Preview
1 Collin J. Vierra (State Bar No. 322720)
EIMER STAHL LLP
2 99 Almaden Blvd., Suite 600
San Jose, CA 95113-1605
3 Telephone: (408) 889-1668
Email: cvierra@eimerstahl.com
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Attorney for Plaintiffs Robert Arntsen,
5 Mary Lee. Arntsen Family Partnership, LP,
Brian Christopher Dunn Custodianship
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7 SUPERIOR COURT OF THE STATE OF CALIFORNIA
8 COUNTY OF SAN MATEO
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Robert Arntsen; Mary Lee; Arntsen Family Case No. 22-CIV-01148
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Partnership, LP; and Brian Christopher Dunn
11 Custodianship; Date: August 4, 2023
Time: 9:00 A.M. PST
12 Plaintiffs, Dept. 21
v.
13 Hon. Robert D. Foiles
14 David M. Bragg; Silicon Valley Real Ventures
LLC; SVRV 385 Moore, LLC; SVRV 387 MEMORANDUM OF POINTS AND
15 Moore, LLC; Gregory J. Davis; Kevin Wolfe; AUTHORITIES IN SUPPORT OF
James Justesen; Paramont Woodside, LLC; MOTION TO COMPEL AND FOR
16 and Paramont Capital, LLC; SANCTIONS AGAINST DEFENDANTS
DAVID M. BRAGG AND SILICON
17 Defendants. VALLEY REAL VENTURES, LLC
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 TABLE OF CONTENTS
2 TABLE OF AUTHORITIES .......................................................................................................... 3
3 BACKGROUND AND SUMMARY OF ARGUMENT ............................................................... 4
4 LEGAL STANDARD ..................................................................................................................... 5
5 REASONS WHY SANCTIONS AND AN ORDER TO COMPEL ARE NECESSARY ............ 6
6 1. BRAGG INTENTIONALLY SPOLIATED ALL OF HIS TEXT MESSAGES (AND
SVRV’S WEBSITE) .............................................................................................................. 7
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2. BRAGG WITHHELD THOUSANDS OF RESPONSIVE DOCUMENTS FOR NEARLY
8 A YEAR—AND CONTINUES TO WITHHOLD NUMEROUS RESPONSIVE
DOCUMENTS ....................................................................................................................... 9
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3. BRAGG HAS LODGED FRIVOLOUS OBJECTIONS AND FAILED TO RESPOND TO
10 NUMEROUS DISCOVERY REQUESTS .......................................................................... 11
11 4. BRAGG HAS REFUSED TO RESPOND TO COMMUNICATIONS FROM
PLAINTIFFS’ COUNSEL AND TO MEET AND CONFER ............................................ 13
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5. BRAGG HAS VIOLATED THREE SEPARATE IDC ORDERS...................................... 14
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6. BRAGG HAS MADE REPEATED FALSE STATEMENTS TO PLAINTIFFS AND THE
14 COURT ................................................................................................................................ 16
15 BRAGG’S MISCONDUCT HAS SEVERELY PREJUDICED PLAINTIFFS ........................... 16
16 CONCLUSION ............................................................................................................................. 16
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 TABLE OF AUTHORITIES
2
Cases
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Cedar-Sinai Med. Cntr. v. Super. Ct.,
4 (1998) 18 Cal.4th 1 ..................................................................................................................... 7
5 City of L.A. v. PricewaterhouseCoopers, LLC,
(2022) 84 Cal.App.5th 466 ..................................................................................................... 6, 7
6
Dep’t of Forestry & Fire Prot. v. Howell,
7 (2017) 18 Cal.App.5th 154 ............................................................................................. 6, 10, 16
8
Stephen Slesinger, Inc. v. Walt Disney Co.,
9 (2007) 155 Cal.App.4th 736 ....................................................................................................... 6
10 Vella v. Hudgins,
(1984) 151 Cal. App. 3d 515 ...................................................................................................... 6
11
Williams v. Russ,
12 (2008) 167 Cal. App. 4th 1215 ............................................................................................... 7, 9
13 Kwan Software Eng’g, Inc. v. Hennings,
14 (2020) 58 Cal. App. 5th 57 ....................................................................................................... 16
15 Statutes
16 11 U.S.C. § 101(12) ...................................................................................................................... 12
17 Cal. Penal Code § 135 ..................................................................................................................... 7
18 Code of Civil Procedure § 2023.010...................................................................................... passim
19 Code of Civil Procedure § 2023.020......................................................................................... 6, 13
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Code of Civil Procedure § 2023.030............................................................................................... 6
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Code of Civil Procedure § 2030.290............................................................................................... 6
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Code of Civil Procedure § 2031.300............................................................................................... 6
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Code of Civil Procedure § 2033.280............................................................................................... 6
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Other Authorities
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Andrew Arnold, Forbes, Here’s How Social Media Can Be Used Against You In Court,
26 https://tinyurl.com/yse4uhzs (Dec. 30, 2018) ............................................................................ 7
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
BACKGROUND AND SUMMARY OF ARGUMENT
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In this action, Plaintiffs allege that Bragg and his alter-ego, SVRV, 1 operated a multi-
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million-dollar Ponzi scheme through which they defrauded Plaintiffs out of more than $750,000.
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(FAC ¶ 2.) As part of that scheme, Bragg presented Plaintiffs with Effective Operating Agreements
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that governed their investments in the Moore Road Project. (Id. ¶ 54) Bragg then secretly entered
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into Unapproved Operating Agreements with his co-Defendants in this action, the Paramont
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Defendants, that purported to eliminate Plaintiffs’ interest in the Moore Road Project entirely. (Id.
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¶ 6.) When the Moore Road properties sold, Bragg and the Paramont Defendants reaped hundreds
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of thousands of dollars in profits while Plaintiffs were left with nothing. (Id. ¶ 137.) Through his
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management of SVRV and the Moore Road Project, Bragg also siphoned millions of dollars from
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investors for his personal enrichment. (Id. ¶ 142.)
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Before initiating this action, Plaintiffs sought for over a year to learn what had happened
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with the Moore Road Project that resulted in their complete loss of over $750,000. (Id. ¶¶ 144–
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54.) But Bragg refused to provide that information, likely because it would have proved his fraud.
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(Id.) Plaintiffs therefore initiated this action on March 15, 2022, but Bragg defaulted. (Vierra Aff.
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(June 9, 2022).)
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Bragg also refused to provide discovery. Plaintiffs first served Bragg with requests for
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production in May 2022, but he did not provide responses and objections until August 29, 2022,
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after Plaintiffs filed a motion to compel and for sanctions. (Vierra Decl., Ex. A.) By that time,
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Plaintiffs had already discovered hundreds of responsive documents that were indisputably in
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Bragg’s possession but which he had failed to produce, and they discovered thousands more in the
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succeeding months. (Dft. Jdgmt. MPA (Mar. 21, 2023), at 13–14.) Bragg refused to produce any
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of these documents, and he continues to withhold numerous responsive documents that are
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exclusively in his possession, and which Plaintiffs therefore cannot obtain from third parties. (Id.)
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Bragg’s recent (yet still incomplete) productions are a tacit admission that he purposefully
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withheld thousands of responsive documents from Plaintiffs during the past year. (Vierra Decl.
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¶¶ 14–22.) He has offered no justification for this deliberate obstruction.
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Hereinafter, Plaintiffs refer to Bragg and SVRV collectively as “Bragg” unless otherwise noted. Plaintiffs allege that
SVRV is Bragg’s alter-ego. (FAC ¶ 24.)
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 Bragg has engaged in myriad other willful discovery abuses. The worst of these is that
2 Bragg spoliated all of his text messages months after this litigation began while producing zero
3 such messages, even after Plaintiffs (a) sent him explicit legal hold notices, (b) requested text
4 messages in discovery, and (c) warned Bragg’s counsel to ensure that Bragg would not spoliate
5 further evidence (as Bragg had already apparently spoliated SVRV’s website at the outset of this
6 case). (Id. ¶¶ 41, 47 & Exs. A, I, R, U, W; see FAC ¶ 160.) As the IDC Commissioner recognized,
7 this spoliation constitutes “problematic, and likely, sanctionable conduct.” (Vierra Decl., Ex.
8 AA.) Bragg’s other discovery abuses include directing his counsel not to speak with Plaintiffs’
9 counsel by phone for more than eight months, refusing to respond to dozens of Plaintiffs’ emails,
10 lodging frivolous objections and refusing to respond to discovery, violating three orders to submit
11 timely letter briefs to the IDC, making false statements to Plaintiffs and the Court, and more.
12 Bragg’s more than year-long discovery misconduct is extraordinary, and it has (and
13 continues to) severely prejudice Plaintiffs—two of whom have suffered strokes in the past year
14 (id. ¶ 42)—by delaying their ability to litigate this action; imposing unnecessary expenses on
15 Plaintiffs; and, in the case of the spoliation, permanently denying them access to highly probative
16 information. In addition to issuing monetary, contempt, and terminating sanctions, the Court
17 should order Bragg’s counsel to take direct responsibility for producing all outstanding discovery
18 to Plaintiffs immediately.
19 LEGAL STANDARD
20 Under Code of Civil Procedure section 2023.010, “misuses of the discovery process”
21 include, without limitation, “[e]mploying a discovery method in a manner or to an extent that
22 causes unwarranted annoyance . . . , or oppression, or undue burden and expense” (subd. (c)),
23 “[f]ailing to respond or to submit to an authorized method of discovery” (subd. (d)), “[m]aking,
24 without substantial justification, an unmeritorious objection to discovery” (subd. (e)), “[m]aking
25 an evasive response to discovery” (subd. (f)), “[d]isobeying a court order to provide discovery”
26 (subd. (g)), and “[f]ailing to confer . . . in a reasonable and good faith attempt to resolve informally
27 any dispute concerning discovery” (subd. (i)). Section 2023.030(a) requires the Court to “impose
28 a monetary sanction ordering that one engaging in the misuse of the discovery process . . . pay the
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 reasonable expenses, including attorneys’ fees, incurred by anyone as a result.” The Court “shall
2 impose that sanction unless it finds that the one subject to the sanction acted with substantial
3 justification or that other circumstances make the imposition of the sanction unjust.” (Id. [emphasis
4 added]; see also id. §§ 2031.300(c), 2030.290(c), 2033.280(c), 2023.020.) “The amount to be
5 awarded as attorneys’ fees is left to the sound discretion of the trial court.” (Vella v. Hudgins
6 (1984) 151 Cal. App. 3d 515, 522.) Courts may award attorneys’ fees when a plaintiff is
7 represented on contingency. (See id. at 521.)
