Motion for Terminating Sanctions in SWEET PRODUCTION, INC., A CALIFORNIA CORPORATION vs. SOLOMON SHA, et al| Trellis.Law

On June 18, 2018 a Motion-Secondary was filed involving a dispute between Sha, Solomon, Sweet Production, Inc., A California Corporation, and Does 1 To 10, Inclusive, Sha, Solomon, for (07) Unlimited Business Tort/Unfair Business Practice in the District Court of San Mateo County.

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DAVID MICLEAN (SBN
.T. 115098)
dmiclean@micleanglcason.com
DANIELLE M. MIHALKANIN (SBN 271442)
FHLEB
SAN EMTFQECEHNTY
dmihalkanjn@micleangleason.com
U.)
JUL 095 2019
MICLEAN GLEASON LLP
411 Borel Avenue, Suite 3 10
A
San Mateo, CA 94402
Telephone: (650) 684—1 181
GNU}

Facsimile: (650) 684—1 182 /1a_ clv— 03110
'

MPA
PAs
and Authorities in Sup;
I
Maemorandum ofPoint s
Attorneys for Defendant and Cross~Comp1ainant
Solomon Sha
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SUPERIOR COURT OF TEE STATE OF CALIFORNIA
1o COUNTY OF SAN MATEO
11

12
SWEET PRODUCTION, INC, a California Case No. 18-CIV—O3 1 10
Corporation,
13
Plaintiff, DEFENDANT SOLOMON SHA’S
14 NIEMORANDUM OF POINTS AND
AUTHORITIES 1N SUPPORT OF MOTION
15
V.
FOR LEAVE OF COURT TO FILE AND
HAVE HEARD SHA’S MOTION FOR
SOLOMON SHA, an individual; and DOES 1 to TERM1NAT1NG SANCTIONS OR
16
10, inclusive,
ALTERNATIVELY TO REOPEN AND
COMPEL DISCOVERY
17 (C.C.P. §§ 2023.010, 2023.030, 2024.050)
Defendants.
18

20 SOLOMON SHA,
Date:
Time:
Department:
AWRon
9:00 a.m.
Law
/ Zl/

& Motion
I 9

21 Cross-Complainant,

22 v.

23
SWEET PRODUCTION, INC, a California

24 corporation; SWEET EXPRESS; MING CHIN;
DOREEN CHIN; and ROES 1 through 10,
25 inclusive,

26 Cross—Defendants.

MPA T90 SHA MOTION FOR LEAVE (CCP 2023.0] O. 2023.030. 2024.050} CASE NO. 18-CIV—03 1 10
Table of Contents
INTRODUCTION 2
...........................................................................................................................

II. BACKGROUND FACTS 4
................................................................................................................

A. SPI and the Chins Refuse to Provide Financial Data to Co-Owner Sha .............................. 4

B. SPI and the Chins Refuse t0 Participate in Discovery ......................................................... 6

C. Sha Files a Motion to Compel 7
.............................................................................................
r

D. Sha’s Second Motion t0 Compel 8
.........................................................................................
\DOONON

E. Sha Requests Entry of Default ............................................................................................. 8

F. SPI and the Chins’ Attempted Trial Sandbag ...................................................................... 8
10
G. Sha Seeks Leave t0 Re-Fﬂe His Motion for Terminating Sanctions and to Compel 9
..........

11
H1. STATEMENT OF LAW 10
................................................................................................................

12
A. Good Cause Exists for Terminating and Other Sanctions
>

0
.......................................... ....... 1

B. The Court Has Discretion t0 Reopen Discovery After a New Trial Date Has Been
14 0
Set. ....................................................................... .............................................................. 1
,

15
C. Good Cause Exists to Have Discovery Motion Heard and/or to Reopen Discovery ......... 10
16
IV. ARGUMENT 11
.................................................................................................................................

