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

On June 18, 2018 a Order 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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DAVIDJ. MICLEAN (SBN 115098)
dmiclean@micleangleason.com
DANIELLE M. MIHALKANIN (SBN 271442)
dmihalkanin@micleangleason.com
MICLEAN GLEASON LLP
411 Borel Avenue, Suite 310 DENIED
San Mateo, CA 94402
Telephone: (650) 684-1181
Facsimile: (650) 684-1182
FILED
SAN MATEO COUNTY
(a NOV 24 2019
Attorneys for Defendant and Cross-Complainant
Solomon Sha ind Superior Gourt
ciel
SUPERIOR COURT OF THE STATE OF CALIFOR
10 COUNTY OF SAN MATEO
11

12 SWEET PRODUCTION, INC., a California Case No. 18-CIV-03110
Corporation.
13
Plaintiff, DEFENDANT SOLOMON SHA’S EX PARTE
14 NOTICE OF MOTION AND MOTION FOR
TERMINATING SANCTIONS AND
Vv.
15 MONETARY SANCTIONS AGAINST
PLAINTIFF SWEET PRODUCTION, INC.
16 SOLOMON SHA, an individual; and DOES 1 to
10, inclusive.
17
Defendants. Date November 14, 2019
18 Time: 9:00 a.m.
Department: Law & Motion
19
_ - - —
20 SOLOMON SHA,
! 8 cry 03110
1
21 Cross-Complainant. f vateApplication

‘VAN nN
2127659
22 Vv.

23
SWEET PRODUCTION, INC., a California
24 corporation; SWEET EXPRESS; MING CHIN.
DOREEN CHIN; and ROES 1 through 10.
25 inclusive,

26 Cross-Defendants.
27

SHA SANCTIONS MOTION CASE No. 18-CIV-03110
EX PARTE MOTION

TO ALL PARTIES AND THEIR COUNSEL OF RECORD:

Please take notice that on November 14, 2019, at 2:00 p.m., or as soon as the matter may be

heard in the Law & Motion Department of this Court, located at 400 County Center, Redwood City,

California 94063, Defendant SOLOMON SHA (“Sha”) will and hereby does move this Court ex parte

pursuant to California Code of Civil Procedure sections 2023.010 and 2023.030, for terminating

sanctions and monetary sanctions against Plaintiff Sweet Production, Inc. CSPI” or “Plaintiff’) for

misuse of the discovery process. In the event that the court is disinclined to grant this motion on an ex
parte basis, Sha moves this Court pursuant to California Rule of Court 3.1300(b) for an order

10 shortening time so that the matter may be heard by this Court on December 17, 2019 at 9:00 a.m. in the

11 Presiding Judge Law & Motion Department, when Sha is presently scheduled before this court on his
12 Motion for Default Judgment on the Cross-Complaint.

13 Good cause exists for the Court to exercise its discretion and grant this relief on an ex parte

14 basis to ensure that Sha can obtain relief from SPI’s claims prior to the January 6, 2020 trial so that Sha

15 does not have to prepare for trial when Plaintiff has neither served nor responded to any discovery

16 requests, ever. There is exigency to have this matter heard today because hearings before this Court are
17 presently being scheduled early-January 2020, with the earliest available hearing now on January 2,

18 2020. This is not enough time to have the matter heard in compliance with the “15-days before trial”
19 tule under CCP 2024.020(a), as trial is presently scheduled for January 6, 2020, or to prevent Sha from
20 the costly exercise of preparing for trial. This Motion is made on the grounds that good cause exists for
21 terminating SPI’s claims in its complaint against Sha and imposing monetary sanctions against SPI, or

22 alternatively shortening time to have this matter heard on an already scheduled hearing date in this case.

23 SPI initiated litigation against Sha on June 18, 2018. Despite diligent efforts from Sha to
24 procure initial discovery responses from SPI, SPI deliberately and tactically chose not to respond to any

25 discovery and go radio silent to all forms of meet and confer and other communication. Instead, SPI

26 made a tactical decision to suddenly show up at the Mandatory Settlement Conference on June 5, 2019

27 and claim readiness for trial — trial by ambush. The parties thereafter stipulated to move the trial date
28 from June 17, 2019 to January 6, 2020, and SPI stipulated to produce documents. Despite the

SHA SANCTIONS MOTION CASE NO. 18-CIV-03110
stipulation setting the trial for next year, SPI opposed Sha’s motion to compel discovery, claiming

untimeliness because Sha did not have the hearing set before the “15 day before trial” discovery

hearing cutoff date under the original trial date. After discovery was reopened by court order on

September 13, 2019, SPI again went radio silent and refused to serve discovery responses. Now SPI is

in violation of the Court’s November 1, 2019 order compelling SPI to serve discovery responses. Sha

fears that if relief is not granted, Sha again will face a trial by ambush from SPI.

