1040 N. Western v. Pourtavosi CA2/3 ( 2020 )

Filed 11/24/20 1040 N. Western v. Pourtavosi CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
1040 N. WESTERN, LLC, B297715
Plaintiff and Appellant, Los Angeles County
Super. Ct. No. SC127440
v.
COBBY JACOB POURTAVOSI et
al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Mark A. Young. Affirmed.
John L. Dodd & Associates and John L. Dodd for Plaintiff
and Appellant.
Vivoli Saccuzzo and Jason P. Saccuzzo for Defendants and
Respondents.
_____________________________________
INTRODUCTION
Plaintiff 1040 N. Western, LLC (plaintiff) appeals following
the trial court’s dismissal of its lawsuit against defendants Cobby
Jacob Pourtavosi and Andre Khalili (collectively defendants) as a
sanction for willful violation of a discovery order. Plaintiff
contends the court abused its discretion by imposing a
terminating sanction when plaintiff had not repeatedly violated
discovery orders, and by failing to consider less drastic sanctions.
Plaintiff also contends defendants’ motion for terminating
sanctions was not timely filed. We disagree with plaintiff’s
contentions and affirm the judgment of dismissal.
FACTS AND PROCEDURAL BACKGROUND
1. The Underlying Action
In 2013, defendants rented commercial property located on
Melrose Avenue in Los Angeles from plaintiff to operate a
medical marijuana business. In early 2016, the City of Los
Angeles notified plaintiff that medical marijuana businesses were
prohibited under local law. As a result, defendants were forced to
shut down their business.
In February 2016, plaintiff brought an unlawful detainer
action against defendants. Defendants vacated the premises in
April 2016, so possession was no longer at issue.
In September 2016, plaintiff filed the operative first
amended complaint seeking damages for breach of a commercial
lease of real property. Plaintiff alleged that the lease terms were
set forth in an unsigned written lease agreement attached to the
pleading. According to the agreement, the lease began on April 1,
2013 and ended on March 31, 2018. The base rent was $6,500 per
month plus 60% of common area expenses. The agreement also
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provided for rent increases of at least three percent per year.
Plaintiff alleged that defendants breached the agreement by
failing to pay rent from March 2015 through September 2016.
Defendants denied signing the written lease agreement.
Instead, they contended they entered into an oral “gross”
agreement with plaintiff for a fixed monthly rent of $6,500.
Defendants also contended that the agreement attached to the
complaint is a “fraudulent document manufactured by Parvi[z]
Sarshar, [plaintiff’s] sole and managing member,” to obtain a
refinancing loan from HAB Bank.
2. Discovery Proceedings
Because the court’s issuance of terminating sanctions was
influenced by the history of discovery noncompliance by plaintiff,
we summarize the relevant discovery proceedings below.
2.1. The Document Request and Initial Response
In October 2016, defendants served plaintiff with written
discovery requests which included a request for production of
documents. The request for production of documents sought,
among other things, the following:
• drafts of the unsigned lease agreement;
• documents evidencing transmission of the
unsigned lease agreement to defendants;
• electronically stored information pertaining to
the drafting of the unsigned lease agreement
and transmission of the agreement to
defendants;
• documents evidencing monies paid by
defendants to plaintiff in the last five years;
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• documents evidencing rent received by plaintiff
since April 27, 2016; and
• documents evidencing efforts undertaken by
plaintiff to re-lease the property since April 27,
2016.
Plaintiff did not serve timely responses to the discovery
requests. Accordingly, defendants filed motions to compel
responses to form interrogatories and requests for production of
documents, to deem admitted requests for admission, and for
monetary sanctions.1
On June 2, 2017, while defendants’ motions to compel were
pending, plaintiff served responses to the discovery requests.
Those responses included plaintiff’s response to the request for
production of documents which asserted that after a diligent
search and reasonable inquiry, many of the requested documents
were destroyed and are no longer in plaintiff’s possession or never
existed. Plaintiff’s response to the document request was verified
under penalty of perjury by plaintiff’s managing member, Parviz
Sarshar.
2.2. The June 23, 2017 Order and Supplemental
Response
On June 23, 2017, the court issued an order granting
defendants’ motions to compel. Plaintiff was ordered to
supplement its responses to form interrogatories, requests for
admission, and the document request by July 14, 2017. To the
extent any discovery request called for attorney-client
1The moving papers, opposition, and reply are not in the appellate
record.
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communications, attorney work product, or financial information,
plaintiff waived all objections. Plaintiff was also ordered to pay
monetary sanctions in the amount of $3,860.
On August 18, 2017, plaintiff served a supplemental
response indicating that documents responsive to five requests
were destroyed and no longer in plaintiff’s possession or never
existed.2 Plaintiff’s supplemental response was verified under
penalty of perjury by Sarshar.