8 The Court also “may impose a terminating sanction . . . rendering a judgment by default
9 against the party” that misused the discovery process. (Id. § 2023.030(d)(4).) In fact, “California
10 trial courts have inherent power to issue a terminating sanction when a [party’s] conduct is
11 deliberate, is egregious, and makes lesser sanctions inadequate to ensure a fair trial.” 2 (Stephen
12 Slesinger, Inc. v. Walt Disney Co. (2007) 155 Cal.App.4th 736, 740.) California courts should
13 issue terminating sanctions where, as here, parties engage in “willful, repeated[,] and egregious
14 misuses of the discovery process.” (Dep’t of Forestry & Fire Prot. v. Howell (2017) 18
15 Cal.App.5th 154, 197 [internal quotation marks omitted]; see also, e.g., City of L.A. v.
16 PricewaterhouseCoopers, LLC (2022) 84 Cal.App.5th 466, 499.) The Court also may impose
17 contempt, issue, and/or evidentiary sanctions. (Code Civ. P. §§ 2023.030(b), (c), (e).)
18 REASONS WHY SANCTIONS AND AN ORDER TO COMPEL ARE NECESSARY
19 Bragg’s discovery misconduct in this case has been “willful, repeated, and egregious” and
20 has touched nearly every aspect of the discovery process. (Howell, 18 Cal. App. 5th at 198.) It has
21 effectively delayed this action for more than a year and counting and has caused Plaintiffs
22 substantial prejudice. Bragg has repeatedly and intentionally destroyed relevant evidence,
23 including after that evidence was specifically demanded of him. He has withheld thousands of
24 responsive documents for a year and counting. He has violated multiple IDC orders. Because
25 Bragg’s discovery violations have been “willful” and indicate a “history of abuse,” the Court
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Bragg’s misconduct in this case extends far beyond just the discovery process, and independently justifies
terminating sanctions. (See Dft. Jdgmt. MPA (Mar. 21, 2023).)
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 should issue monetary, contempt, and terminating sanctions. 3 (City of L.A., 84 Cal.App.5th at 499.)
2 Anything less would invite Bragg to drag out these proceedings for another year or more, causing
3 Plaintiffs further prejudice. Bragg’s discovery misconduct can be categorized broadly into six
4 types, described below.
5 1. BRAGG INTENTIONALLY SPOLIATED ALL OF HIS TEXT MESSAGES
6 Spoliation is among the worst discovery abuses a party can commit. (See Cedar-Sinai Med.
7 Cntr. v. Super. Ct. (1998) 18 Cal.4th 1, 9 [describing spoliation as akin to perjury].) It may even
8 be criminally punishable. (Cal. Penal Code § 135.) “A terminating sanction is appropriate in the
9 first instance without a violation of prior court orders in egregious cases of intentional spoliation
10 of evidence.” (Williams v. Russ (2008) 167 Cal. App. 4th 1215, 1223; see also City of L.A. (2022)
11 84 Cal. App. 5th at 508.) “The purposeful destruction of evidence by a client while represented by
12 a lawyer may raise suspicions that the lawyer participated as well.” (Cedar-Sinai, 18 Cal. App. at
13 13.) In Bragg’s counsel’s own words, “It is not advisable to try to delete [relevant evidence].
14 Depending on the circumstances, such activity can be considered serious. . . . [E]very lawyer in
15 this day and age, should advise their clients how to manage their [] content accordingly.” (Andrew
16 Arnold, Forbes, Here’s How Social Media Can Be Used Against You In Court,
17 https://tinyurl.com/yse4uhzs (Dec. 30, 2018) [quoting Mr. Ryan Van Steenis, Bragg’s counsel].)
18 On April 26, 2023—after having never produced a single text message in this case—Bragg
19 admitted that he spoliated all of his text messages earlier this year. That spoliation is particularly
20 egregious in light of Bragg’s (a) litigation history, including in this case, and (b) texting practices,
21 and merits terminating sanctions. The IDC Commissioner himself stated that Bragg’s
22 “destruction of years of prior relevant text messages on his former cell phone . . . is also
23 problematic and likely, sanctionable conduct.” (Vierra Decl, Ex. AA.)
24 a. Litigation History. Bragg has been a serial litigant in state and federal courts dating
25 back to at least 2009. (Vierra Decl. ¶¶ 45–46.) He has been represented by numerous, highly-
26 credentialed counsel, and cannot plausibly claim ignorance of his preservation obligations. (Id.
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Should the Court decline to impose terminating sanctions, it should award issue and evidentiary sanctions in the
alternative as set forth in Plaintiffs’ separate statement.
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 ¶ 46.) Further, since 2019, Bragg has been involved continuously in litigation involving allegations
2 of SVRV-related misconduct. (Id.) In addition to other attorneys, Bragg has been represented by
3 Mr. Van Steenis since at least mid-2021 in connection with another dispute in which Bragg is
4 alleged to have engaged in similar fraudulent conduct on another SVRV project. (Id. & Ex. Z.)
5 Plaintiffs expressly threatened Bragg with this litigation in spring 2021, which should have
6 put him on additional notice to preserve all relevant evidence. (Vierra Decl., Ex. M.) After
7 initiating this action in March 2022, Plaintiffs repeatedly served Bragg with legal hold notices.
8 Bragg received these notices but apparently responded by promptly deleting SVRV’s website. (Id.
9 ¶ 47 & Exs. R, U, W; FAC ¶ 160.) Plaintiffs also served Bragg with discovery seeking responsive
10 communications, including text messages, on May 27, 2022, July 6, 2022, July 11, 2022, and
11 August 31, 2022. (Vierra Decl., Ex. A.) But Bragg never produced any text messages. (Id. ¶ 13.)
12 On September 15, 2022, Plaintiffs expressly told Bragg’s counsel that Bragg had “spoliated
13 evidence by deleting [SVRV’s website] after receiving spoliation warnings,” and therefore
14 instructed Bragg’s counsel to “[p]lease confirm” that Bragg had “not deleted any other documents
15 or communications since the filing of Plaintiffs’ original complaint, or that if [he had], that [he
16 would] undertake all necessary efforts to restore the deleted documents or communications, and
17 identify what was deleted.” (Id., Ex. R.) Several days later, Plaintiffs followed up with the
18 message: “Please confirm that Bragg has not deleted any potentially relevant documents from
19 Google Drive, Dropbox, his email accounts, phones, or hard drives, and that he has not destroyed
20 any potentially relevant hard copy documents.” (Id. [emphasis added].) Bragg never responded to
21 the latter message. (Id. ¶ 41.) On September 27, 2022, Plaintiffs wrote again to Bragg’s counsel,
22 “It is not a waste of Plaintiffs’ time to receive documents from Bragg—who has produced zero
23 text messages, and sparingly few emails, to date. This is especially so when Plaintiffs have
24 evidence of withholding of responsive documents and spoliation.” (Id., Ex. W.)
25 In this same vein, Plaintiffs repeatedly told Bragg’s counsel that it was unacceptable for
26 Bragg to self-collect and -produce documents. (Id. ¶ 26 & Ex. N.) The IDC “Commissioner
27 agreed with Plaintiff[s]” that “Bragg[’s] self-collecting and producing documents that he
28 deems relevant and responsive “is problematic,” and expressly “advised Defense counsel” of
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 this fact. (Id., Ex. AA.) Yet throughout this litigation, Bragg’s counsel has continued to let Bragg
2 self-collect and -produce documents at Bragg’s discretion. (Id. ¶ 26)
3 On December 22, 2022, Plaintiffs initiated an adversary proceeding against Bragg in the
4 federal bankruptcy court and the parties were promptly instructed to participate in a discovery
5 conference and to make initial disclosures. (Id. ¶ 48.) However, Bragg refused to participate in the
6 discovery conference or to produce any documents. (Id.) Separate from Mr. Van Steenis, Bragg
7 also was represented by at least two attorneys in connection with his bankruptcy filing, and another
8 attorney in connection with the adversary proceeding. (Id.)
9 Then, sometime in 2023—after each of these events—Bragg spoliated all of his text
10 messages by trading in his cell phone for a new one without taking any steps to preserve his text
11 messages. (Id. ¶ 38 & Ex. AA; Vierra Decl. (May 19, 2023), Exs. K, L.) Neither Bragg nor his
12 counsel contests this. (Vierra Decl. ¶ 38.) The only reasonable inference is that Bragg committed
13 this spoliation intentionally.
14 b. Bragg’s Texting Practices. Bragg’s text message spoliation is particularly egregious
15 because third-party discovery has revealed that Bragg is a prolific texter and often sent texts with
16 information about the Moore Road Project to his co-defendants and other third parties. (Vierra
17 Decl. ¶ 13.) Moreover, Bragg sometimes spoke about issues via text that he would not speak about
18 via email. For example, after Bragg’s co-defendant settled with Plaintiffs in November 2022, he
19 produced a series of text messages from 2021 indicating that he suspected Bragg of making
20 “falsehoods” to Plaintiffs—just as Plaintiffs allege. (Id. ¶ 12; Vierra Decl. (Mar. 21, 2023), Ex. Y.)
21 Bragg, however, withheld and then spoliated these messages without ever having disclosed them
22 to Plaintiffs. Now, because of Bragg’s spoliation of all of his text messages, Plaintiffs will never
23 receive the remainder of Bragg’s responsive text messages. This intentional spoliation merits
24 terminating sanctions. (Williams, 167 Cal. App. 4th at 1223.)