Judicial economy and fairness will be served by terminating SPI’s claims against Sha and

imposing monetary sanctions against SPI for discovery misuse. SPI will not be unduly prejudiced

because SPI has never been an active participant in litigation that it filed; SPI has never served any

10 discovery nor responded to any discovery from Sha. Pursuant to Code of Civil Procedure sections

ll 2023.010 and 2023.030, on notice to the Parties and an opportunity for hearing, the court may impose

12 terminating sanctions and monetary sanctions against anyone engaging in conduct that is a misuse of

13 the discovery process. Pursuant to California Rules of Court 3.1203, 3.1204, and 3.670(h)(3)(b) and

14 Local Civil Rule 3.19, the court may grant Sha’s requests ex parte or alternatively under California

1S Rule of Court 3.1300(b) on shortened time. Should the Court deny this Motion in.its entirety, Sha will

16 suffer severe prejudice and hardship.

17 This motion is based upon this notice of motion, the attached memorandum of points and

18 authorities, the previously filed declarations of David J. Miclean and Solomon Sha, the declaration of
19 Danielle Mihalkanin, the pleadings and records on file herein, and other such evidence and argument as

20 may be presented at or before the hearing on this Motion.

21 Notice of this Ex Parte Motion was provided to counsel of record for all parties in this action in

22 accordance with California Rules of Court 3.1203, 3.1204, and 3.670(h)(3)(b) and Local Civil Rule

23 3.19 in an e-mail sent at or around 9:00 a.m. on November 13, 2019, in which counsel were notified

24 that Defendant Sha would appear on November 14, 2019 to present this Application, and were asked

25 whether they would appear to oppose the application. As of the time of this filing, counsel for SPI has

26 not responded to this notice. See Declaration of Danielle M. Mihalkanin in Support of Sha’s Ex Parte

27 Motion for Terminating Sanctions (“Mihalkanin Declaration”) at {§[ 5.)

SHA SANCTIONS MOTION CASE NO. 18-CIV-03110
Dated: November 14, 2019 Respectfully Submitted:

MICLEAN GLEASON LLP

David J. Miclean
Danielle M. Mihalkanin
Attorneys for Defendant and Cross-Complainant
SOLOMON SHA

11
12

18
19

SHA SANCTIONS MOTION CASE NO. 18-CIV-03110
MEMORANDUM OF POINTS AND AUTHORITIES

I. INTRODUCTION

This is Solomon Sha’s (“Sha”) fifth motion against Sweet Production, Inc. (“SPI”) related to

SPI’s continued misuse of the discovery process and complete failure to comply with its discovery

obligations for more than a year and present violation of this Court’s November 1, 2019 order

compelling discovery. SPI continues to refuse to respond to any discovery at all, including the first set

of complete discovery (Requests for Production, Form Interrogatories, and Special Interrogatories) that

was properly served on July 27, 2018 and Sha’s Requests for Production of Documents (Set Two) that

was properly served on September 11, 2019. Sha has been forced to bring motion after motion because

10 SPI has refuses to respond to any discovery despite emerging in June 2019 to declare SPI trial-ready for

11 a previously scheduled trial two weeks later. The parties stipulated and the court moved the trial to

12 January 6, 2020 to prevent a trial by ambush against Sha. Yet, SPI has again gone radio silent and

13 again seeks to avoid all discovery obligations until trial, which has been its strategy all along.

14 In this motion, Sha seeks a Court Order under CCP 2023.010 and 2023.030 imposing

15 terminating sanctions to dismiss the action by SPI against Sha and monetary sanctions against SPI for

16 its complete misuse of the discovery process and court system, or in the alternative, for an order
17 shortening time to have this motion heard on December 17, 2019 at 9:00 a.m. before the Presiding

18 Judge Law and Motion, when Sha is already scheduled to be before this Court on the Default Judgment
19 for the cross-complaint. SPI should not be rewarded for its gameplaying and subterfuge and wholesale

20 failure to participate in discovery, meet-and-confer efforts, and Sha’s investigation of SPI’s frivolous

21 claims against Sha. Sha, who is a man of limited means, wrongfully terminated from his job and cut

22 off from a company (and its profits) that he owns, has been the victim of SPI and the Chins’ self-

23 dealing and discovery abuse, and has been forced to file multiple motions for relief. The only prejudice

24 would be to Sha if this motion is not granted in some form. Sha respectfully requests the Court grant

