and associates were $729 and $535 per hour, 23 respectively. (Andrew Maloney, Associate Billing Rates Are Growing Faster Than Partner Rates, 24 American Lawyer (Feb. 3, 2022), https://tinyurl.com/2p8scp28.) Associate billing rates were 25 slightly higher than the national average in San Francisco, at $536 per hour. (Id.) 26 27 28 6 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 REASONS WHY SANCTIONS AND AN ORDER TO COMPEL ARE NECESSARY 2 “[T]he central precept” of California’s Civil Discovery Act is that “civil discovery be essentially self-executing.” (Clement v. Alegre (2009) 177 Cal. App. 4th 1277, 1281.) To that end, 3 the Discovery Act “requires that there be a serious effort and negotiation and informal resolution” 4 of discovery disputes. (Id. [citing Townsend v. Super. Ct. (1988) 61 Cal. App. 4th 1431, 1438].) 5 Unfortunately, given “the lengths to which some counsel and clients will go to avoid providing 6 discovery”—including “by responding to straightforward [discovery requests] with nitpicking and 7 meritless objections”—sometimes it is necessary to involve the Court. (Id.) Given the goal that 8 civil discovery in California be self-executing, courts have imposed sanctions on parties for refusing to respond to discovery requests in good faith, for example, by “seiz[ing] on what might 9 have be[] at most technical violation[s] of the rules” to try to avoid responding to discovery. (Id. 10 at 1287.) 11 While so-called “self-collection” of potentially relevant documents and communications 12 sometimes occurs in discovery, it “may give rise to questions regarding the accuracy and 13 completeness of collections if directions and oversight by legal counsel . . . are poor or non- 14 existent.” (The Sedona Conference, The Sedona Principles, Third Edition: Best Practices, Recommendations & Principles for Addressing Electronic Document Production (2018) at 168, 15 tinyurl.com/y3f836p4); see also Equal Emp. Opp. Comm’n v. M1 5100 Corp. (S.D. Fla. July 2, 16 2020) 2020 WL 3581372, at *3 [granting motion to compel under threat of sanctions in situation 17 where self-interested “Defendant’s employees self-collected [discovery materials] in order to 18 respond to Plaintiffs’ document requests without sufficient attorney knowledge, participation, and 19 counsel.”]. When determining whether self-collection should be allowed, an “attorney should 20 consider . . . the custodian’s role in the litigation, including whether the custodian has a stake in 21 the litigation or his conduct may have been embarrassing which heightens the risk of an incomplete collection.” (Claire-Lise Kutlay, 43-PAR L.A. Law. 3, Conducting and Documenting Proper 22 Evidence Collections (April 2020).) 23 Here, Defendants Bragg, Kludt, and SVRV, and attorney Van Steenis have gone to very 24 great lengths to avoid providing plainly relevant discovery. Moreover, Defendants’ counsel appear 25 to be relying on Defendants to self-collect documents, despite the obvious risk of an incomplete 26 production. Indeed, it has recently become clear that Defendants have not even provided their 27 counsel with access to plainly relevant documents, much less produced them to Plaintiffs. 28 7 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 In addition to the misconduct described in Plaintiffs’ previously filed motion to compel 2 and for sanctions, Defendants Bragg, SVRV, and Kludt, and attorney Van Steenis, have engaged in the following additional misconduct: 3 KLUDT 4 After Plaintiffs initiated this action in March 2022, Kludt contacted Plaintiffs and asked to 5 be dismissed from the case. Kludt claimed that Bragg was solely responsible for the fraud 6 perpetrated on Plaintiffs and stated that he had numerous documents relevant to this litigation that 7 would demonstrate his innocence. He asserted that he still had access to Google Drive and Box 8 folders and his SVRV email account. Plaintiffs responded that they could not consider dismissing Kludt until he shared with Plaintiffs all relevant documents and answered questions about the case 9 under oath. (Vierra Decl. ¶ 5.) 10 In March and April 2022, instead of providing Plaintiffs with the fulsome materials he had 11 promised, Kludt gave Plaintiffs a cherry-picked set of only 19 documents—which did not include 12 any communications—most of which Plaintiffs already had, and which Kludt knew Plaintiffs 13 already had. (Id. ¶ 6.) 14 On May 27, 2022, having not received any additional documents from Kludt, Plaintiffs served Kludt with a First Set of Requests for Production (RFPs 1–13), First Set of Requests for 15 Admission (RFAs 1–7), and First Set of Special Interrogatories (SRogs 1–7), which were due June 16 27, 2022. (Vierra Decl., Ex. 19.) 