17
A. SPI’s Tactical Refusal to Properly and Adequately Respond to the Discovery Is
18 Without Substantial Justiﬁcation Thereby Warranting an Imposition 0f
Terminating Sanctions. 11
......................................................................................................

19
B. Alternatively, the Court Should Grant Sha’vaotion t0 Reopen Discovery ...................... 11
20
1. There IsNecessity and Good Reason for Discovery. 11
............................................
21

2. Sha Was Diligent in His Efforts to Complete Discovery. 12
.....................................
22

23 3. SPI Will Not Be Prejudiccd if Discovery Is Reopened. 13
........................................

24 4. A Negligible Amount of Time Has Elapsed Between the Initial Trial Date
and the New Trial Date. 14
.........................................................................................

25
5 . SP1 Has Refused to Stipulate t0 the Requested Relief. .......................................... 14
26
C. The Court Shall Impose a Monetary Sanction Against a Party or Attorney Who
27
Fails to Confer 14
....................................................................................................................

mm Ten em Mrmmu mp T mm: mm: 7m: m n 7n"): ma 7094 mm CASE No. 18-CIV—03110
V. CONCLUSION 15
..............................................................................................................................

m
Juarez v. Boy Scouts ofAmerica, Inc.
Table

(2000) 81
of Authorities

Cal.App.4th 377 12
..........................................................

Pelton—Shepherd Indus., Inc. v. Delta Packaging Products, Inc. (2008) 165 Cal.App.4th
1568 11
.....................................................................................................................................................

Smaiko Healthcare Consulting, Inc v. Pac. Healthcale Consultants (2007) 148
Cal. App. 4th 390 ......................................... ........ 11
.................................................................................
_.

Williams v VolkswagenwelkAknengelsellschaﬁ (1986) 180 Cal. App. 3d 1244 12
......................................

10 MES.
11 CCP 14
2016.040 .......................................................................................................................................
9,

12 12
CCP 2023.010 (d) and (i) ..........................................................................................................................

13
CCP 8
2024.020 .........................................................................................................................................
3,

14
CCP 15
2024.050 ...................................................................................................................................
3, 8,

15
CCP 4, 9, 10
2024.050(a) ...............................................................................................................................
16
CCP 2023020 14
.............

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IWEMORANDUM OF POINTS AND AUTHORITIES
I. INTRODUCTION
Defendant and Cross—Complainant Solomon Sha (“Sha”) is a 30% owner and was an ofﬁcer of

the commercial bakery Sweet Production, Inc. (“SPI”), the Plaintiff and a Cross-Defendant in this

litigation. Sha has been deﬁauded by the co-owners of SP1, Cross—Defendants Doreen Chin and her

husband Ming Chin (the “Chins”). Although Sha worked at SP1 in delivery and production, the business

and ﬁnances were run by the Chins. Despite SPI growing between 201 1-2017 ﬁom a $3 million a year

to $7 million+ a year business and, to Sha’s knowledge, producing over a million dollars in proﬁt each

year, Sha was not paid proﬁt distributions. When Sha started to suspect the Chins were cooking the

10 books and siphoning off money to themselves and a separate company (Cross-Defendant Sweet Express

11 that was afﬁliated with the Chins), Without paying Sha distributions, he raised his concerns to the Chins.

12 Sha was then terminated by the Chins 0n false pretenses and shut off ﬁom SP1. Sha then retained

13 Miclean Gleason LLP in 20 1 7 to assist him in getting'ﬁnancial information ﬁom SP1. SP1 has been

Andrew Agtagma ﬁ'om 20 1 7 to the current time. In response to Sha’s demand,
14 represented by attorney

15 SPI allowed a very limited review of certain ﬁnancial documents but refused to produce corporate tax

16 returns, information regarding distributions to other owners of SP1, and general ledger documents

17 regarding expenditures and revenue of SP1. When SPI continued to refuse production of important SPI

18 ﬁnancial information t0 Sha, Sha’s counsel indicated that litigation was likely. In a preemptive and

l9 retributive strike, SPI ﬁled the instant litigation against Sha with specious claims 0f malfeasance on the

20 part of Sha While he was an employee of SPI. Sha then ﬁled a cross-complaint against SPI, Doreen

21 Chin, Ming Chin, and Sweet Express for breach of ﬁducialy duty, ﬁaud, an accounting, and conversion

22 for What amounted to their taking of his fma—ncial interest in SPI, refusal to produce ﬁnancial

23 information and to provide a full accounting, and wholesale failure to pay any proﬁt distributions to Sha.