25 Sha’s Motion.

26 II. BACKGROUND

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

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

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SHA SANCTIONS MOTION CASE NO. 18-CIV-03110
Support of Motion to Compel (February 13, 2019) (“Sha Decl.”), 3.] With Ming (a.k.a. “Terry”) Chin

and Doreen Chin in 2008, Sha began SPI, a commercial wholesale bakery. (Jd.) Sha owned 30% of

SPI and served as SPI’s corporate secretary and managerial employee. (Jd.) However, during his time

with SPI, Sha did not realize the Chins were misappropriating SPI funds and profits — engorging only

themselves with SPI profit and other monetary distributions. (Sha Decl., { 4.) When Sha suspected

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

employment with SPI. (/d.)

David Miclean of Miclean Gleason LLP was retained by Sha in July 2017 to obtain financial
information from SPI. [Declaration of David J. Miclean in Support of Solomon Sha’s Motion for

10 Leave (July 5, 2019) (“Miclean Decl.”) J 4.] On August 10, 2017, Miclean wrote to SPI’s counsel,

ll Andrew Agtagma, to request an accounting of SPI’s books and records to determine the distribution

12 amounts owed to Sha. (/d.) Sha requested inspection of SPI’s financial documents pursuant to

13 statutory authority to understand why he had not received distributions as an officer and shareholder for

14 the time SPI had been in business, and because of his concern that substantial monies were taken out of

15 the business by the Chins. (Miclean Decl., Ex. 2.)

16 On August 25, 2017, SPI’s counsel responded to Miclean’s August 10, 2017 letter and offered

17 to make a limited number of financial documents available but refused to produce tax returns and any

18 financial reports or income statements prior to the 2017 fiscal year. (Miclean Decl. 4 5, Ex. 3.) On

19 September 12, 2017, Sha’s counsel emailed SPI’s counsel (Mr. Agtagma) and challenged SPI’s refusal

20 to produce accounting reports and tax records. (Id., Ex. 4.)

21 On November 15, 2017, Sha’s counsel again reached out to opposing counsel, Andrew

22 Agtagma, regarding SPI’s continued refusal to produce tax records for the previous 7 years to Sha.

23 (Miclean Decl. { 6, Ex. 5.)

24 On December 1, 2017, counsel for SPI allowed a limited inspection of documents on

25 December19, 2017, but continued to refuse Sha access to SPI corporate tax records despite the fact Sha

26 was an owner and officer of SPI. (Miclean Decl. § 7, Ex. 6.) The inspection went forward in

27 December 2017, but SPI continued its refusal to produce documents that would show revenue

28 expenditures, SPI tax returns, and K-1s for the Chins. (/d.) In early 2018, Sha’s counsel continued to

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SHA SANCTIONS MOTION CASE No. 18-CIV-03110
press SPI’s counsel Andrew Agtagma for additional financial information from SPI. (Miclean Decl. 4

8.) Since that time, SPI had been wholly noncompliant with Sha’s request to produce records and

financial data regarding the company. (Id.) In May 2018, Sha’s counsel advised SPI’s counsel that if

SPI did not provide the financial information requested, litigation would likely ensue. But, rather than.

meeting Sha’s requests for documentation, and in retaliation to avoid compliance, and as a preemptive

strike, SPI filed a Complaint against Sha on June 18, 2018 containing a litany of frivolous claims

against Sha. (/d.)

B. SPI and the Chins Refuse to Participate in Discovery

On July 19, 2018, Sha’s counsel filed ananswer to the SPI Complaint, as well as a Cross-

10 Complaint against SPI, Ming and Doreen Chin, and Sweet Express. (Miclean Decl. { 9, Ex. 7.) The

ll Cross-Complaint included causes of action for breach of fiduciary duty, accounting, fraud, conversion

12 and unjust enrichment against SPI, Doreen and Ming Chin as owners of SPI, and against Sweet

13 Express, the company affiliated with SPI and the Chins thatdiverted revenue away from SPI. (/d.) On

14 July 24, 2018, Sha’s counsel’s office emailed SPI counsel, Mr. Agtagma, asking if he would accept

15 service of the Cross-Complaint for Sweet Express and the Chins, in addition to his client SPI. (Miclean

16 Decl., Ex. 8.) When Mr. Agtagma failed to respond to Sha’s counsel’s email, Sha personally served

17 SPI, Sweet Express, Doreen Chin, and Ming Chin with the Cross-Complaint. (/d.) On July 27, 2018,

18 Sha personally served SPI with the First Set of Requests for Production of Documents, Special

19 Interrogatories, Form Interrogatories, and an Inspection Demand (Miclean Decl., Ex. 9) to gather

20 information for the purpose of defending Sha against SPI’s allegations in the complaint, prepare Sha’s

21 defenses, obtain discovery on issues in the case, and to assess potential damages. (Miclean Decl. { 10.)