17 On June 15, 2022, Kludt’s counsel, Mark Poe (“Poe”) emailed Plaintiffs to ask if Kludt 18 could have a three-week extension to July 18, 2022 to respond to discovery. Plaintiffs responded 19 the same day to offer an extension to July 6, 2022, but noted that July 18 was unreasonable given 20 that “Kludt has been saying he would send [Plaintiffs] documents for months before retaining 21 counsel and he still has not done so, apart from fewer than 20 total files most of which [Plaintiffs] already had and which did not include any communications.” (Vierra Decl., Ex. 2.) 22 On July 6, 2022, Plaintiffs gave Bragg and SVRV notice of their intent to bring an 23 application for an order to compel and for sanctions. After this, Bragg provided a link to a Google 24 Drive folder that contained only 23 documents, including no communications—the exact same 25 documents Kludt had shared with Plaintiffs in March and April, plus two copies of both 26 Investment-Subscription Agreements, which Plaintiffs have had in their possession for three years. 27 After accessing this link, it occurred to Plaintiffs that they should see if other Google Drive links Defendants had shared with Plaintiffs years before might still be active. The search was fruitful, 28 8 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 and Plaintiffs located several links to public folders containing hundreds of relevant documents. 2 They also discovered several links to folders that were inaccessible to the public. Based on the names of the folders and/or the emails in which they were included, Plaintiffs recognized that the 3 documents in these folders were also indisputably relevant. (Vierra Decl., Ex. 3.) 4 On July 6, 2022, Kludt served responses and objections to Plaintiffs’ May 27, 2022 5 discovery, but did not produce any documents. Plaintiffs responded, again noting that Kludt “has 6 ready access to hundreds of relevant documents that he indicated he would provide voluntarily 7 three months ago, and he still has not done so.” Plaintiffs stated that they would be “happy to 8 discuss in the meantime” but explained that they intended “to file a motion to compel and for sanctions” if Kludt did not start producing documents “promptly.” (Vierra Decl., Ex. 4.) 9 On July 6, 2022, Plaintiffs also served Kludt with a Second Set of Requests for Production 10 (RFP 14), due August 5, 2022. (Vierra Decl., Ex. 5.) 11 On July 7, 2022, Poe sent Plaintiffs an email stating that Kludt had sent him “a collection 12 of .pdfs,” and represented that he would “go ahead and Bates and send what I have so far.” He 13 continued, “I [am] waiting on his email pull,” implying that he was permitting Kludt to self-collect 14 his emails. (Vierra Decl., Ex. 6.) Shortly thereafter, Poe sent Plaintiffs a Dropbox link to 23 documents—the exact same documents Kludt had provided in March and April, plus the two 15 copies of both Investment-Subscription Agreements that Plaintiffs already had, and which Kludt 16 knew Plaintiffs already had. (Vierra Decl. ¶ 43.) 17 On July 8, 2022, Plaintiffs wrote to Poe, explaining that this “production” “amounts to no 18 production at all” because Kludt had simply produced “the exact same documents” he had 19 provided several months earlier and Plaintiffs “possessed many of these documents before this 20 litigation even began.” Plaintiffs further asserted that they knew “for a fact that Kludt has ready 21 access to hundreds of relevant documents in Google Drive that are accessible by him immediately.” Plaintiffs also stated that they would be “happy to discuss this with you further if 22 you can provide a reason for the delay, but at this point, all evidence indicates that Kludt . . . has 23 ample responsive documents that he is deliberately refusing to produce.” Plaintiffs once again 24 stated that if Kludt would not respond to their discovery requests, they would have to bring a 25 motion to compel and for sanctions. (Vierra Decl., Ex. 3.) 26 Poe responded with a perplexing email accusing Plaintiffs of trying “to impose legal 27 expenses on all the defendant to reproduce the same documents that are in [their] possession 28 9 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 already,” and inquiring how Plaintiffs “knew” that Kludt had access to hundreds of relevant 2 documents in Google Drive. (Vierra Decl., Ex. 3.) Plaintiffs responded with a detailed email explaining how they knew there were other 3 relevant folders on Defendants’ Google Drive accounts. First, as Poe well knew, Kludt told 4 Plaintiffs these documents existed when he first contacted them and asked to be dismissed. Second, 5 Plaintiffs had located relevant Google Drive links that Kludt had failed to share. Plaintiffs first 6 provided Poe with a link to the “Moore Rd Woodside” 4 folder, which they noted “is public and 7 contains hundreds of clearly responsive documents.” Plaintiffs noted, among other things, that the 8 activity log showed that “Kludt created and operated this folder,” and further, that based on other details of the folder, it was clear that additional responsive documents existed outside the folder. 