25 2. BRAGG WITHHELD THOUSANDS OF RESPONSIVE DOCUMENTS
FOR NEARLY A YEAR—AND CONTINUES TO WITHHOLD
26 NUMEROUS RESPONSIVE DOCUMENTS
27 “Failing to respond or to submit to an authorized method of discovery” is a clear “misuse
28 of the discovery process” that merits sanctions. (Code Civ. P. § 2023.010(d).) Terminating
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 sanctions should issue when a party “fail[s] to produce documents it should have produced months
2 earlier.” (Howell, 18 Cal. App. 5th at 198.) Throughout 2022 and into 2023, Bragg asserted
3 repeatedly that he had provided Plaintiffs with all responsive documents while knowing that this
4 was false. (Vierra Decl. ¶¶ 14–22.) In fact, every single time Plaintiffs subpoenaed a third party in
5 this action, they obtained additional documents that were undoubtedly in Bragg’s possession but
6 that he had failed to produce. (Id. ¶ 12 & Ex. N.) In addition, on April 26, 2023, Bragg finally
7 provided Plaintiffs access to his SVRV Google account, which contained thousands more
8 documents that Bragg had been withholding for the past eleven months. (Id. ¶ 14.)
9 Moreover, Bragg is still withholding numerous responsive documents. Although Bragg has
10 asserted that he did not use his personal Google account to conduct SVRV business, this, again,
11 has repeatedly been proven false by third-party discovery. (Vierra Decl. ¶ 21.) In fact, now that
12 Plaintiffs finally have been able to examine Bragg’s SVRV Google account (nearly a year late),
13 they can see that Bragg conducted most of his activity in Google Drive not through this SVRV
14 Google Drive account, but through his personal Google Drive account (which conduct is
15 consistent with Plaintiffs’ alter-ego allegations). (Id. ¶ 22 & Ex. P.) Bragg evidently still has not
16 attempted to search his personal Google Drive account for responsive documents, despite falsely
17 claiming that he has. (Id.) Indeed, as recently as June 6, 2023, Bragg used his personal Google
18 account to remove Plaintiffs’ access to indisputably-responsive files, including two files called
19 “Moore funds overview” and “Bob Arntsen S…” (in a folder called “Robert (Bob) Arntsen”)
20 which Bragg’s former co-defendant previously shared with Plaintiffs via Google Drive. (Id. ¶ 22.)
21 Bragg also continues to withhold numerous responsive communications that are stored
22 exclusively in his personal Gmail account. (Id.) After implicitly acknowledging that his earlier
23 statements were false that no such documents existed, he produced a small number of emails from
24 his personal Gmail account in mid-May 2023 (nearly a year late). 4 (Id. ¶¶ 21–22.) But among other
25 deficiencies, Bragg used a patently inadequate set of search terms. For example, he did not even
26 purport to search for Plaintiffs’ names, “Bob,” “Martha,” and “Mary”; the name of the real estate
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Plaintiffs proposed a starting set of search parameters that Bragg should have used in September 2022 (after Bragg’s
28 discovery responses were already three months overdue), but although Bragg’s counsel said he would “discuss with
[his] client,” Plaintiffs never received a response for eight months. (Vierra Decl. ¶ 26 & Ex. N.)
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 project at the heart of this litigation, “Moore”; or the name of the senior lender for the Project,
2 “Genesis.” (Id. ¶ 22 & Exs. I, P). He also evidently did not search Cc or Bcc fields, and he omitted
3 numerous attachments. (Id.)
4 Because of Bragg’s serial withholding of thousands of responsive documents, Plaintiffs
5 have had to propound discovery on numerous third parties during the past year to obtain relevant
6 discovery. Plaintiffs obtained responsive documents that Bragg should have produced from,
7 among others: Bragg’s former co-defendant (including after he settled with Plaintiffs in November
8 2022), Lukas Leuthold (Bragg’s former accountant), Colleen Marchbank (the broker for the
9 Project), Genesis Capital (the lender for the Project), Bank of America and First Republic Bank
10 (two banks that Bragg used for the Project and SVRV), and even Bragg’s brother, Rich Bragg (to
11 whom Bragg paid nearly $2 million using investor funds). (Dft. Jdgmt. MPA (Mar. 21, 2023), at
12 13–14.) This third-party discovery, which was necessary given Bragg’s recalcitrance and which
13 has revealed the extent of his discovery misconduct, has been highly costly and time consuming.
14 Plaintiffs also obtained numerous documents from the Paramont Defendants that were in
15 Bragg’s possession but never produced. The Paramont Defendants did not retain attachments to
16 emails as a matter as a matter of policy, but Bragg did. (Reply ISO MTC (Sept. 9, 2022), at 10.)
17 Nonetheless, Bragg refused to produce these documents. (Id.) This forced Plaintiffs to take the
18 Paramont Defendants’ depositions without the benefit of full discovery from Bragg, at substantial
19 cost and prejudice. (Vierra Decl. ¶ 43.) Bragg still has not produced many of these. (Id.)
20 Bragg’s refusal to produce thousands of indisputably responsive documents for over a year
21 and counting is inexcusable. This is not a good-faith dispute over the scope of discovery. This is a
22 willful violation of the law that by itself justifies monetary, contempt, and terminating sanctions.
23 3. BRAGG HAS LODGED FRIVOLOUS OBJECTIONS AND FAILED TO
RESPOND TO NUMEROUS DISCOVERY REQUESTS
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“Making, without substantial justification, an unmeritorious objection to discovery” and
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“[m]aking an evasive response to discovery” are also “misuses of the discovery process” that merit
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sanctions. (Code Civ. P. §§ 2023.010(e), (f).) Bragg has repeatedly missed his deadlines to respond
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to Plaintiffs’ discovery requests, in some cases by nearly a year, which also justifies sanctions. For
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 example, Bragg did not respond to Plaintiffs’ May 27, 2022 discovery requests until August 29,
2 2022—only after Plaintiffs filed a motion to compel and for sanctions—and even then, Bragg did
3 not respond to those requests in full. (Vierra Decl., Exs. A–H.) Bragg has still refused to respond
4 to certain of Plaintiffs’ discovery requests outright, which were served at the latest in August 2022.
5 For example, Bragg answered only one of Plaintiffs’ fourth set of special interrogatories, and he
6 lodged blanket objections without responses to the others. (Id., Ex. F) Bragg also lodged blanket
7 objections—and provided no responses—to Plaintiffs’ entire seventh set of special interrogatories.
8 (Id.) Bragg still has not provided any responses or even objections to Plaintiffs’ sixth set of special
9 interrogatories. (Id. & ¶ 9.)
10 Bragg’s objections have also been utterly frivolous. For example, Bragg objected to
11 answering “how much each investor, lender, broker, and manager . . . including Yourself . . . was
12 paid for . . . the SVRV 631 Beach Project” as irrelevant, even though Plaintiffs allege that Bragg
13 improperly used Plaintiffs’ loans for the Moore Road Project to pay for costs associated with the
14 SVRV 631 Beach project in which SVRV held a significant financial stake. (Id.; FAC ¶ 9.) Bragg
15 also refused to answer an RFA stating: “Admit that You invested no money in the [Moore Road]
16 Project” on the nonsensical grounds that the request imposed a “continuing duty to respond to the
17 request” and was “not reasonably calculated to lead to the discovery of any admissible evidence.”
18 (Vierra Decl. Ex. G; FAC ¶¶ 137, 141–43.) The notion that this RFA imposes a “continuing duty”
19 on Bragg is incoherent, as the Moore Road Project concluded in October 2020. (FAC ¶ 129.) And
20 whether Bragg invested any money in the Moore Road Project is obviously relevant to Plaintiffs’
21 claims, which allege that Bragg profited from the Project even though he did not invest any of his
22 own capital in it (despite making misrepresentations to the contrary). (See id. ¶ 137.)
23 In his recent communications with Plaintiffs and belated letter to the IDC, Bragg also took
24 the frivolous position that the bankruptcy court’s order lifting the stay somehow “narrowed” “the
25 scope of Plaintiffs’ discovery” because Bragg does not owe a “genuine debt” to Plaintiffs. (Vierra
26 Decl., Ex. L.) That makes no sense. The bankruptcy code defines “debt” as “liability on a claim.”
27 (11 U.S.C. § 101(12).) In his bankruptcy petition, Bragg expressly asked the bankruptcy court to
28 discharge the “debt” that Plaintiffs claim he owes them. (Vierra Decl. (May 19, 2023), Ex. B, Sch.
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 E/F, p. 5.) In its order lifting the stay, the bankruptcy court explained that because “the debt which
2 Plaintiffs assert is nondischargeable” is not yet the subject of a final judgment, proceedings should
3 continue in this Court, including “all pre-trial . . . proceedings.” (RVS Decl. (Mar. 23, 2023), Ex.
4 pp. 5–7.) In other words, the bankruptcy court lifted the stay so that this Court could determine
5 whether Bragg owes a “debt” to Plaintiffs and, if so, the amount of the “debt.” It did not purport
6 to narrow the scope of discovery.
7 These and numerous other of Bragg’s objections are utterly frivolous and were made in
8 bad faith for the purpose of obstruction and delay. This misconduct should be punished with
9 monetary, contempt, and terminating sanctions.
10 4. BRAGG HAS REFUSED TO RESPOND TO COMMUNICATIONS FROM
PLAINTIFFS’ COUNSEL AND TO MEET AND CONFER
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“Failing to confer . . . in a reasonable and good faith attempt to resolve informally any
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dispute concerning discovery” is also a “misuse of the discovery process” that merits sanctions.
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(Code Civ. P. § 2023.010(i); id. § 2023.020.) Bragg has refused to engage in good-faith meet-and-
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confer efforts with Plaintiffs for over a year. If this provision of the Code of Civil Procedure is to
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be given any force, the Court should impose sanctions.
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Plaintiffs first served Bragg with discovery on May 27, 2022. (Vierra Decl., Exs. A–D.)
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Bragg sought legal advice from Mr. Van Steenis about this action at minimum several weeks
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before he was served with discovery. (MTC (Aug. 25, 2022), at 13.) In addition, Mr. Van Steenis
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was already representing Bragg in another dispute in which investors alleged similar fraudulent
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conduct by Bragg. (Vierra Decl. ¶ 46 & Ex. Z.) Over a week before Plaintiffs served Bragg with
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discovery, Bragg also wrote to Plaintiffs’ counsel, “My attorney will be reaching out to you soon.”