22 SPI did not respond to any of these discovery requests. (/d.) On August 9, 2019, Sha personally served

23 Cross-Defendants Doreen Chin and Ming Chin with form interrogatories, special interrogatories, and

24 requests for production of documents. (Miclean Decl., Ex. 22.) The Chins did not respond to any of
25 these discovery requests. (Jd.) On August 23, 2018, Sha personally served deposition notices on

26 Cross-Defendants Ming Chin and Doreen Chin. However, these depositions were taken off calendar

27 due to Cross-Defendants’ refusal to comply with discovery and produce documents, and because

28 default was entered against the Chins (and the other Cross-Defendants) on the Cross-Complaint and,

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SHA SANCTIONS MOTION CASE No. 18-CIV-03110
later, the First Amended Cross-Complaint. (Miclean Decl. { 11.)

None of the Cross-Defendants responded to Sha’s Cross-Complaint. On September 4, 2018,

prior to entry of default, Sha’s counsel’s office sent a courtesy notice to Mr. Agtagma advising him that -

SPI and the other Cross-Defendants were in default, and if they did not respond to the Cross-

Complaint, Sha would file a default. (Miclean Decl. § 12, Ex. 10.) Mr. Agtagma and Cross-

Defendants ignored Sha’s counsel courtesy notice and did not respond. A default was filed and entered

against Cross-Defendants Sweet Express, Doreen Chin, and Ming Chin on September 14, 2018, and as

to SPI on October 9, 2018. (Miclean Decl. § 12, Exs. 11-12.)
Cc Sha Files a Motion to Compel

10 On February 8, 2019, in response toCross-Defendants’ continued failure to provide any

11 responses to Sha’s discovery requests, Sha filed a Motion to Compel discovery compliance and served

12 it on the Cross-Defendants. (Miclean Decl., Ex. 16.) The Cross-Defendants failed to file or even serve

13 an opposition to the Motion to Compel. (Miclean Decl. § 16.) On April 2, 2019, Sha’s February 8,

14 2019 Motion to Compel was denied (without prejudice) by Judge Greenberg due to Cross-Defendants
15 Sweet Express, Ming Chin, and Doreen Chin’s defaults having already been entered as to the Cross-

16 Complaint, and because the proof of service prepared by the filing service apparently failed to identify
17 Mr. Agtagma as SPI’s counsel — even though that information would certainly be known to the court

18 since he filed the original SPI complaint. (Miclean Decl. 4 17, Ex. 17.)

19 On April 4, 2019, Sha filed a First Amended Cross-Complaint to explicitly make a demand for
ij
20 $1.5 million in damages by reason of Cross-Defendants’ failure to pay ownership distributions and
21 conversion of Mr. Sha’s ownership interest in SPI. (Miclean Decl. § 18.) The First Amended Cross-

22 Complaint (“FAC”) (like the original Cross-Complaint) included causes of action for breach of

23 fiduciary duty, accounting, fraud, conversion, and unjust enrichment against SPI, Doreen and Ming

24 Chin as owners of SPI, and against Sweet Express, the company affiliated with SPI and the Chins that

25 diverted revenue away from SPI. The amended cross-complaint was personally served on all Cross-

26 Defendants on April 9, 2019 and provided to Mr. Agtagma’s office on April 16, 2019. Cross-

27 Defendants’ responsive pleadings to the FAC were due on May 16, 2019. No response was filed by

28 any Cross-Defendant.

SHA SANCTIONS MOTION CASE No. 18-CIV-03110
On April 16, 2019, SPI’s counsel, Andrew Agtagma, filed a Notice of Change of Address for

this matter with the Court. (Miclean Decl. § 19.) This is the only contact Mr. Agtagma made with

Sha’s counsel from October 15, 2018, until June 4, 2019, a day before the parties’ Mandatory

Settlement Conference, a period of over 7 months. (Id.)