9 Plaintiffs also provided Poe with a link to the “3-31-20” 5 folder, also created and operated by 10 Kludt, that contained indisputably responsive documents. Plaintiffs also provided Poe with a link 11 to a third folder (name unknown) to which they had requested access, but to which access had not 12 been granted. 6 (Access still has not been granted). Plaintiffs further noted that by analyzing these 13 folders, they could glean that Kludt had used at least four different accounts to operate files 14 indisputably relevant to this litigation. (Vierra Decl., Ex. 3.) Plaintiffs once again offered Kludt an extension, but said, “Please confirm that Kludt will 15 provide us access to all relevant materials including, without limitation, those in the accounts 16 identified above, and provide a reasonable time frame within which those productions will be 17 made. Please also confirm that he will produce all relevant communications.” Plaintiffs concluded 18 by saying that they “would strongly prefer to handle discovery amicably rather than run to the 19 Court over these issues” and once again offered to meet and confer. (Vierra Decl., Ex. 3.) 20 Counsel met and conferred on July 14, 2022. On that call, Plaintiffs offered to incur the 21 cost of downloading, Bates-stamping, and circulating the Google Drive documents to all parties to lessen the burden on Kludt, if Kludt would simply provide Plaintiffs access to the relevant Google 22 Drive materials. However, Kludt’s counsel stated he preferred to do this himself. He also stated 23 that he would aim to produce all relevant emails from each of Kludt’s accounts identified in 24 Plaintiffs’ July 10, 2022 email by August 6, 2022. (Vierra Decl., Ex. 7 & ¶ 16.) 25 On July 18, 2022, Plaintiffs wrote “to follow up about a potential issue with the production 26 of Kludt’s Google Drive documents.” They explained that Google Drive preserves multiple 27 4 https://drive.google.com/drive/folders/1NHpE8d8j_W3WueEDKhsz9EF_CHWa4Ci4. 28 5 https://drive.google.com/drive/folders/1Hcd6KnM2NcOFTPw3_oSKjLmjaO9yjXXJ. 6 https://drive.google.com/file/d/1MrhNNZ4hy23Ze-pS1VqtjYa2Q3a4Czxe/view?usp=sharing. 10 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 versions of documents, including metadata showing who created and edited the document, how, 2 and when, and that this information was directly relevant to Plaintiffs’ claims. Plaintiffs noted that while this information can be extracted and produced, 7 it can be difficult and costly to do so. 3 Because Plaintiffs did not wish to impose unnecessary discovery costs on Kludt, Plaintiffs offered 4 Kludt a painless, low cost solution: he could provide Plaintiffs direct access to the documents (as 5 Plaintiffs had proposed previously) in lieu of undertaking the expense of a more complicated 6 production. (Vierra Decl., Ex. 8.) Poe never responded to this email. (Vierra Decl. ¶ 18.) 7 On August 5, 2022, Kludt provided responses and objections to Plaintiffs’ Second Set of 8 Requests for Production (RFP 14), which sought communications between Defendants since the inception of the litigation. Although Defendants do not have a common interest agreement, Kludt 9 nevertheless refused to produce any documents, including on the ground that these 10 communications contained attorney work product. Plaintiffs promptly responded and explained 11 that Kludt’s refusal to produce documents was unwarranted. Plaintiffs also asked Poe and Van 12 Steenis once again “to confirm whether your clients will grant Plaintiffs access to your clients’ 13 relevant Google Drive folders.” Plaintiffs raised the possibility of seeking sanctions if Kludt, 14 Bragg, and SVRV continued to abuse the discovery process. Poe responded to defend Kludt’s privilege objection, after which Plaintiffs provided a further response as to why it was 15 unwarranted. Kludt eventually implicitly agreed to withdraw the objection by producing 16 documents in response to RFP 14, although Kludt seemingly has withheld other documents 17 responsive to this RFP without justification (discussed further below). (Vierra Decl., Ex. 9.) 18 On August 5, 2022, for the first time, Kludt finally gave his counsel access to the “Moore 19 Rd Woodside” folder that Plaintiffs had shared with Poe 26 days earlier. (Vierra Decl. ¶ 20.) 20 On August 8, 2022, Plaintiffs wrote to Poe, noting that Kludt still had not made a “complete 21 production,” despite Poe’s representation that he would aim to do so by August 6, 2022. Plaintiffs also provided additional relevant Google Drive links they had located to which Kludt had not given 22 them access. 8 Plaintiffs informed Poe that Kludt had previously shared these documents with 23 Plaintiffs when soliciting their investments, but that Kludt had subsequently restricted Plaintiffs’ 24 25 7 Plaintiffs’ counsel has substantial experience making such productions. 