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(MTC (Aug. 25, 2022), at 13.) Yet despite Plaintiffs’ inquiries as to when (if ever) they would
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hear from Bragg’s counsel, no attorney ever contacted Plaintiffs’ counsel. (Id. at 13–14.)
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In July 2022, Bragg finally identified Mr. Van Steenis as his counsel in an email to
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Plaintiffs’ counsel on which Mr. Van Steenis was Cc’d, which said: “Prior to filing the [request
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for an order to compel and for sanctions], Please contact my counsel to discuss further”—which
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Plaintiffs did. (Id.) But over the course of the next week, Mr. Van Steenis refused to respond to
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 twenty-nine emails and a voicemail about this case. (Id.) He only responded after he was personally
2 threatened with sanctions. (Id. at 15.) Shortly after that, Plaintiffs’ counsel had their first—and, for
3 the next eight months—only phone call with Mr. Van Steenis. (Vierra Decl. ¶ 24.) After that, Mr.
4 Van Steenis refused to speak with Plaintiffs’ counsel by phone—including to engage in any meet-
5 and-confer efforts—for the next eight months. 5 (Id.) In September 2022—after refusing to speak
6 with Plaintiffs by phone for nearly two months—Mr. Van Steenis said he would be willing to
7 speak by phone if he could record the conversation. (Id. ¶ 32.) Plaintiffs’ counsel immediately
8 agreed. (Id.) But Mr. Van Steenis then revoked the offer and again refused to meet and confer by
9 phone. (Id.) Instead, he forced Plaintiffs’ counsel to write out numerous lengthy emails detailing
10 Bragg’s discovery misconduct, only to refuse to respond and/or to engage meaningfully with
11 Plaintiffs’ contentions. (Id. ¶¶ 23–24, 26.) When Bragg’s counsel did respond to Plaintiffs’ emails,
12 his responses were purposefully obstructive. In one instance, in October 2022, when Plaintiffs
13 inquired (again) when and whether Bragg would provide discovery, Bragg’s counsel refused to
14 provide any substantive response and instead stated merely that he would “forward” Plaintiffs’
15 questions “to Mr. Bragg.” (Id. ¶ 36 & Ex. J.) Plaintiffs never received a response to this inquiry—
16 and still have not nearly eight months later. (Id.)
17 5. BRAGG HAS VIOLATED THREE SEPARATE IDC ORDERS
18 Disobeying Court orders also merits sanctions. (See Code Civ. P. § 2023.010(g).) Bragg
19 violated all three IDC orders prior to June 2023, demonstrating his contempt for the Court.
20 Plaintiffs scheduled their first IDC with Bragg for September 27, 2022. (Vierra Decl. ¶ 29.)
21 The parties were ordered to submit letter briefs by September 11, 2022. (Id. & Ex. AA.) But Bragg
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Mr. Van Steenis has previously claimed that he would not speak with Plaintiffs’ counsel by phone because he did
23 not trust Plaintiffs’ counsel to accurately recount the parties’ conversation. This is false, and if Mr. Van Steenis makes
this allegation again, the Court should sanction him. The parties had one telephonic conversation in all of 2022. (Vierra
24 Decl. ¶ 24.) That conversation took place in July 2022 before Bragg had even appeared in the case. In that
conversation, Plaintiffs’ counsel informed Mr. Van Steenis (again) of Bragg’s default and his myriad refusals to
25 provide discovery. (Id.) Mr. Van Steenis claimed that Bragg would begin providing discovery, but then Bragg refused
to do so, as the parties’ subsequent written correspondence proves. (Id. & Ex. T.) Mr. Van Steenis has never identified
26 a single statement in Plaintiffs’ meet-and-confer summaries that supposedly contradicted the parties’ conversation
(nor could he). And Plaintiffs’ counsel’s repeated offers to let Mr. Van Steenis record any oral conversations also puts
27 the lie to Mr. Van Steenis’s allegation. (See infra.) Any attempts to gaslight Plaintiffs and the Court about Bragg’s
over-year-long misconduct, and his counsel’s repeated refusals to correspond in good faith with Plaintiffs’ counsel,
28 would independently merit sanctions. (See In re Facebook, Inc. Consumer Privacy User Profile Litig. (N.D. Cal. Feb.
9, 2023) 2023 WL 1871107, at *1.)
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 violated the order, submitting his letter brief 11 days late. (Id.) Moreover, he requested that the
2 IDC be taken off the calendar “until the parties have exhausted all meet and confer obligations,”
3 even though he had refused to speak by phone or even to respond to dozens of Plaintiffs’ emails
4 during the preceding four months. (Id., Ex. O.)
5 After the first IDC, Plaintiffs agreed to continue the IDC to October 27, 2022, rather than
6 bring an immediate motion to compel, because at the September IDC, Bragg’s counsel represented
7 that Plaintiffs’ counsel could sit down with Bragg in-person to identify the relevant documents in
8 Bragg’s Google accounts. (Id. ¶ 33 & Ex. V.) But once the IDC ended, Bragg’s counsel suddenly
9 said that he would need some way to “record” this meeting. (Id.) Plaintiffs’ counsel immediately
10 stated that he could record audio and video of the meeting, but then, just as he had done before,
11 Bragg revoked the offer. (Id.) These demands for audio and video recordings by themselves are
12 sanctionable, as they were employed for the purpose of “caus[ing] unwarranted annoyance, . . .
13 oppression, [and] undue burden and expense.” (Code Civ. P. § 2023.010(c).) Worse, they
14 apparently were bad-faith bluffs on which Bragg did not even intend to follow through.
15 The parties were also ordered to submit letter briefs on October 24, 2022, several days
16 before the continued IDC. (Id. ¶ 30 & Ex. AA.) But SVRV again violated the order. Although
17 Bragg filed for bankruptcy one business day before that deadline, staying these proceedings as to
18 Bragg, SVRV did not claim proceedings were stayed as to it. (Not. of Stay (Oct. 24, 2022).) Yet
19 SVRV failed to submit any letter brief to the IDC. (Vierra Decl. ¶ 30.)
20 When the stay was lifted on February 24, 2023, Plaintiffs immediately sought to put the
21 IDC back on the calendar. (Id. ¶ 31.) Bragg’s counsel took six days to confirm his availability for
22 the IDC, which was scheduled two months out. (Id.) Once Bragg’s counsel confirmed his
23 availability, the parties were ordered to submit letter briefs by March 8, 2023. (Id. & Ex. AA) But
24 Bragg again violated the order, this time submitting his letter brief 40 days late. (Id.) But this did
25 not stop Bragg from falsely insinuating in his recent case management statement that he had
26 submitted an IDC letter nearly a month earlier, writing: “See Plaintiffs and Defendants’ IDC letters
27 for the upcoming IDC conference.” (CMS (Mar. 21, 2022) [emphasis added].) These false
28 statements and violations of Court orders merit sanctions.
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
6. BRAGG HAS MADE REPEATED FALSE STATEMENTS TO
1 PLAINTIFFS AND THE COURT
2 “[P]roviding false discovery responses,” or making false statements to the Court, also
3 merits sanctions. (Howell, 18 Cal. App. 5th at 191; see also Kwan Software Eng’g, Inc. v. Hennings
4 (2020) 58 Cal. App. 5th 57, 74.) Bragg has made repeated, willfully false statements to Plaintiffs
5 and the Court. For example, Bragg asserted in a verified interrogatory response that “none of the
6 amounts invested [in the Moore Road Project] were paid back” while knowing that both Paramont
7 Woodside and Genesis received a full return of their capital plus a profit. (Vierra Decl., Ex. F.)
8 Bragg also falsely told the IDC on April 17, 2023 that “any documents Bragg is aware of on the
9 Google Drive that pertained to the Moore Road project has been provided to Plaintiffs”—even
10 though Bragg did not provide access to his SVRV Google account until April 26, 2023, after the
11 parties’ April 20, 2023 IDC. (Id. ¶¶ 18, 31 & Ex. L; see also id. ¶¶ 15–16.) Bragg must be
12 sanctioned for his willfully false statements. (Kwan, 58 Cal. App. 5th at 75.)
13 BRAGG’S MISCONDUCT HAS SEVERELY PREJUDICED PLAINTIFFS
14 Plaintiffs have been and continue to be severely prejudiced by Bragg’s misconduct.
15 Plaintiffs still have not received full responses to discovery that they propounded over a year ago.
16 In May 2023—more than fourteen months after Plaintiffs initiated this action—Plaintiffs had to
17 take the Paramont Defendants’ depositions without numerous, highly-salient documents or written
18 discovery responses from Bragg. (Vierra Decl. ¶ 43.) Two of the Plaintiffs have suffered strokes
19 in the past year while this litigation has dragged out. (Id.) Plaintiffs have had to obtain documents
20 from numerous third parties at substantial expense even though Bragg could have made these
21 available with the press of a button by giving Plaintiffs access to his various accounts. (Id. ¶ 12.)
22 And Plaintiffs will never receive Bragg’s text messages because he intentionally spoliated all of
23 them. (Id. ¶¶ 38–39.) The only appropriate punishment for this egregious misconduct is to order
24 monetary, contempt, and terminating sanctions.
25 CONCLUSION
26 Bragg has shown utter contempt for his discovery obligations throughout this litigation.
27 The Court should impose contempt and terminating sanctions on Bragg for his flagrant discovery
28 abuses. The Court should also compel Bragg to provide Plaintiffs with all other responsive
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
1 documents from his other accounts and devices—and Bragg’s counsel should be required to take
2 responsibility for these productions. Bragg further should face a monetary sanction of up to
3 $90,123 for his egregious discovery misconduct, which is less than the amount of fees and costs
4 that Plaintiffs have effectively been forced to incur as a result of Bragg’s discovery misconduct.
5 (See Vierra Decl. ¶¶ 49–50.)