D Sha’s Second Motion to Compel

On May 17, 2019, Sha re-filed his Motion to Compel Discovery Responses from Plaintiff SPI,

Deeming Objections Waived, Monetary Sanctions, and Terminating Sanctions, which was originally

scheduled for hearing on June 12, 2019, but then continued by the court for hearing on July 2, 2019

(weeks after the trial date). (Miclean Decl. 4 20.) Unfortunately, the motion was denied on July 2,

10 2019 as untimely since it was inadvertently set for hearing beyond the 15-day before trial discovery

11 motion cutoff in CCP 2024.020, and was not accompanied by the instant motion seeking leave under

12 CCP 2024.050 to have a discovery motion heard closer to the trial date. (Miclean Decl. 24.)

13 E. Sha Requests Entry of Default

14 On May 21, 2019, given Cross-Defendants’ total lack of response of any kind to Sha’s First

15 Amended Cross-Complaint, Sha filed a Request for Entry of Default on SPI, Sweet Express, Ming

16 Chin, and Doreen Chin as to the First Amended Cross-Complaint. The Default was entered as to Sweet

17 Production, Inc., Sweet Express, Ming Chin, and Doreen Chin on June 5, 2019. (Miclean Decl. J 21.)

18 Again, the default on the First Amended Cross-Complaint was personally served on all Cross-
19 Defendants and a copy provided to Mr. Agtagma at his new address.

20 F, SPI and the Chins’ Attempted Trial Sandbag

21 On June 5, 2019, there was acourt-schedulled mandatory settlement conference followed by a

22 trial date scheduled for June 17, 2019. Having heard nothing substantively on any matter from SPI,

23 Mr. Agtagma, or any Cross-Defendant for over 9 months, Sha’s counsel contacted the court to move

24 the dates. The court declined, and Sha’s counsel prepared a timely MSC statement, which was served

25 on Mr. Agtagma on May 29, 2019. (Miclean Decl. 4] 22.) Sha did not receive any MSC statement from

26 Mr. Agtagma on the due date. (/d.) But, on June 4, 2019, the night before the MSC, shortly before

27 Sha’s counsel’s office closed, someone dropped off what purported to be an MSC statement from Mr.

28 Agtagma for SPI. (/d.) It was obvious that SPI and the other Cross-Defendants made a deliberate

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SHA SANCTIONS MOTION CASE NO. 18-CIV-03110
decision to avoid any response to discovery or the Cross-Complaint, and planned to lie in wait and

attempt trial by ambush after SPI and Cross-Defendants’ total non-compliance with discovery and radio

silence for 9 months., It was also apparent that SPI and the Chins’ strategy was to try and wait Sha out

knowing he was an individual without substantial means and that it would be difficult for Sha to

prosecute the Cross-Complaint or fund the litigation. (/d.) On June 5, 2019, after Sha’s counsel made

objections to SPI and Mr. Agtagma’s abuse of discovery and attempt at trial by ambush, the Parties

stipulated to move the trial date to January 6, 2020 and SPI agreed to produce documents. (Mihalkanin

Decl., Ex. B.)

In over 35 years of legal practice, Sha’s counsel has never had a Plaintiff and Cross-Defendants

10 go radio silent and not communicate, not respond to cross-complaints, not respond to discovery, not

11 respond to meet and confer efforts on discovery, not respond to discovery motions, not respond to

12 courtesy notices of impending default, not respond to entries of default, not respond to communications
13 and emails, etc. — and despite personal service of all those pleadings, motions, and documents, and
14 service to SPI’s counsel of record — for almost 2 years. (Miclean Decl. 27.) SPI has engaged in
15 wholesale discovery abuse.

16 G The Court Re-Opened Discovery

17 On July 5, 2019, Sha sought relief from the court after SPI’s counsel refused to stipulate to

18 reopening discovery. Sha requested terminating sanctions or to reopen discovery. At court on August

19 28, 2019, the Court ordered discovery to be reopened pursuant to CCP 2024.050(a), but denied Sha’s

20 requests for sanctions. Sha then requested SPI comply with previously served discovery as well as

21 additional document requests served on September 11, 2019. (See Mihalkanin Decl., Ex. B.) SPI’s

22 counsel advised that SPI would respond and produce documents by October 11, 2019. (See Ex. B to

23 Mihalkanin Decl.) But, SPI again reneged on its discovery obligations and promises as nothing was
24 produced and no discovery responses were served by SPI.

25 H SPI Continues Its Refusal to Respond to Discovery Even After Order Compelling

26 Responses

27 SPI filed this case against Sha as a preemptive attack to avoid Sha’s requests for financial

28 information, and then refused to make any written response to discovery, produce any documents, or

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SHA SANCTIONS MOTION CASE No. 18-CIV-03110
respond to any interrogatories. SPI has consciously and willfully chosen to never respond to any of

Sha’s discovery requests dating back to July 27, 2018, and Sha would be severely prejudiced if SPI is

allowed to go to trial on its claims while engaging in discovery abuse to avoid Sha’s discovery of the

basis for SPI’s claims. In response to the November 1, 2019 court order compelling discovery

responses by November 10, 2019, SPI has still produced nothing. SPI is in violation of this Court’s

November 1, 2019 order. Trial in this case is currently scheduled to commence January 6, 2020. The

last day for Sha to bring motions per CCP § 2024.020(a) is December 23, 2019, but this Court is

currently scheduling hearings out to January 2, 2029. Imposing terminating sanctions on an ex parte

basis is the only way that Sha can avoid another trial by ambush situation and avoid the costly exercise

10 of having to prepare for trial. Imposing monetary sanctions is the only way that Sha can be reimbursed

il for having to bring motion after motion to try to get SPI to comply with its discovery obligations.