26 8 See https://docs.google.com/document/d/1b2Uf4rGq5OruQpX3IRilTxLaM- ZbRvO9VA4YsZGlQo0/edit?usp=drive_web&rswr=true; 27 https://docs.google.com/document/d/1fOU_1ZWVk1yQWpNL8IgsBC2mY4tnThavqRBQrtIcu9k/edit?u sp=drive_web&rswr=true; 28 https://docs.google.com/document/d/1fOU_1ZWVk1yQWpNL8IgsBC2mY4tnThavqRBQrtIcu9k/edit?u sp=drive_web&rswr=true. 11 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 access to those documents. To date, Kludt still has not provided access to those folders or the 2 documents within them. Plaintiffs’ counsel further informed Poe that they could see that Kludt still had not even shared the indisputably relevant “3-31-20” folder with his own legal counsel even 3 though Plaintiffs had identified that link for counsel 29 days earlier. (Vierra Decl., Ex. 10.) 4 On August 8, 2022, Kludt finally shared a link to the “Moore Rd Woodside” folder with 5 Plaintiffs—29 days after Plaintiffs had shared that link with Poe and informed him that its contents 6 were publicly available. (Vierra Decl. ¶ 22.) 7 On August 9, 2022, Kludt produced 23 documents (only 7 of which were communications) 8 in response to RFP 14. Plaintiffs thanked Kludt for the production but identified at least two communications that were referenced elsewhere and appeared to be missing from the production 9 (to say nothing of the other communications that Plaintiffs have strong reason to believe occurred, 10 but which they could not specifically identify). (Vierra Decl., Ex. 11.) 11 On August 10, 2022, Kludt produced his first set of communications in response to 12 Plaintiffs’ First Set of Requests for Production (RFPs 1–13), which appear to have been 13 downloaded exclusively from his k@realsv.com account, despite the fact that on July 10, 2022, 14 Plaintiffs identified for Poe at least three other email accounts that Kludt used when managing the Moore Road Project. (Vierra Decl. ¶ 25.) 15 After Kludt produced 1 more document 9 in response to RFP 14, on August 11, 2022, 16 Plaintiffs followed up about the other apparently missing document (again, to say nothing of the 17 other missing communications that Plaintiffs could not specifically identify). Plaintiffs also 18 informed Kludt that they had located several more relevant Google Drive and other cloud 19 application links in the Paramont Defendants’ productions that Kludt had failed to produce. 20 Plaintiffs also reminded Poe that Kludt had previously stated that he had relevant documents in 21 Box, but that no Box link had been shared with Plaintiffs. Plaintiffs asked once again when Kludt would provide access to all relevant links. (Vierra Decl., Ex. 13.) 22 Plaintiffs also thanked Kludt for the recent productions but again noted that Kludt’s 23 production was woefully incomplete. Poe responded that he would have to “confer with [Kludt]” 24 as to whether Kludt would produce any more documents, confirming that he is permitting Kludt 25 to self-collect documents and communications. To date, Kludt has not produced any additional 26 documents. (Vierra Decl., Ex. 13.). 27 9 In producing this document, Poe remarked, “[Kludt had forwarded that [document] to me, but I’d 28 missed it in compiling them for production. Those are all of the responsive documents.” Once again, this implies that Poe is permitting Kludt to self-collect communications. (Vierra Decl., Ex. 12.) 12 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 On August 17, 2022, Plaintiffs, consistent with their offer, produced the contents of the 2 “Moore Rd Folder” to all Defendants after incurring the costs of downloading, hosting, processing, and Bates-stamping those documents themselves. (Vierra Delc. ¶ 28.) 3 BRAGG, SVRV, AND VAN STEENIS 4 Since Plaintiffs filed their previous motion to compel and for sanctions against Bragg and 5 SVRV, Plaintiffs have learned of additional misconduct by Bragg and SVRV and by their counsel, 6 Van Steenis. In particular, Plaintiffs have learned that Bragg and SVRV (and Kludt) were 7 communicating with Van Steenis about this litigation at least as early as May 12, 2022, before 8 Bragg wrote Plaintiffs on May 18, 2022 to say, “My attorney [Van Steenis] will be reaching out to you soon.” As described further below, Van Steenis did not respond to Plaintiffs for 8 weeks. 9 Not until Plaintiffs raised the prospect of sanctions against Van Steenis personally did he bother 10 to respond. A condensed timeline of Bragg’s, SVRV’s and Van Steenis’s misconduct follows: 11 On March 18, 2022, Bragg wrote to Kludt, “FYI…I just got served at the firehouse.” 12 (Vierra Decl., Ex. 14.) 13 On May 12, 2022, Bragg wrote to Kludt, “What’s the due date and have you responded to 14 the Arntsen’s [sic]. . . . Their attorney called me today and left a message and also sent an email that I forwarded you.” (Vierra Decl., Ex. 15.) 15 Also on May 12, 2022, Bragg forwarded Plaintiffs’ service email to Van Steenis and Kludt, 16 writing, “Ryan, Should I make the initial call to this guy to let him know that we are out of business 17 and don’t have funds? Also, [Kludt, w]e haven’t had much time to speak about strategy for this 18 one. Do you have any input