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Dated: June 12, 2023 By: ______________________
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Collin J. Vierra
9 EIMER STAHL, LLP
10 Attorney for Plaintiffs
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION
Preview
1 Collin J. Vierra (State Bar No. 322720) EIMER STAHL LLP 2 99 Almaden Blvd., Suite 600 San Jose, CA 95113-1605 3 Telephone: (408) 889-1668 Email: cvierra@eimerstahl.com 4 Attorney for Plaintiffs Robert Arntsen, 5 Mary Lee. Arntsen Family Partnership, LP, Brian Christopher Dunn Custodianship 6 7 SUPERIOR COURT OF THE STATE OF CALIFORNIA 8 COUNTY OF SAN MATEO 9 Robert Arntsen; Mary Lee; Arntsen Family Case No. 22-CIV-01148 10 Partnership, LP; and Brian Christopher Dunn 11 Custodianship; Date: August 4, 2023 Time: 9:00 A.M. PST 12 Plaintiffs, Dept. 21 v. 13 Hon. Robert D. Foiles 14 David M. Bragg; Silicon Valley Real Ventures LLC; SVRV 385 Moore, LLC; SVRV 387 MEMORANDUM OF POINTS AND 15 Moore, LLC; Gregory J. Davis; Kevin Wolfe; AUTHORITIES IN SUPPORT OF James Justesen; Paramont Woodside, LLC; MOTION TO COMPEL AND FOR 16 and Paramont Capital, LLC; SANCTIONS AGAINST DEFENDANTS DAVID M. BRAGG AND SILICON 17 Defendants. VALLEY REAL VENTURES, LLC 18 19 20 21 22 23 24 25 26 27 28 1 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 TABLE OF CONTENTS 2 TABLE OF AUTHORITIES .......................................................................................................... 3 3 BACKGROUND AND SUMMARY OF ARGUMENT ............................................................... 4 4 LEGAL STANDARD ..................................................................................................................... 5 5 REASONS WHY SANCTIONS AND AN ORDER TO COMPEL ARE NECESSARY ............ 6 6 1. BRAGG INTENTIONALLY SPOLIATED ALL OF HIS TEXT MESSAGES (AND SVRV’S WEBSITE) .............................................................................................................. 7 7 2. BRAGG WITHHELD THOUSANDS OF RESPONSIVE DOCUMENTS FOR NEARLY 8 A YEAR—AND CONTINUES TO WITHHOLD NUMEROUS RESPONSIVE DOCUMENTS ....................................................................................................................... 9 9 3. BRAGG HAS LODGED FRIVOLOUS OBJECTIONS AND FAILED TO RESPOND TO 10 NUMEROUS DISCOVERY REQUESTS .......................................................................... 11 11 4. BRAGG HAS REFUSED TO RESPOND TO COMMUNICATIONS FROM PLAINTIFFS’ COUNSEL AND TO MEET AND CONFER ............................................ 13 12 5. BRAGG HAS VIOLATED THREE SEPARATE IDC ORDERS...................................... 14 13 6. BRAGG HAS MADE REPEATED FALSE STATEMENTS TO PLAINTIFFS AND THE 14 COURT ................................................................................................................................ 16 15 BRAGG’S MISCONDUCT HAS SEVERELY PREJUDICED PLAINTIFFS ........................... 16 16 CONCLUSION ............................................................................................................................. 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 Cases 3 Cedar-Sinai Med. Cntr. v. Super. Ct., 4 (1998) 18 Cal.4th 1 ..................................................................................................................... 7 5 City of L.A. v. PricewaterhouseCoopers, LLC, (2022) 84 Cal.App.5th 466 ..................................................................................................... 6, 7 6 Dep’t of Forestry & Fire Prot. v. Howell, 7 (2017) 18 Cal.App.5th 154 ............................................................................................. 6, 10, 16 8 Stephen Slesinger, Inc. v. Walt Disney Co., 9 (2007) 155 Cal.App.4th 736 ....................................................................................................... 6 10 Vella v. Hudgins, (1984) 151 Cal. App. 3d 515 ...................................................................................................... 6 11 Williams v. Russ, 12 (2008) 167 Cal. App. 4th 1215 ............................................................................................... 7, 9 13 Kwan Software Eng’g, Inc. v. Hennings, 14 (2020) 58 Cal. App. 5th 57 ....................................................................................................... 16 15 Statutes 16 11 U.S.C. § 101(12) ...................................................................................................................... 12 17 Cal. Penal Code § 135 ..................................................................................................................... 7 18 Code of Civil Procedure § 2023.010...................................................................................... passim 19 Code of Civil Procedure § 2023.020......................................................................................... 6, 13 20 Code of Civil Procedure § 2023.030............................................................................................... 6 21 Code of Civil Procedure § 2030.290............................................................................................... 6 22 Code of Civil Procedure § 2031.300............................................................................................... 6 23 Code of Civil Procedure § 2033.280............................................................................................... 6 24 Other Authorities 25 Andrew Arnold, Forbes, Here’s How Social Media Can Be Used Against You In Court, 26 https://tinyurl.com/yse4uhzs (Dec. 30, 2018) ............................................................................ 7 27 28 3 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION BACKGROUND AND SUMMARY OF ARGUMENT 1 In this action, Plaintiffs allege that Bragg and his alter-ego, SVRV, 1 operated a multi- 2 million-dollar Ponzi scheme through which they defrauded Plaintiffs out of more than $750,000. 3 (FAC ¶ 2.) As part of that scheme, Bragg presented Plaintiffs with Effective Operating Agreements 4 that governed their investments in the Moore Road Project. (Id. ¶ 54) Bragg then secretly entered 5 into Unapproved Operating Agreements with his co-Defendants in this action, the Paramont 6 Defendants, that purported to eliminate Plaintiffs’ interest in the Moore Road Project entirely. (Id. 7 ¶ 6.) When the Moore Road properties sold, Bragg and the Paramont Defendants reaped hundreds 8 of thousands of dollars in profits while Plaintiffs were left with nothing. (Id. ¶ 137.) Through his 9 management of SVRV and the Moore Road Project, Bragg also siphoned millions of dollars from 10 investors for his personal enrichment. (Id. ¶ 142.) 11 Before initiating this action, Plaintiffs sought for over a year to learn what had happened 12 with the Moore Road Project that resulted in their complete loss of over $750,000. (Id. ¶¶ 144– 13 54.) But Bragg refused to provide that information, likely because it would have proved his fraud. 14 (Id.) Plaintiffs therefore initiated this action on March 15, 2022, but Bragg defaulted. (Vierra Aff. 15 (June 9, 2022).) 16 Bragg also refused to provide discovery. Plaintiffs first served Bragg with requests for 17 production in May 2022, but he did not provide responses and objections until August 29, 2022, 18 after Plaintiffs filed a motion to compel and for sanctions. (Vierra Decl., Ex. A.) By that time, 19 Plaintiffs had already discovered hundreds of responsive documents that were indisputably in 20 Bragg’s possession but which he had failed to produce, and they discovered thousands more in the 21 succeeding months. (Dft. Jdgmt. MPA (Mar. 21, 2023), at 13–14.) Bragg refused to produce any 22 of these documents, and he continues to withhold numerous responsive documents that are 23 exclusively in his possession, and which Plaintiffs therefore cannot obtain from third parties. (Id.) 24 Bragg’s recent (yet still incomplete) productions are a tacit admission that he purposefully 25 withheld thousands of responsive documents from Plaintiffs during the past year. (Vierra Decl. 26 ¶¶ 14–22.) He has offered no justification for this deliberate obstruction. 27 28 1 Hereinafter, Plaintiffs refer to Bragg and SVRV collectively as “Bragg” unless otherwise noted. Plaintiffs allege that SVRV is Bragg’s alter-ego. (FAC ¶ 24.) 4 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 Bragg has engaged in myriad other willful discovery abuses. The worst of these is that 2 Bragg spoliated all of his text messages months after this litigation began while producing zero 3 such messages, even after Plaintiffs (a) sent him explicit legal hold notices, (b) requested text 4 messages in discovery, and (c) warned Bragg’s counsel to ensure that Bragg would not spoliate 5 further evidence (as Bragg had already apparently spoliated SVRV’s website at the outset of this 6 case). (Id. ¶¶ 41, 47 & Exs. A, I, R, U, W; see FAC ¶ 160.) As the IDC Commissioner recognized, 7 this spoliation constitutes “problematic, and likely, sanctionable conduct.” (Vierra Decl., Ex. 8 AA.) Bragg’s other discovery abuses include directing his counsel not to speak with Plaintiffs’ 9 counsel by phone for more than eight months, refusing to respond to dozens of Plaintiffs’ emails, 10 lodging frivolous objections and refusing to respond to discovery, violating three orders to submit 11 timely letter briefs to the IDC, making false statements to Plaintiffs and the Court, and more. 12 Bragg’s more than year-long discovery misconduct is extraordinary, and it has (and 13 continues to) severely prejudice Plaintiffs—two of whom have suffered strokes in the past year 14 (id. ¶ 42)—by delaying their ability to litigate this action; imposing unnecessary expenses on 15 Plaintiffs; and, in the case of the spoliation, permanently denying them access to highly probative 16 information. In addition to issuing monetary, contempt, and terminating sanctions, the Court 17 should order Bragg’s counsel to take direct responsibility for producing all outstanding discovery 18 to Plaintiffs immediately. 