12
13 Il. STATEMENT OF LAW

14 A court may impose “sanctions against anyone engaging in conduct thatisa misuse of the

15 discovery process,” including monetary sanctions and terminating sanctions. (CCP § 2023.030; see also

16 Tucker v. Pac. Bell Mobile Servs., 186 Cal. App. 4th 1548, 1563, 115 Cal. Rptr. 3d 9, 19 (2010).)
17 Misuses of the discovery process include “[fJailing to respond or to submit to an authorized method of

18 discovery” and “[f]ailing to confer in person, by telephone, or by letter with an opposing party or

19 attorney in a reasonable and good faith attempt to resolve informally any dispute concerning discovery.”

20 Code Civ. Proc. § 2023.010(d), (i). Where it is clear that a party has no intention of answering

21 discovery, filing proper and timely papers, or complying with court orders, terminating sanctions are

22 proper. See Del Junco v. Hufnagel, 150 Cal. App. 4th 789, 799, 60 Cal. Rptr. 3d 22, 29 (2007).

24 M/

25 Mt

26 MI

27 MI

SHA SANCTIONS MOTION CASE NO. 18-CIV-03110
c
Iv. ARGUMENT

A SPI’s Tactical Refusal to Properly and Adequately Respond to the Discovery Is

Without Substantial Justification Thereby Warranting an Imposition of

Terminating Sanctions.

Code of Civil Procedure section 2023.030 authorizes the Court to impose monetary and

terminating sanctions against any party or attorney, or both, who has engaged in misuse of the discovery

process. Misuses of the discovery process include, among other things, failing to respond or to submit

to an authorized method of discovery, making, without substantial justification, an unmeritorious

objection to discovery, and failing to confer in person, by telephone, or by letter with an opposing party

10 or attorney ina reasonable and good faith attempt to resolve informally any dispute concerning

11 discovery. Code Civ. Proc. § 2023.010.

12 SPI’s deliberate and tactidal refusal to respond to discovery and meet and confer on discovery

13 issues justifies a terminating sanction of its claims against Sha. SPI has refused to respond to the

14 Requests for Production ofDocuments, Special interrogatories, and Inspection Demand that Sha has’

15 requested on multiple occasions and is now in violation of the November 1, 2019 court order compelling

16 discovery. (Nov. 1, 2019 Order Compelling Discovery Responses; and seeMiclean Decl., | 21.)

17 Moreover, SPI has necessitated repeated Court intervention, which is contrary to the Discovery Act’s

18 purpose. Sinaiko Healthcare Consulting, Inc. v. Pac. Healthcare Consultants (2007) 148 Cal.App.4th

19 390, 402 (“Civil discovery is intended to operate with minimum judicial intervention. It is a central

20 precept of the Civil Discovery Act that Discovery be essentially self-executing.”) (internal citations

21 omitted). There is no reasonable justification for SPI’s bad faith in withholding discovery responses to

22 discovery and its refusal to meet and confer regarding the same. Accordingly, SPI must be sanctioned

23 for its willful misconduct.

24 \ 1 Trial Cannot Proceed Without Discovery.

25 The necessity and reasons for Sha obtaining discovery from SPI in advance of trial are clear-cut,

26 and SPI should not be allowed to proceed to trial against Sha without ever having produced anything in

27 discovery. The purpose of discovery is “to enhance the truth-seeking function of the litigation process

28 and eliminate trial strategies that focus on gamesmanship and surprise.” Williams v. Volkswagenwerk

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SHA SANCTIONS MOTION CASE NO. 18-CIV-03110
Aktiengelsellschaft (1986) 180 Cal.App.3d 1244, 1254. “An important aspect of legitimate discovery

from a defendant’s point of view is the ascertainment, in advance of trial, of the specific components of

plaintiff's case so that appropriate preparation can be made to meet them.” Juarez v. Boy Scouts of

America, Inc. (2000) 81 Cal.App.4th 377, 389. Discovery is necessary to evaluate SPI’s claims and

prepare this matter for trial or settlement. Thus far, there is complete absence of any discovery response

by SPI, which is clear discovery misuse under CCP 2023.010 (d) and (i) (failing to respond or submit to

discovery and failing to meet and confer).