24 Once Sha ﬁled and personally served the Cross-Defendants, SPI, the Chins, and Sweet Express,

25 MI. Agtagma went silent and refused to participate in the litigation his clients had initiated. None of the

26 Cross-Defendants responded tothe original cross complaint and a default was ultimately entered. None

27 of the Cross-Defendants responded to interrogatories, requests for production of documents, and

28 deposition notices served by Sha. None 0f the Cross—Defendants nor their counsel responded to

2
M'PA m0 SHA MOTION FOR LEAVE (CCP 2023.010. 2023.030‘ 2024.050} CASE NO. 18—CIV-03 1 10
discovery meet—and-confer letters ﬁom Sha‘s counsel. Because the original cross—complaint did not

include a monetary demand, an amended complaint With a demand for $1.5 million in damages was ﬁled

and personally served on all the Cross—Defendants. Again, none of the Cross—Defendants responded to

the amended cross—complaint, and defaults were entered by the court on June 5, 2019.

1n 35 years of legal practice, counsel for Sha has never seen a situation Where a plaintiff

(represented by counsel) and cross-defendants wholly ignored the lawsuit, refused to participate in

discovery, refused to participate in meet and confer efforts, refused t0 comply With deposition notices,

refused t0 respond to correspondence, and essentially went radio silent for over 9 months. It was not

until the night before the ﬁaandatory settlement conference on June 5, 2019, that SPI dumped an

10 untimely—ﬁled settlement conference statement on Sha’s counsel, and claimed tobe ready for uial on

11 June 17, 20 19 — a trialby ambush, since ithas not complied With any discovery request whatsoever and

12 had engaged in discovery abuse. It then became clear that SPI and Mr. Ag’cagma’s refusal to participate

13 -in any discovery or communication was tactical and not negligent. After counsel for Sha raised objection

14 to the attempted sandbagging, the parties entered into a stipulation to continue the trial date to January 6,

15 2020.

'16 compel discovery alternatively a request for
On February 15, 2019, Sha ﬁled a motion to or.

17' terminating sanctions. Unfortunately, the court denied the motion without prejudice because itwas

18 brought not only against SP1 as a plaintiff, but also against the Cross-Defendants Whose defaults had

19 been entered at that time. The court did not appreciate that the motion was also brought against SPI as a

20 plaintiff. On May 17, 2019, Sha’s counsel re—ﬁled the motion to compel discovery or alternatively for

21 terminating sanctions against SPI only, but itwas mistakenly set for hearing after the 30-day cutoff per

22 CCP 2024.020. The second motion t0 compel was denied by the court for untimeliness. Sha now brings

23 a motion under CCP 2023.010 and 2023.030 for terbinaﬁng sanctions 0n SPI’s complaint, or

24 alternatively under CCP 2024.050 to reopen discovery and to allow the court to substantively hear Sha’s

25 motion to compel discovery (also re—ﬁled With this motion). SPI should not be rewarded for its

26 gameplaying and subterfuge and Wholesale failure to participate in discovery, meet—and—confer efforts,

27 and Sha’s investigation of SPI’S frivolous claims against Sha. Sha, who is a man of limited means,

28 wrongfully terminated ﬁom his job and cut off ﬁom a company (and its proﬁts) that he owns, has been

3
MPA ISO Sm MOTION FOR LEAVE (CCP 2023.010. 2023.030. 2024.050) CASE NO. 18-CIV-031 10
the victim of SPI and the Chins’ self—dealing and discovery abuse, and has been forced to ﬁle multiple

motions for relief. Any discovery or discovery motion can be completed before the January 2020 trial

date and will not prejudice SP1, Which to this point has done nothing to paxticipate in this litigation.