2.3. Sarshar’s Deposition
In March 2018, defendants noticed Sarshar’s deposition as
plaintiff’s director, managing agent, and/or employee. The
deposition notice also sought production of documents responsive
to 38 enumerated requests. Many of the requested documents
were the same documents sought by defendants in their October
2016 document request.3
On May 14, 2018, plaintiff served its response to the
deposition notice and objected to all 38 enumerated requests for
documents. For many of the requests, plaintiff stated it had
produced those documents on May 24, 2017 or during the course
of discovery. Those documents, however, are not in the appellate
2 Plaintiff agreed to produce documents responsive to two requests—
those pertaining to communications between plaintiff and contractors,
and documents between plaintiff and any person concerning the lease
of the premises to defendants. It is unclear from the appellate record
whether plaintiff produced those documents.
3 For example, the October 2016 document request and the March 2018
deposition notice sought documents and electronically stored
information evidencing transmission of the unsigned written lease
agreement to defendants, monies paid by defendants to plaintiff, and
the lease of the property after April 2016.
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record. Once again, the response was verified under penalty of
perjury by Sarshar.
Sarshar was deposed on May 22, 2018. He did not produce
a single document at the deposition. And notwithstanding his
prior verified responses, Sarshar testified that he did not search
electronically stored information for documents responsive to
defendants’ prior document requests. For example, defendants’
counsel asked Sarshar, “I’m asking what you did to search for
emails to and from defendants. What did you do?” In response,
Sarshar said, “So far nothing.” And when defendants’ counsel
asked Sarshar if he had done anything to search his phone to see
if he had any text messages between himself and defendants,
Sarshar responded, “No.”
Sarshar’s testimony also established that plaintiff had not
complied with the court’s June 23, 2017 order. Specifically,
although they existed, plaintiff had not produced documents
evidencing a written lease agreement, rent payments made by
defendants, and efforts by plaintiff to mitigate its damages. By
way of example, Sarshar testified that drafts of the unsigned
lease agreement were prepared by his attorney and sent by email
to Sarshar and defendants. Sarshar also testified that he had the
original written lease agreement with defendants’ “wet”
signatures on it, and he kept a handwritten ledger of all cash
payments made by defendants for their rent. In fact, Sarshar
acknowledged that records reflecting rent payments made by
defendants were kept in his office but were not provided to his
attorney so they could be produced to defendants. As for efforts
by plaintiff to lease the property after April 2016, Sarshar
confirmed he had documents showing that the property was
listed by a real estate agent or broker.
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After Sarshar’s deposition, defendants attempted to obtain
informal compliance with the court’s June 23, 2017 order and
plaintiff’s discovery obligations. Those attempts were rebuffed by
plaintiff.
2.4. The February 22, 2019 Order
On February 22, 2019, the court denied plaintiff’s motion to
extend the discovery cut-off and application to continue
defendants’ motions for summary judgment and terminating
sanctions. The court also imposed monetary sanctions against
plaintiff and its counsel, jointly and severally, in the amount of
$1,500. The court explained that plaintiff had failed to justify its
delay in seeking further discovery and had not proven it was
diligent in pursuing discovery.
3. Defendants’ Motion for Terminating Sanctions
On August 1, 2018, defendants moved for terminating
sanctions based on plaintiff’s violation of the court’s June 23,
2017 order. In the alternative, defendants sought issue sanctions,
or an order compelling plaintiff to produce documents responsive
to the October 2016 document request and the March 2018
deposition notice. Defendants also sought monetary sanctions for
costs incurred in enforcing the court’s June 2017 order. Plaintiff
opposed the motion.
Following a hearing on March 15, 2019, the court granted
the motion and dismissed the case with prejudice due to
plaintiff’s willful violation of the June 23, 2017 order. The court
also imposed monetary sanctions against plaintiff and its counsel,
jointly and severally, in the amount of $3,500. The court
explained that defendants repeatedly sought informal compliance
with the court’s June 2017 order and plaintiff’s other discovery
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obligations before filing the motion. The court emphasized that
defendants’ motion was based on plaintiff’s violation of the June
2017 order, not plaintiff’s failure to produce documents in
response to Sarshar’s deposition notice. The court also explained
that defendants did not uncover plaintiff’s violation of the order
until Sarshar’s deposition and “the missing evidence” was
“crucial” to defendants’ defense.
The court subsequently entered a judgment of dismissal in
favor of defendants. Plaintiff appeals from the judgment.
DISCUSSION
Plaintiff contends the court abused its discretion in issuing
a terminating sanction because plaintiff had not repeatedly
violated discovery orders, defendants’ motion was untimely, and
the court failed to consider less drastic sanctions.