Sha has been the only party propounding discovery in this case. Sha sought discovery on both

SPI’s claims against him and his claims against SPI and the other Cross-Defendants, through Requests

10 for Production of Documents, Special Interrogatories, Form Interrogatories, an Inspection Demand,

11 deposition notices on SPI principals, meet and confer correspondences, and two unsuccessful Motions to
12 Compel. SPI did not respond to any of Sha’s discovery. Sha’s discovery requests were relevant to
13 investigate SPI’s allegations, prepare Sha’s defenses, and assess potential damage claims. Granting a

14 motion for terminating sanctions and monetary sanctions will allow Sha to avoid the specious SPI

15 claims against him for employee malfeasance and losing SPI customers (by terminating sanctions) or

16 finally get the information he requires to defend himself.
17 2 Sha Has Been Diligent in His Efforts to Complete Discovery and SPI is
18 Currently in Violation of this Court’s Order.

19 Sha has been diligent in his efforts to complete discovery. SPI filed its Complaint and initiated

20 litigation against Sha on June 18, 2018. On July 27, 2018, Sha propounded Requests for Production of

21 Documents, Special Interrogatories, Form Interrogatories, and an Inspection Demand on SPI through

22 SPI’s counsel at Mr. Agtagma’s mailing and email addresses. These were met with no response.

23 Further, on September 12, 2018, Sha also served deposition notice requests to SPI Principals, the Chins.
24 Again, SPI failed to respond. On October 15, 2018, SPI’s counsel finally responded with the notion of a

25 settlement, without any mention of discovery responses. Sha sought resolution to the entire matter and
26 was amicable for mediation. Sha agreed to mediation with the understanding that SPI would respond to
27 the discovery. Accordingly, Sha’s counsel set mediation for February 28, 2019.
28

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SHA SANCTIONS MOTION CASE NO. 18-CIV-03110
Sha’s counsel attempted numerous times to contact SPI’s counsel through telephone (SPI’s

counsel’s stated preferred method) to obtain discovery to make mediation discussions meaningful; SPI

yet again did not respond. This prompted Sha’s counsel to send a letter correspondence on November

29, 2018 to provide full and complete discovery responses by December 14, 2018. Despite this informal

measure taken by Sha, SPI once again fell silent.

Despite the parties initially agreeing to mediation, SPI went radio silent on all matters with no

response to any letter, email, discovery, mediator inquiry, or other communication. All the while, Sha

patiently waited for SPI’s response. Unable to obtain discovery to make mediation meaningful, Sha was

ultimately forced to cancel mediation. On February 15, 2019, Sha was forced to bring a Motion to

10 Compel Discovery Responses against SPI and the Chins. Consistent with their nonresponse, SPI never

11 filed any opposition to Sha’s motion. On May 17, 2019, Sha brought a renewed Motion to Compel

12 Discovery Responses. Although Sha was entitled to the discovery, unfortunately, both motions were

13 denied for non-substantive reasons, including that Sha’s counsel inadvertently filed the second motion

14 for hearing after the discovery motion cutoff date.

15 At court on June 5, 2019 when SPI attempted to sandbag Sha at trial, SPI stipulated and agreed

16 to produce documents within 45 days. No documents were ever produced. At court on August 28,

17 2019, the court ordered discovery to be reopened. On September 11, 2019, Sha then requested SPI

18 comply with previqusly served discovery as well as additional document requests by October 11, 2019.

19 Despite SPI’s counsel repeatedly confirming that it would respond to the discovery by October 11,

20 2019, SPI again reneged on its discovery obligations and promises as nothing was produced and no

21 discovery responses were ever served by SPI.

22 On November 1, 2019 Sha filed an ex parte application for a motion to compel discovery

23 responses after confirming that SPI would not oppose Sha’s motion. The court granted Sha’s motion

24 and SPI was ordered to serve discovery responses by November 10, 2019. To date, SPI has never
25 provided any responses and is presently in violation of the court’s November 1, 2019 order.

26 Sha’s counsel has repeatedly made a reasonable and good faithattempt-to meet and confer with

27 SPI’s Counsel and has sought court intervention as needed. But SPI’s counsel has never responded to

28 any discovery. Sha’s counsel has been diligent in seeking discovery from SPI. The court should not

12
SHA SANCTIONS MOTION CASE NO. 18-CIV-03110
allow this case to be tried
on the merits where SPI has engaged in discovery misuse to sandbag at trial

and prevent Sha from obtaining discovery from SPI on SPI’s claims.