19 LEGAL STANDARD 20 Under Code of Civil Procedure section 2023.010, “misuses of the discovery process” 21 include, without limitation, “[e]mploying a discovery method in a manner or to an extent that 22 causes unwarranted annoyance . . . , or oppression, or undue burden and expense” (subd. (c)), 23 “[f]ailing to respond or to submit to an authorized method of discovery” (subd. (d)), “[m]aking, 24 without substantial justification, an unmeritorious objection to discovery” (subd. (e)), “[m]aking 25 an evasive response to discovery” (subd. (f)), “[d]isobeying a court order to provide discovery” 26 (subd. (g)), and “[f]ailing to confer . . . in a reasonable and good faith attempt to resolve informally 27 any dispute concerning discovery” (subd. (i)). Section 2023.030(a) requires the Court to “impose 28 a monetary sanction ordering that one engaging in the misuse of the discovery process . . . pay the 5 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 reasonable expenses, including attorneys’ fees, incurred by anyone as a result.” The Court “shall 2 impose that sanction unless it finds that the one subject to the sanction acted with substantial 3 justification or that other circumstances make the imposition of the sanction unjust.” (Id. [emphasis 4 added]; see also id. §§ 2031.300(c), 2030.290(c), 2033.280(c), 2023.020.) “The amount to be 5 awarded as attorneys’ fees is left to the sound discretion of the trial court.” (Vella v. Hudgins 6 (1984) 151 Cal. App. 3d 515, 522.) Courts may award attorneys’ fees when a plaintiff is 7 represented on contingency. (See id. at 521.) 8 The Court also “may impose a terminating sanction . . . rendering a judgment by default 9 against the party” that misused the discovery process. (Id. § 2023.030(d)(4).) In fact, “California 10 trial courts have inherent power to issue a terminating sanction when a [party’s] conduct is 11 deliberate, is egregious, and makes lesser sanctions inadequate to ensure a fair trial.” 2 (Stephen 12 Slesinger, Inc. v. Walt Disney Co. (2007) 155 Cal.App.4th 736, 740.) California courts should 13 issue terminating sanctions where, as here, parties engage in “willful, repeated[,] and egregious 14 misuses of the discovery process.” (Dep’t of Forestry & Fire Prot. v. Howell (2017) 18 15 Cal.App.5th 154, 197 [internal quotation marks omitted]; see also, e.g., City of L.A. v. 16 PricewaterhouseCoopers, LLC (2022) 84 Cal.App.5th 466, 499.) The Court also may impose 17 contempt, issue, and/or evidentiary sanctions. (Code Civ. P. §§ 2023.030(b), (c), (e).) 18 REASONS WHY SANCTIONS AND AN ORDER TO COMPEL ARE NECESSARY 19 Bragg’s discovery misconduct in this case has been “willful, repeated, and egregious” and 20 has touched nearly every aspect of the discovery process. (Howell, 18 Cal. App. 5th at 198.) It has 21 effectively delayed this action for more than a year and counting and has caused Plaintiffs 22 substantial prejudice. Bragg has repeatedly and intentionally destroyed relevant evidence, 23 including after that evidence was specifically demanded of him. He has withheld thousands of 24 responsive documents for a year and counting. He has violated multiple IDC orders. Because 25 Bragg’s discovery violations have been “willful” and indicate a “history of abuse,” the Court 26 27 28 2 Bragg’s misconduct in this case extends far beyond just the discovery process, and independently justifies terminating sanctions. (See Dft. Jdgmt. MPA (Mar. 21, 2023).) 6 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 should issue monetary, contempt, and terminating sanctions. 3 (City of L.A., 84 Cal.App.5th at 499.) 2 Anything less would invite Bragg to drag out these proceedings for another year or more, causing 3 Plaintiffs further prejudice. Bragg’s discovery misconduct can be categorized broadly into six 4 types, described below. 5 1. BRAGG INTENTIONALLY SPOLIATED ALL OF HIS TEXT MESSAGES 6 Spoliation is among the worst discovery abuses a party can commit. (See Cedar-Sinai Med. 7 Cntr. v. Super. Ct. (1998) 18 Cal.4th 1, 9 [describing spoliation as akin to perjury].) It may even 8 be criminally punishable. (Cal. Penal Code § 135.) “A terminating sanction is appropriate in the 9 first instance without a violation of prior court orders in egregious cases of intentional spoliation 10 of evidence.” (Williams v. Russ (2008) 167 Cal. App. 4th 1215, 1223; see also City of L.A. (2022) 11 84 Cal. App. 5th at 508.) “The purposeful destruction of evidence by a client while represented by 12 a lawyer may raise suspicions that the lawyer participated as well.” (Cedar-Sinai, 18 Cal. App. at 13 13.) In Bragg’s counsel’s own words, “It is not advisable to try to delete [relevant evidence]. 14 Depending on the circumstances, such activity can be considered serious. . . . [E]very lawyer in 15 this day and age, should advise their clients how to manage their [] content accordingly.” (Andrew 16 Arnold, Forbes, Here’s How Social Media Can Be Used Against You In Court, 17 https://tinyurl.com/yse4uhzs (Dec. 30, 2018) [quoting Mr. Ryan Van Steenis, Bragg’s counsel].) 18 On April 26, 2023—after having never produced a single text message in this case—Bragg 19 admitted that he spoliated all of his text messages earlier this year. That spoliation is particularly 20 egregious in light of Bragg’s (a) litigation history, including in this case, and (b) texting practices, 21 and merits terminating sanctions. The IDC Commissioner himself stated that Bragg’s 22 “destruction of years of prior relevant text messages on his former cell phone . . . is also 23 problematic and likely, sanctionable conduct.” (Vierra Decl, Ex. AA.) 24 a. Litigation History. Bragg has been a serial litigant in state and federal courts dating 25 back to at least 2009. (Vierra Decl. ¶¶ 45–46.) He has been represented by numerous, highly- 26 credentialed counsel, and cannot plausibly claim ignorance of his preservation obligations. (Id. 27 28 3 Should the Court decline to impose terminating sanctions, it should award issue and evidentiary sanctions in the alternative as set forth in Plaintiffs’ separate statement. 7 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 ¶ 46.) Further, since 2019, Bragg has been involved continuously in litigation involving allegations 2 of SVRV-related misconduct. (Id.) In addition to other attorneys, Bragg has been represented by 3 Mr. Van Steenis since at least mid-2021 in connection with another dispute in which Bragg is 4 alleged to have engaged in similar fraudulent conduct on another SVRV project. (Id. & Ex. Z.) 5 Plaintiffs expressly threatened Bragg with this litigation in spring 2021, which should have 6 put him on additional notice to preserve all relevant evidence. (Vierra Decl., Ex. M.) After 7 initiating this action in March 2022, Plaintiffs repeatedly served Bragg with legal hold notices. 8 Bragg received these notices but apparently responded by promptly deleting SVRV’s website. (Id. 9 ¶ 47 & Exs. R, U, W; FAC ¶ 160.) Plaintiffs also served Bragg with discovery seeking responsive 10 communications, including text messages, on May 27, 2022, July 6, 2022, July 11, 2022, and 11 August 31, 2022. (Vierra Decl., Ex. A.) But Bragg never produced any text messages. (Id. ¶ 13.) 12 On September 15, 2022, Plaintiffs expressly told Bragg’s counsel that Bragg had “spoliated 13 evidence by deleting [SVRV’s website] after receiving spoliation warnings,” and therefore 14 instructed Bragg’s counsel to “[p]lease confirm” that Bragg had “not deleted any other documents 15 or communications since the filing of Plaintiffs’ original complaint, or that if [he had], that [he 16 would] undertake all necessary efforts to restore the deleted documents or communications, and 17 identify what was deleted.” (Id., Ex. R.) Several days later, Plaintiffs followed up with the 18 message: “Please confirm that Bragg has not deleted any potentially relevant documents from 19 Google Drive, Dropbox, his email accounts, phones, or hard drives, and that he has not destroyed 20 any potentially relevant hard copy documents.” (Id. [emphasis added].) Bragg never responded to 21 the latter message. (Id. ¶ 41.) On September 27, 2022, Plaintiffs wrote again to Bragg’s counsel, 22 “It is not a waste of Plaintiffs’ time to receive documents from Bragg—who has produced zero 23 text messages, and sparingly few emails, to date. This is especially so when Plaintiffs have 24 evidence of withholding of responsive documents and spoliation.” (Id., Ex. W.) 25 In this same vein, Plaintiffs repeatedly told Bragg’s counsel that it was unacceptable for 26 Bragg to self-collect and -produce documents. (Id. ¶ 26 & Ex. N.) The IDC “Commissioner 27 agreed with Plaintiff[s]” that “Bragg[’s] self-collecting and producing documents that he 28 deems relevant and responsive “is problematic,” and expressly “advised Defense counsel” of 8 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 this fact. (Id., Ex. AA.) Yet throughout this litigation, Bragg’s counsel has continued to let Bragg 2 self-collect and -produce documents at Bragg’s discretion. (Id. ¶ 26) 3 On December 22, 2022, Plaintiffs initiated an adversary proceeding against Bragg in the 4 federal bankruptcy court and the parties were promptly instructed to participate in a discovery 5 conference and to make initial disclosures. (Id. ¶ 48.) However, Bragg refused to participate in the 6 discovery conference or to produce any documents. (Id.) Separate from Mr. Van Steenis, Bragg 7 also was represented by at least two attorneys in connection with his bankruptcy filing, and another 8 attorney in connection with the adversary proceeding. (Id.) 9 Then, sometime in 2023—after each of these events—Bragg spoliated all of his text 10 messages by trading in his cell phone for a new one without taking any steps to preserve his text 11 messages. (Id. ¶ 38 & Ex. AA; Vierra Decl. (May 19, 2023), Exs. K, L.) Neither Bragg nor his 12 counsel contests this. (Vierra Decl. ¶ 38.) The only reasonable inference is that Bragg committed 13 this spoliation intentionally. 14 b. Bragg’s Texting Practices. Bragg’s text message spoliation is particularly egregious 15 because third-party discovery has revealed that Bragg is a prolific texter and often sent texts with 16 information about the Moore Road Project to his co-defendants and other third parties. (Vierra 17 Decl. ¶ 13.) Moreover, Bragg sometimes spoke about issues via text that he would not speak about 18 via email. For example, after Bragg’s co-defendant settled with Plaintiffs in November 2022, he 19 produced a series of text messages from 2021 indicating that he suspected Bragg of making 20 “falsehoods” to Plaintiffs—just as Plaintiffs allege. (Id. ¶ 12; Vierra Decl. (Mar. 21, 2023), Ex. Y.) 21 Bragg, however, withheld and then spoliated these messages without ever having disclosed them 22 to Plaintiffs. Now, because of Bragg’s spoliation of all of his text messages, Plaintiffs will never 23 receive the remainder of Bragg’s responsive text messages. This intentional spoliation merits 24 terminating sanctions. (Williams, 167 Cal. App. 4th at 1223.) 