Indeed, the only prejudice would be to Sha if this motion is not granted.

In compliance With CCP 2024.050(a), Sha’s counsél has requested in a meet-and—confer

communication to SPI’s counsel, Mr. Agtagma, that SPI voluntarily stipulate to the reopening of

discovery and the ﬁling/hean'ng 0f Sha’s motion to compel. SP1 has rejected the request for stipulation
>

to have the motion heard and/or to have discovery reopened. Sha now appeals to this ‘cQurt' for

terminating sanctions on SPI’s complaint against Sha, or in the altemativé, f0 substaﬁtively hear his

IO motion to compel discovery that SPI should have complied with a year ago (ﬁled with this motion), so

11 as to end thé continued discovery abuse practiced by SPI and its counsel. Denying Sha’s motion would

'12 not only prejudice Sha from getting the necessary information to defend against SPI’s claims, but would

13 reward SP1 and its counsel for their discovery abuse and gamesmanship.

14 II. BACKGROUND FACTS
15 A. SPI and the Chins Refuse to Provide Financial Data to Co-Owner Sha

16 Sha has worked in the bakery industry for over 20 years. [Declaration of Solomon Sha in

Support of Motion to Compel (February 13, 2019) (“Sha Decl.”), With Ming (a.k.a. “Terry”) Chin
17 113.]

18 and Doreen Chin in 2008, Sha began SP1, a commercial Wholesale bakery. [Id] Sha owned 30% of SP1

19 and served as SPI’s corporate secretary and managerial employee. [Id] However, during his time With

20 SP1, Sha did not realize the Chins were misappropriating SPI funds and proﬁts
— engorging only
21 themselves With SP1 proﬁt and other monetary distributions. [Sha Dec1., ﬂ 4.] When Sha suspected

22 ﬁnancial malfeasance and sought answers, the Chins denied him information and terminated his

23 employment With SPI. [Id]

24 David Miclean of Miclean Gleason LLP was retained by Sha in July 2017 to obtain ﬁnancial

25 information ﬁom SPI. [Declaration 0f David J. Miclean (“Miclean Decl.”) 1[4.] On August 10, 201 7,

26 Miclean wrote to SPI’s counsel, Andrew Agtagma, to request an accounting of SPI’s books and records

27 to determine the distribﬁ’cion amounts owed to Sha. [Id] Sha requested inspection of SPI’S ﬁnancial

28 documents pursuant to statutory authority to understand W113} he had not received distributions as an

4
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Case Info

Judge

Franchi, Don R. Track Judge’s New Case

Case No.

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Document Filed Date

July 05, 2019

Case Filing Date

June 18, 2018

County

Parties

AGTAGMA, ANDREW M. Attorney
AGTAGMA, ANDREW M. Attorney for the Plaintiff
CHIN, DOREEN Cross Defendant
CHIN, MING Cross Defendant
DOES 1 TO 10, INCLUSIVE Defendant
MICLEAN, DAVID J. Attorneys for Defendants
MICLEAN, DAVID J. Attorney for the Defendant
ROES 1 THROUGH 20, INCLUSIVE Cross Defendant
SHA, SOLOMON Cross Complainant
SHA, SOLOMON Defendant
SWEET EXPRESS Cross Defendant
SWEET PRODUCTION, INC., A CALIFORNIA CORPORATION Cross Defendant
SWEET PRODUCTION, INC., A CALIFORNIA CORPORATION Plaintiff
Danielle Mihalkanin Attorneys for Defendants
Carmen Aviles Attorneys for Defendants

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Motion-Secondary: SWEET PRODUCTION, INC., A CALIFORNIA CORPORATION vs. SOLOMON SHA, et al

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