B. SPI Must Be Sanctioned for Its Discovery Misconduct

SPI has refused to respond to any discovery, including the first set of requests for production of

documents, special interrogatories, form interrogatories, and inspection demand and second set of

requests for production that Sha has requested on multiple occasions (Mihalkanin Decl., Ex. B). For its

failure to respond and failure to provide responses, despite repeated requests, SPI should be sanctioned

for its discovery misconduct with both monetary and terminating sanctions.

Section 2023.030 authorizes a trial court to impose a monetary sanction and terminating

10 sanctions against any party or attorney, or both, who has engaged in misuse of the discovery’ process.

i (CCP § 2023.030). Misuses of the discovery process include, among other things, failing to respond or
12 to-submit to an authorized method of discovery; making, without substantial justification, an

13 unmeritorious objection to discovery; making an evasive response to discovery; and disobeying a court

14 order to provide discovery. (CCP § 2023.010.) “Ifa party fails to serve a timely response, and the

15 propounding party moves for and obtains a court order compelling a response, the trial court must

16 impose a monetary sanction against the delinquent party unless that party acted with ‘substantial

17 justification’ or the sanction would otherwise be unjust.” (Sinaiko Healthcare Consulting, Inc. v. Pac.

18 Healthcare Consultants (2007) 148 Cal. App. 4th 390, 404 (citing CCP §§ 2030.290(c), §2031.300(c).)

19 A courtis not required to allow a party to continue to employ stalling tactics indefinitely. Liberty Mut.

20 Fire Ins. Co. v. LcL Adm'rs, Inc., 163 Cal.App. 4th 1093, 1106, 78 Cal. Rptr. 3d 200, 209 (2008).

21 Further, terminating sanctions are proper where a party tendered discovery responses that lacked

22 meaningful information, repeatedly ignored meet and confer letters, and propounded no discovery of its

23 own until faced with a motion for terminating sanctions. Jd.

24 ~ As discussed above, SPI has been non-responsive, evasive, and has altogether refused to engage

25 in the discovery process, which has completely impaired Sha’s ability to defend himself against SPI’s

26)
27

13
SHA SANCTIONS MOTION 1 Case No. 18-CFV-03110
unfounded claims.! Further, SPI has necessitated repeated Court intervention, which is and a waste of

this Court’s time and judicial resources. (See Sinaiko Healthcare Consulting, Inc. v. Pac. Healthcare

Consultants (2007) 148 Cal. App. 4th 390, 402 (“Civil discovery is intended to operate with a minimum

of judicial intervention. It is a ‘central precept’ of the Civil Discovery Act that discovery be essentially

self-executing”) (internal citations omitted)). The Court should not allow such discovery abuse and

SPI’s wholesale refusal to respond to discovery or engage in the discovery process. SPI has no

justification for its refusal to comply. Thus, Sha respectfully requests that SPI be sanctioned for not

only the costs associated with bringing this motion and the prior motion to compel (See Mihalkanin

Decl., Ex. B and §7), but also by terminating SPI’s claims against Sha.

10 Vv. CONCLUSION

11 Sha respectfully requests the Court grant his motion to impose terminating and monetary
12 sanctions against SPI or to shorten time to have this matter heard on December 17, 2019, when Sha is

13 before this court for the Default Judgment on the cross-complaint.

15 Dated: November 14, 2019 Respectfully Submitted:

16 MICLEAN GLEASON LLP
17

18
David J. Miclean
19 Danielle M. Mihalkanin
20 Attorneys for Defendant and Cross-Complainant
SOLOMON SHA
21

24
! SPI filed the Complaint against Sha because Sha sought full and complete review of SPI’s books and
25 records and SPI refused to produce a full accounting of such. Now that Sha seeks information to defend
himself against SPI’s unfounded claims, SPI continues to refuse to provide any information or discovery
26 responses to Sha. This repetitive conduct is the type that courts particularly find abusive. (See Liberty
27 Mut. Fire Ins. Co. v. LeL Adm’rs, Inc. (2008) 163 Cal. App. 4th 1093, 1104 (terminating sanctions were
proper where “Defendants chose to ignore the many attempts, both formal and informal, made by
28 plaintiff to secure fair responses from them”).)

14
SHA SANCTIONS MOTION CASE No, 18-CIV-03110

Case Info

Judge

Franchi, Don R. Track Judge’s New Case

Case No.

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Document Filed Date

November 14, 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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Order: SWEET PRODUCTION, INC., A CALIFORNIA CORPORATION vs. SOLOMON SHA, et al

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