25 2. BRAGG WITHHELD THOUSANDS OF RESPONSIVE DOCUMENTS FOR NEARLY A YEAR—AND CONTINUES TO WITHHOLD 26 NUMEROUS RESPONSIVE DOCUMENTS 27 “Failing to respond or to submit to an authorized method of discovery” is a clear “misuse 28 of the discovery process” that merits sanctions. (Code Civ. P. § 2023.010(d).) Terminating 9 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 sanctions should issue when a party “fail[s] to produce documents it should have produced months 2 earlier.” (Howell, 18 Cal. App. 5th at 198.) Throughout 2022 and into 2023, Bragg asserted 3 repeatedly that he had provided Plaintiffs with all responsive documents while knowing that this 4 was false. (Vierra Decl. ¶¶ 14–22.) In fact, every single time Plaintiffs subpoenaed a third party in 5 this action, they obtained additional documents that were undoubtedly in Bragg’s possession but 6 that he had failed to produce. (Id. ¶ 12 & Ex. N.) In addition, on April 26, 2023, Bragg finally 7 provided Plaintiffs access to his SVRV Google account, which contained thousands more 8 documents that Bragg had been withholding for the past eleven months. (Id. ¶ 14.) 9 Moreover, Bragg is still withholding numerous responsive documents. Although Bragg has 10 asserted that he did not use his personal Google account to conduct SVRV business, this, again, 11 has repeatedly been proven false by third-party discovery. (Vierra Decl. ¶ 21.) In fact, now that 12 Plaintiffs finally have been able to examine Bragg’s SVRV Google account (nearly a year late), 13 they can see that Bragg conducted most of his activity in Google Drive not through this SVRV 14 Google Drive account, but through his personal Google Drive account (which conduct is 15 consistent with Plaintiffs’ alter-ego allegations). (Id. ¶ 22 & Ex. P.) Bragg evidently still has not 16 attempted to search his personal Google Drive account for responsive documents, despite falsely 17 claiming that he has. (Id.) Indeed, as recently as June 6, 2023, Bragg used his personal Google 18 account to remove Plaintiffs’ access to indisputably-responsive files, including two files called 19 “Moore funds overview” and “Bob Arntsen S…” (in a folder called “Robert (Bob) Arntsen”) 20 which Bragg’s former co-defendant previously shared with Plaintiffs via Google Drive. (Id. ¶ 22.) 21 Bragg also continues to withhold numerous responsive communications that are stored 22 exclusively in his personal Gmail account. (Id.) After implicitly acknowledging that his earlier 23 statements were false that no such documents existed, he produced a small number of emails from 24 his personal Gmail account in mid-May 2023 (nearly a year late). 4 (Id. ¶¶ 21–22.) But among other 25 deficiencies, Bragg used a patently inadequate set of search terms. For example, he did not even 26 purport to search for Plaintiffs’ names, “Bob,” “Martha,” and “Mary”; the name of the real estate 27 4 Plaintiffs proposed a starting set of search parameters that Bragg should have used in September 2022 (after Bragg’s 28 discovery responses were already three months overdue), but although Bragg’s counsel said he would “discuss with [his] client,” Plaintiffs never received a response for eight months. (Vierra Decl. ¶ 26 & Ex. N.) 10 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 project at the heart of this litigation, “Moore”; or the name of the senior lender for the Project, 2 “Genesis.” (Id. ¶ 22 & Exs. I, P). He also evidently did not search Cc or Bcc fields, and he omitted 3 numerous attachments. (Id.) 4 Because of Bragg’s serial withholding of thousands of responsive documents, Plaintiffs 5 have had to propound discovery on numerous third parties during the past year to obtain relevant 6 discovery. Plaintiffs obtained responsive documents that Bragg should have produced from, 7 among others: Bragg’s former co-defendant (including after he settled with Plaintiffs in November 8 2022), Lukas Leuthold (Bragg’s former accountant), Colleen Marchbank (the broker for the 9 Project), Genesis Capital (the lender for the Project), Bank of America and First Republic Bank 10 (two banks that Bragg used for the Project and SVRV), and even Bragg’s brother, Rich Bragg (to 11 whom Bragg paid nearly $2 million using investor funds). (Dft. Jdgmt. MPA (Mar. 21, 2023), at 12 13–14.) This third-party discovery, which was necessary given Bragg’s recalcitrance and which 13 has revealed the extent of his discovery misconduct, has been highly costly and time consuming. 14 Plaintiffs also obtained numerous documents from the Paramont Defendants that were in 15 Bragg’s possession but never produced. The Paramont Defendants did not retain attachments to 16 emails as a matter as a matter of policy, but Bragg did. (Reply ISO MTC (Sept. 9, 2022), at 10.) 17 Nonetheless, Bragg refused to produce these documents. (Id.) This forced Plaintiffs to take the 18 Paramont Defendants’ depositions without the benefit of full discovery from Bragg, at substantial 19 cost and prejudice. (Vierra Decl. ¶ 43.) Bragg still has not produced many of these. (Id.) 20 Bragg’s refusal to produce thousands of indisputably responsive documents for over a year 21 and counting is inexcusable. This is not a good-faith dispute over the scope of discovery. This is a 22 willful violation of the law that by itself justifies monetary, contempt, and terminating sanctions. 23 3. BRAGG HAS LODGED FRIVOLOUS OBJECTIONS AND FAILED TO RESPOND TO NUMEROUS DISCOVERY REQUESTS 24 “Making, without substantial justification, an unmeritorious objection to discovery” and 25 “[m]aking an evasive response to discovery” are also “misuses of the discovery process” that merit 26 sanctions. (Code Civ. P. §§ 2023.010(e), (f).) Bragg has repeatedly missed his deadlines to respond 27 to Plaintiffs’ discovery requests, in some cases by nearly a year, which also justifies sanctions. For 28 11 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 example, Bragg did not respond to Plaintiffs’ May 27, 2022 discovery requests until August 29, 2 2022—only after Plaintiffs filed a motion to compel and for sanctions—and even then, Bragg did 3 not respond to those requests in full. (Vierra Decl., Exs. A–H.) Bragg has still refused to respond 4 to certain of Plaintiffs’ discovery requests outright, which were served at the latest in August 2022. 5 For example, Bragg answered only one of Plaintiffs’ fourth set of special interrogatories, and he 6 lodged blanket objections without responses to the others. (Id., Ex. F) Bragg also lodged blanket 7 objections—and provided no responses—to Plaintiffs’ entire seventh set of special interrogatories. 8 (Id.) Bragg still has not provided any responses or even objections to Plaintiffs’ sixth set of special 9 interrogatories. (Id. & ¶ 9.) 10 Bragg’s objections have also been utterly frivolous. For example, Bragg objected to 11 answering “how much each investor, lender, broker, and manager . . . including Yourself . . . was 12 paid for . . . the SVRV 631 Beach Project” as irrelevant, even though Plaintiffs allege that Bragg 13 improperly used Plaintiffs’ loans for the Moore Road Project to pay for costs associated with the 14 SVRV 631 Beach project in which SVRV held a significant financial stake. (Id.; FAC ¶ 9.) Bragg 15 also refused to answer an RFA stating: “Admit that You invested no money in the [Moore Road] 16 Project” on the nonsensical grounds that the request imposed a “continuing duty to respond to the 17 request” and was “not reasonably calculated to lead to the discovery of any admissible evidence.” 18 (Vierra Decl. Ex. G; FAC ¶¶ 137, 141–43.) The notion that this RFA imposes a “continuing duty” 19 on Bragg is incoherent, as the Moore Road Project concluded in October 2020. (FAC ¶ 129.) And 20 whether Bragg invested any money in the Moore Road Project is obviously relevant to Plaintiffs’ 21 claims, which allege that Bragg profited from the Project even though he did not invest any of his 22 own capital in it (despite making misrepresentations to the contrary). (See id. ¶ 137.) 23 In his recent communications with Plaintiffs and belated letter to the IDC, Bragg also took 24 the frivolous position that the bankruptcy court’s order lifting the stay somehow “narrowed” “the 25 scope of Plaintiffs’ discovery” because Bragg does not owe a “genuine debt” to Plaintiffs. (Vierra 26 Decl., Ex. L.) That makes no sense. The bankruptcy code defines “debt” as “liability on a claim.” 27 (11 U.S.C. § 101(12).) In his bankruptcy petition, Bragg expressly asked the bankruptcy court to 28 discharge the “debt” that Plaintiffs claim he owes them. (Vierra Decl. (May 19, 2023), Ex. B, Sch. 12 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 E/F, p. 5.) In its order lifting the stay, the bankruptcy court explained that because “the debt which 2 Plaintiffs assert is nondischargeable” is not yet the subject of a final judgment, proceedings should 3 continue in this Court, including “all pre-trial . . . proceedings.” (RVS Decl. (Mar. 23, 2023), Ex. 4 pp. 5–7.) In other words, the bankruptcy court lifted the stay so that this Court could determine 5 whether Bragg owes a “debt” to Plaintiffs and, if so, the amount of the “debt.” It did not purport 6 to narrow the scope of discovery. 7 These and numerous other of Bragg’s objections are utterly frivolous and were made in 8 bad faith for the purpose of obstruction and delay. This misconduct should be punished with 9 monetary, contempt, and terminating sanctions. 10 4. BRAGG HAS REFUSED TO RESPOND TO COMMUNICATIONS FROM PLAINTIFFS’ COUNSEL AND TO MEET AND CONFER 11 “Failing to confer . . . in a reasonable and good faith attempt to resolve informally any 12 dispute concerning discovery” is also a “misuse of the discovery process” that merits sanctions. 13 (Code Civ. P. § 2023.010(i); id. § 2023.020.) Bragg has refused to engage in good-faith meet-and- 14 confer efforts with Plaintiffs for over a year. If this provision of the Code of Civil Procedure is to 15 be given any force, the Court should impose sanctions. 