1. Legal Standards
“Misuse of the discovery process includes failing to respond
or submit to authorized discovery, providing evasive discovery
responses, disobeying a court order to provide discovery,
unsuccessfully making or opposing discovery motions without
substantial justification, and failing to meet and confer in good
faith to resolve a discovery dispute when required by statute to
do so.” (Karlsson v. Ford Motor Co. (2006) 140 Cal.App.4th 1202,
1214.) The court may impose terminating sanctions “after
considering the totality of the circumstances: conduct of the party
to determine if the actions were willful; the detriment to the
propounding party; and the number of formal and informal
attempts to obtain the discovery.” (Lang v. Hochman (2000) 77
Cal.App.4th 1225, 1246.) “A decision to order terminating
sanctions should not be made lightly. But where a violation is
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willful, preceded by a history of abuse, and the evidence shows
that less severe sanctions would not produce compliance with the
discovery rules, the trial court is justified in imposing the
ultimate sanction.” (Mileikowsky v. Tenet Healthsystem (2005)
128 Cal.App.4th 262, 279–280.)
“ ‘The court’s discretion to impose discovery sanctions is
broad, subject to reversal only for manifest abuse exceeding the
bounds of reason.’ ” (Reedy v. Bussell (2007) 148 Cal.App.4th
1272, 1293.) This includes orders imposing terminating sanctions
for discovery noncompliance. (See Creed-21 v. City of Wildomar
(2017) 18 Cal.App.5th 690, 702.) Under this abuse of discretion
standard, we review the trial court’s factual determinations for
substantial evidence and infer all findings necessary to support
the discovery sanctions. (Reedy, at p. 1292.)
2. The Court did not abuse its discretion by issuing a
terminating sanction.
At the outset, we reject plaintiff’s contention that
defendants should have brought a motion to compel further
responses and, therefore, their motion for terminating sanctions
was untimely. As noted by the lower court, defendants’ motion
was not based on plaintiff’s failure to produce documents at
Sarshar’s deposition—it was based on plaintiff’s violation of the
June 23, 2017 order. We also agree with the court that
defendants did not discover plaintiff’s violation of the June 2017
order until Sarshar’s May 2018 deposition, “and [defendants]
filed the instant motion promptly after that deposition took
place.” (See Sherman v. Kinetic Concepts, Inc. (1998) 67
Cal.App.4th 1152, 1163 [plaintiffs could not have moved to
compel production of documents they did not know existed, nor
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could they have sought sanctions before they determined
defendant’s responses were inadequate or evasive].)
Here, substantial evidence supports the court’s conclusion
that the sanction of dismissal was appropriate. For more than a
year before the dismissal, defendants had attempted to obtain
evidence that would have assisted the determination whether
defendants breached a written lease agreement and whether
plaintiff mitigated its damages by leasing the property to another
tenant. Defendants’ attempts to obtain voluntary cooperation
were rebuffed. Defendants sought the assistance of the court, and
in June 2017, the court ordered plaintiff to produce documents
responsive to defendants’ October 2016 document request and
imposed monetary sanctions against plaintiff. After the June
2017 order was made, plaintiff failed to obey the order and
defendants were forced to request production of many of the same
documents in Sarshar’s March 2018 deposition notice. And, as we
noted, Sarshar did not produce a single document at his May
2018 deposition.
Sarshar’s deposition testimony also supports the court’s
finding that plaintiff’s noncompliance was willful. First,
notwithstanding his prior verified responses, Sarshar testified
that he never searched for emails or text messages responsive to
defendants’ prior document requests. Second, Sarshar
acknowledged that records reflecting rent payments made by
defendants were kept in his office but were not provided to his
attorney so they could be produced to defendants. Thus, the
record established that plaintiff refused to obey a court order.
This was not an inadvertent failure to respond to discovery.
Nor does it appear lesser sanctions would have sufficed.
Plaintiff did not comply with the court’s June 2017 order even
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after it was forced to pay a monetary sanction. Additional
monetary sanctions would not have provided defendants the
information to which they were entitled. Further, an evidence
sanction is not effective where the party withholding the evidence
is not the party who wishes to use it. And the only issue sanction
we can envision under these circumstances would be an order
precluding plaintiff from presenting evidence of monetary
damages, a result equivalent to a dismissal of the lawsuit.
Finally, although plaintiff argues the imposition of a lesser
sanction was required, it did not urge the trial court to impose a
lesser sanction and did not identify which lesser sanction would
have sufficed.
Based on the entire record, the court did not abuse its
discretion in issuing a terminating sanction.
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DISPOSITION
The judgment is affirmed. Defendants shall recover their
costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
LAVIN, Acting P. J.
WE CONCUR:
EGERTON, J.
DHANIDINA, J.
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