16 Plaintiffs first served Bragg with discovery on May 27, 2022. (Vierra Decl., Exs. A–D.) 17 Bragg sought legal advice from Mr. Van Steenis about this action at minimum several weeks 18 before he was served with discovery. (MTC (Aug. 25, 2022), at 13.) In addition, Mr. Van Steenis 19 was already representing Bragg in another dispute in which investors alleged similar fraudulent 20 conduct by Bragg. (Vierra Decl. ¶ 46 & Ex. Z.) Over a week before Plaintiffs served Bragg with 21 discovery, Bragg also wrote to Plaintiffs’ counsel, “My attorney will be reaching out to you soon.” 22 (MTC (Aug. 25, 2022), at 13.) Yet despite Plaintiffs’ inquiries as to when (if ever) they would 23 hear from Bragg’s counsel, no attorney ever contacted Plaintiffs’ counsel. (Id. at 13–14.) 24 In July 2022, Bragg finally identified Mr. Van Steenis as his counsel in an email to 25 Plaintiffs’ counsel on which Mr. Van Steenis was Cc’d, which said: “Prior to filing the [request 26 for an order to compel and for sanctions], Please contact my counsel to discuss further”—which 27 Plaintiffs did. (Id.) But over the course of the next week, Mr. Van Steenis refused to respond to 28 13 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 twenty-nine emails and a voicemail about this case. (Id.) He only responded after he was personally 2 threatened with sanctions. (Id. at 15.) Shortly after that, Plaintiffs’ counsel had their first—and, for 3 the next eight months—only phone call with Mr. Van Steenis. (Vierra Decl. ¶ 24.) After that, Mr. 4 Van Steenis refused to speak with Plaintiffs’ counsel by phone—including to engage in any meet- 5 and-confer efforts—for the next eight months. 5 (Id.) In September 2022—after refusing to speak 6 with Plaintiffs by phone for nearly two months—Mr. Van Steenis said he would be willing to 7 speak by phone if he could record the conversation. (Id. ¶ 32.) Plaintiffs’ counsel immediately 8 agreed. (Id.) But Mr. Van Steenis then revoked the offer and again refused to meet and confer by 9 phone. (Id.) Instead, he forced Plaintiffs’ counsel to write out numerous lengthy emails detailing 10 Bragg’s discovery misconduct, only to refuse to respond and/or to engage meaningfully with 11 Plaintiffs’ contentions. (Id. ¶¶ 23–24, 26.) When Bragg’s counsel did respond to Plaintiffs’ emails, 12 his responses were purposefully obstructive. In one instance, in October 2022, when Plaintiffs 13 inquired (again) when and whether Bragg would provide discovery, Bragg’s counsel refused to 14 provide any substantive response and instead stated merely that he would “forward” Plaintiffs’ 15 questions “to Mr. Bragg.” (Id. ¶ 36 & Ex. J.) Plaintiffs never received a response to this inquiry— 16 and still have not nearly eight months later. (Id.) 17 5. BRAGG HAS VIOLATED THREE SEPARATE IDC ORDERS 18 Disobeying Court orders also merits sanctions. (See Code Civ. P. § 2023.010(g).) Bragg 19 violated all three IDC orders prior to June 2023, demonstrating his contempt for the Court. 20 Plaintiffs scheduled their first IDC with Bragg for September 27, 2022. (Vierra Decl. ¶ 29.) 21 The parties were ordered to submit letter briefs by September 11, 2022. (Id. & Ex. AA.) But Bragg 22 5 Mr. Van Steenis has previously claimed that he would not speak with Plaintiffs’ counsel by phone because he did 23 not trust Plaintiffs’ counsel to accurately recount the parties’ conversation. This is false, and if Mr. Van Steenis makes this allegation again, the Court should sanction him. The parties had one telephonic conversation in all of 2022. (Vierra 24 Decl. ¶ 24.) That conversation took place in July 2022 before Bragg had even appeared in the case. In that conversation, Plaintiffs’ counsel informed Mr. Van Steenis (again) of Bragg’s default and his myriad refusals to 25 provide discovery. (Id.) Mr. Van Steenis claimed that Bragg would begin providing discovery, but then Bragg refused to do so, as the parties’ subsequent written correspondence proves. (Id. & Ex. T.) Mr. Van Steenis has never identified 26 a single statement in Plaintiffs’ meet-and-confer summaries that supposedly contradicted the parties’ conversation (nor could he). And Plaintiffs’ counsel’s repeated offers to let Mr. Van Steenis record any oral conversations also puts 27 the lie to Mr. Van Steenis’s allegation. (See infra.) Any attempts to gaslight Plaintiffs and the Court about Bragg’s over-year-long misconduct, and his counsel’s repeated refusals to correspond in good faith with Plaintiffs’ counsel, 28 would independently merit sanctions. (See In re Facebook, Inc. Consumer Privacy User Profile Litig. (N.D. Cal. Feb. 9, 2023) 2023 WL 1871107, at *1.) 14 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 violated the order, submitting his letter brief 11 days late. (Id.) Moreover, he requested that the 2 IDC be taken off the calendar “until the parties have exhausted all meet and confer obligations,” 3 even though he had refused to speak by phone or even to respond to dozens of Plaintiffs’ emails 4 during the preceding four months. (Id., Ex. O.) 5 After the first IDC, Plaintiffs agreed to continue the IDC to October 27, 2022, rather than 6 bring an immediate motion to compel, because at the September IDC, Bragg’s counsel represented 7 that Plaintiffs’ counsel could sit down with Bragg in-person to identify the relevant documents in 8 Bragg’s Google accounts. (Id. ¶ 33 & Ex. V.) But once the IDC ended, Bragg’s counsel suddenly 9 said that he would need some way to “record” this meeting. (Id.) Plaintiffs’ counsel immediately 10 stated that he could record audio and video of the meeting, but then, just as he had done before, 11 Bragg revoked the offer. (Id.) These demands for audio and video recordings by themselves are 12 sanctionable, as they were employed for the purpose of “caus[ing] unwarranted annoyance, . . . 13 oppression, [and] undue burden and expense.” (Code Civ. P. § 2023.010(c).) Worse, they 14 apparently were bad-faith bluffs on which Bragg did not even intend to follow through. 15 The parties were also ordered to submit letter briefs on October 24, 2022, several days 16 before the continued IDC. (Id. ¶ 30 & Ex. AA.) But SVRV again violated the order. Although 17 Bragg filed for bankruptcy one business day before that deadline, staying these proceedings as to 18 Bragg, SVRV did not claim proceedings were stayed as to it. (Not. of Stay (Oct. 24, 2022).) Yet 19 SVRV failed to submit any letter brief to the IDC. (Vierra Decl. ¶ 30.) 20 When the stay was lifted on February 24, 2023, Plaintiffs immediately sought to put the 21 IDC back on the calendar. (Id. ¶ 31.) Bragg’s counsel took six days to confirm his availability for 22 the IDC, which was scheduled two months out. (Id.) Once Bragg’s counsel confirmed his 23 availability, the parties were ordered to submit letter briefs by March 8, 2023. (Id. & Ex. AA) But 24 Bragg again violated the order, this time submitting his letter brief 40 days late. (Id.) But this did 25 not stop Bragg from falsely insinuating in his recent case management statement that he had 26 submitted an IDC letter nearly a month earlier, writing: “See Plaintiffs and Defendants’ IDC letters 27 for the upcoming IDC conference.” (CMS (Mar. 21, 2022) [emphasis added].) These false 28 statements and violations of Court orders merit sanctions. 15 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 6. BRAGG HAS MADE REPEATED FALSE STATEMENTS TO 1 PLAINTIFFS AND THE COURT 2 “[P]roviding false discovery responses,” or making false statements to the Court, also 3 merits sanctions. (Howell, 18 Cal. App. 5th at 191; see also Kwan Software Eng’g, Inc. v. Hennings 4 (2020) 58 Cal. App. 5th 57, 74.) Bragg has made repeated, willfully false statements to Plaintiffs 5 and the Court. For example, Bragg asserted in a verified interrogatory response that “none of the 6 amounts invested [in the Moore Road Project] were paid back” while knowing that both Paramont 7 Woodside and Genesis received a full return of their capital plus a profit. (Vierra Decl., Ex. F.) 8 Bragg also falsely told the IDC on April 17, 2023 that “any documents Bragg is aware of on the 9 Google Drive that pertained to the Moore Road project has been provided to Plaintiffs”—even 10 though Bragg did not provide access to his SVRV Google account until April 26, 2023, after the 11 parties’ April 20, 2023 IDC. (Id. ¶¶ 18, 31 & Ex. L; see also id. ¶¶ 15–16.) Bragg must be 12 sanctioned for his willfully false statements. (Kwan, 58 Cal. App. 5th at 75.) 13 BRAGG’S MISCONDUCT HAS SEVERELY PREJUDICED PLAINTIFFS 14 Plaintiffs have been and continue to be severely prejudiced by Bragg’s misconduct. 15 Plaintiffs still have not received full responses to discovery that they propounded over a year ago. 16 In May 2023—more than fourteen months after Plaintiffs initiated this action—Plaintiffs had to 17 take the Paramont Defendants’ depositions without numerous, highly-salient documents or written 18 discovery responses from Bragg. (Vierra Decl. ¶ 43.) Two of the Plaintiffs have suffered strokes 19 in the past year while this litigation has dragged out. (Id.) Plaintiffs have had to obtain documents 20 from numerous third parties at substantial expense even though Bragg could have made these 21 available with the press of a button by giving Plaintiffs access to his various accounts. (Id. ¶ 12.) 22 And Plaintiffs will never receive Bragg’s text messages because he intentionally spoliated all of 23 them. (Id. ¶¶ 38–39.) The only appropriate punishment for this egregious misconduct is to order 24 monetary, contempt, and terminating sanctions. 25 CONCLUSION 26 Bragg has shown utter contempt for his discovery obligations throughout this litigation. 27 The Court should impose contempt and terminating sanctions on Bragg for his flagrant discovery 28 abuses. The Court should also compel Bragg to provide Plaintiffs with all other responsive 16 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION 1 documents from his other accounts and devices—and Bragg’s counsel should be required to take 2 responsibility for these productions. Bragg further should face a monetary sanction of up to 3 $90,123 for his egregious discovery misconduct, which is less than the amount of fees and costs 4 that Plaintiffs have effectively been forced to incur as a result of Bragg’s discovery misconduct. 5 (See Vierra Decl. ¶¶ 49–50.) 6 7 Dated: June 12, 2023 By: ______________________ 8 Collin J. Vierra 9 EIMER STAHL, LLP 10 Attorney for Plaintiffs 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION