Jesse Zaragoza v. Farm and Ranch Management Services LLC, et al

Case Number

20CV02833

Case Type

Hearing Date / Time

Mon, 06/24/2024 - 10:00

Nature of Proceedings

Motion For Terminating Sanctions or, Alternatively, Compelling Jesse Zaragoza’s Discovery Responses and Deeming Admitted Truth of Facts and Genuineness of Documents, and for Imposition of Monetary Sanctions

Tentative Ruling

Jesse Zaragoza v. Farm and Ranch Management Services LLC, et al.

Case No. 21CV04978 consolidated with Case No. 20CV02833          

Hearing Date: June 24, 2024                                      

MATTER:                Motion of Farm and Ranch Management Services, LLC and Jay Caplan For Terminating Sanctions or, Alternatively, Compelling Jesse Zaragoza’s Discovery Responses and Deeming Admitted Truth of Facts and Genuineness of Documents, and for Imposition of Monetary Sanctions

ATTORNEYS:        For Plaintiff and Cross-Defendant Jesse Zaragoza: Self                                      Represented

                             For Defendants AG Roots, LLC, Heirloom Valley LLC, Wil                                                Crummer, Jack Crummer, Keith Crummer, Jay Caplan,

                                    Marybeth Hammond, and Defendant and Cross-Complainant Farm and Ranch Management Services, LLC: Lance M. Williams, Amanda D. McGee, Boren, Osher & Luftman, LLP

TENTATIVE RULING:

The motion of Farm and Ranch Management Services, LLC and Jay Capla for sanctions is granted in part and denied in part as follows:

1. Terminating, Issue, and Evidentiary Sanctions are denied.

2. Plaintiff Jesse Zaragoza shall provide complete, code-compliant, responses, without objections, no later than July 15, 2024, to:

            a. Farm and Ranch Management Services, LLC’s Requests for Production of Documents and Things (Set One);

            b. Farm and Ranch Management Services, LLC’s Special Interrogatories (Set One);

            c. Farm and Ranch Management Services, LLC’s Form Interrogatories - General (Set One);

            d. Farm and Ranch Management Services, LLC’s Requests for Admission (Set One);

            e. Jay Caplan’s Requests for Production of Documents and Things (Set One);

            f. Jay Caplan’s Special Interrogatories (Set One);

            g. Jay Caplan’s Form Interrogatories - General (Set One); and

            h. Jay Caplan’s Requests for Admission (Set One).

3. The request for monetary sanctions is granted in favor of Farm and Ranch Management Services, LLC and Jay Caplan and against plaintiff Jesse Zaragoza in the amount of $3,260.00, to be paid to counsel for Farm and Ranch Management Services, LLC and Jay Caplan, by plaintiff, on or before July 15, 2024.

Background:

Plaintiff Jesse Zaragoza filed his original complaint in this matter on December 20, 2021. On December 21, 2021, plaintiff filed the operative first amended complaint (FAC). The FAC alleges seven causes of action against defendants Farm & Ranch Management Services, LLC (FRMS), AG Roots, LLC (AG Roots), Heirloom Valley, LLC (Heirloom), Wil Crummer (Wil), Jack Crummer (Jack), Keith Crummer (Keith), Jay Caplan (Caplan), and Marybeth Hammond (Hammond) for: (1) racial discrimination; (2) disability discrimination; (3) “[v]iolation of Moore-Brown-Roberti Family Rights Act (‘FRA’) & FEHA”; (4) retaliation in violation of FRA and FEHA; (5) failure to prevent discrimination; (6) wrongful termination in violation of public policy; and (7) intentional infliction of emotional distress. (Note: To avoid confusion due to common surnames, the court will refer to some defendants by their first names. No disrespect is intended.) As alleged in the FAC, FRMS is a management company that provides administration, payroll, and banking services to entities licensed by California’s Department of Cannabis Control (DCC). (FAC, ¶ 2.) AG Roots and Heirloom are licensed by DCC for cannabis cultivation and related activities. (Id. at ¶¶ 3, 4.) Wil is a manager and member of AG Roots and the Chief Executive Officer, manager, and member of Heirloom (Id. at ¶ 5.) Jack is the Chief Executive Officer and also a manager and member of AG Roots. (Id. at ¶ 6.) Keith is a manager and member of FRMS. (Id. at ¶ 7.) Caplan is a consultant and employee of all defendants in this matter. (Id. at ¶ 8.) Hammond is an employee of all defendants in this matter. (Id. at ¶ 9.) Plaintiff alleges that during his employment as defendants’ Vice President of Operations for cannabis cultivation, he and other workers were treated in a disparate and discriminatory manner in terms of compensation and subjected to harassment and discrimination based on race, color, and national origin as well as disability. Plaintiff was also subjected to retaliation that resulted in plaintiff’s termination.

On February 16, 2022, AG Roots, Caplan, and Hammond filed an answer to the FAC generally denying its allegations and asserting forty-seven affirmative defenses. On March 10, 2022, Heirloom, Wil, and Keith filed an answer to the FAC also generally denying its allegations and asserting forty-seven affirmative defenses. On March 14, 2022, Jack filed his answer to the FAC generally denying its allegations and asserting forty-seven affirmative defenses. The default of FRMS was entered on October 4, 2022, and later set aside by stipulation of the parties.

On April 25, 2022, Case No. 21CV04978 was consolidated with Case No. 20CV02833, with Case No. 21CV04978 being designated the lead case.

On December 22, 2022, Heirloom filed two motions, one to compel plaintiff to provide responses to a first set of special interrogatories (the SIs) and for sanctions and the other to compel plaintiff to provide responses and produce documents responsive to its first set of requests for production of documents (the RFPs) and for sanctions. On January 4, 2023, Heirloom filed a motion to compel plaintiff to further respond to its requests for admission, set one (the RFAs) and for sanctions. On January 23, 2023, the court continued the hearing on the discovery motions to March 20, 2023, to allow each to be heard concurrently with a case management conference scheduled for the same date. (See Jan. 23, 2023, Minute Order.)

On March 6, 2023, plaintiff’s previous attorney filed an ex parte application to shorten the time required for notice of a hearing on a motion to be relieved as counsel based on a breakdown in the attorney-client relationship and plaintiff’s desire to employ new counsel. (See March 6, 2023, Ex Parte Application, Attachment 7 [Esparza Decl.], ¶¶ 3, 4, 9.) On March 7, 2023, plaintiff filed and served a substitution of attorney substituting himself for attorney Esparza. On March 20, 2023. the court ordered the motion to be relieved as counsel off-calendar as moot due to the filing of a substitution of attorney. Considering plaintiff’s stated intention to employ new counsel, the court continued the hearing on the discovery motions to May 19, 2023, to allow plaintiff sufficient time to locate new counsel. The court ordered plaintiff and Heirloom to file and serve a status report prior to the continued hearing addressing outstanding matters. The following day, March 21, 2023, Heirloom filed a motion for an order compelling plaintiff to provide further responses to a first set of employment form interrogatories (the FIs) and for monetary sanctions. The FIs motion was set for hearing on June 5, 2023.

Court records further reflect that on March 23, 2023, FRMS filed an answer to the FAC and a cross-complaint alleging five causes of action against plaintiff for breach of contract, breach of fiduciary duty, breach of the duty of loyalty, conversion, and unfair business practice in violation of Business and Professions Code section 17200. FRMS alleges that while plaintiff was employed by FRMS, plaintiff used FRMS’s work product, sales and financial information, and customer lists to compete against FRMS and that plaintiff violated a non-disclosure agreement by failing to disclose personal business dealings in the cannabis industry in direct conflict with plaintiff’s duties at FRMS . On April 26, 2023, plaintiff, in his self-represented capacity, filed his original answer to the cross-complaint of FRMS. On May 12, 2023, plaintiff filed an amended answer to the cross-complaint generally denying its allegations and asserting eleven affirmative defenses.

On August 7, 2023, the court granted motions to compel further responses to special interrogatories (set one), requests for production of documents (set one), and employment form interrogatories (set one) in favor of Heirloom. Plaintiff was given a deadline of August 31, 2023, to provide complete, verified, code-compliant responses to the discovery requests and was sanctioned $1,000.00.

Due to plaintiff’s continued failure to respond, Heirloom filed a motion for an order imposing issue, evidentiary, and monetary sanctions against plaintiff. On November 20, 2023, the court made the following orders:

“(1) Defendant Heirloom Valley, LLC’s request for issue or evidentiary sanctions will be denied without prejudice;

“(2) Plaintiff Jesse Zaragoza shall comply with the August 7, 2023 court order, in full, by providing complete, verified, code-compliant further responses to the discovery requests, without objections, no later than December 11, 2023;

“(3) The request of Heirloom for an award of monetary sanctions is granted in favor of Heirloom and against plaintiff Jesse Zaragoza in the amount of $2,420.00, to be paid to counsel for Heirloom, by plaintiff, on or before December 11, 2023;

“(4) Heirloom shall give notice of this ruling to plaintiff at both the 3905 State Street, Suite 7286, address, and the 3070 Lucinda Lane address, as well as provide a courtesy copy via email, no later than November 21, 2023.”

Counsel for the defendants filed a motion for terminating sanctions on December 19, 2023, due to plaintiff’s continued failure to comply with discovery orders. On February 26, 2024, the motion was granted and plaintiff’s FAC, in Case No. 21CV04978 was stricken. Sanctions in Case No. 20CV02833 were denied.

The remaining portions of this action are the cross-complaint of FRMS against plaintiff and the complaint in Case No. 20CV02833 against Caplan.

On March 12, 2023, FRMS and Caplan each served: (1) Requests of Production of Documents; (2) Special Interrogatories; (3) Form Interrogatories; and (4) Requests for Admission. (Williams Dec., ¶ 18 & Exh. G.) Responses to the discovery were due no later than April 16, 2024. (Id., at ¶ 20.)

As of the date of drafting the present motion, plaintiff had not responded to any of the discovery. (Williams Dec., ¶ 23.)

FRMS and Caplan now move for terminating sanctions, striking plaintiff’s amended answer to FRMS’s cross-complaint, and striking the complaint against Caplan in Case No. 20CV02833.

Plaintiff opposes the motion by providing a declaration. Plaintiff declares that he submitted responses to the Form Interrogatories on June 11, 2024. (Zaragoza Dec., ¶ 8.) Plaintiff does not claim to have provided responses to any of the other discovery but declares: “I pledge to continue making reasonable attempts to comply with discovery and can supplement any responses as needed prior to the court hearing on 6/24/2024. (Id., at ¶ 11.)

FRMS and Caplan filed their reply on June 14, 2024, and attach plaintiff’s responses to the form interrogatories as Exhibit 1 to the reply declaration of Williams. The court notes that many of the responses are non-substantive and simply state: “Response will be supplemented prior to the court hearing on 6/24/24.”

Analysis:

            Filing Requirements

As an initial matter: “All electronic documents must be in text searchable format and must comply with the formatting and content requirements of the California Rules of Court for electronic documents, including particularly CRC 3.1110(f)(4) requiring electronic bookmarks.” (Super. Ct. Santa Barbara County, Local Rules, rule 1012 (c)(1).)

“Unless they are submitted by a self-represented party, electronic exhibits must include electronic bookmarks with links to the first page of each exhibit and with bookmark titles that identify the exhibit number or letter and briefly describe the exhibit.” (Cal. Rules of Court, rule 3.110 (f)(4).)

“Compliance with all of the formatting requirements for electronic documents is extremely important for the court’s timely consideration of e-filed documents. In cases of noncompliance, the court may, in its discretion, order any, or all, of the following in addition to any other sanction permitted by law: (i) the noncomplying document to be stricken as improperly filed; (ii) the continuance of the hearing to which the noncomplying document pertains; or, (iii) the imposition of monetary sanctions for violation of the California Rules of Court or these Local Rules, following adequate notice and an opportunity to be heard.” (Super. Ct. Santa Barbara County, Local Rules, rule 1012 (c)(2).)

Counsel for FRMS and Caplan have not complied with the formatting requirements. They have submitted 132 pages of exhibits to the Williams declaration in support of the motion, and an additional number of exhibits in reply to the opposition, without electronic bookmarks. Counsel is expected to comply with the Rules of Court and the Local Rules in any future filings with this court.

            Failure to Respond to Discovery

As pointed out to plaintiff twice previously: “[M]ere self-representation is not a ground for exceptionally lenient treatment. Except when a particular rule provides otherwise, the rules of civil procedure must apply equally to parties represented by counsel and those who forgo attorney representation. [Citation.] . . . A doctrine generally requiring or permitting exceptional treatment of parties who represent themselves would lead to a quagmire in the trial courts, and would be unfair to the other parties to litigation.” (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 984-985.)

“California’s pretrial discovery procedures are designed to minimize the opportunities for fabrication and forgetfulness, and to eliminate the need for guesswork about the other side’s evidence, with all doubts about discoverability resolved in favor of disclosure.” (Glenfed Development Corp. v. Superior Court (1997) 53 Cal.App.4th 1113, 1119.)

Sanctions available for disobeying a court order to provide discovery responses include: (1) Monetary sanctions; (2) Issue sanctions; (3) Evidence sanctions; (4) Terminating sanctions; and (5) Contempt. (Code Civ. Proc., § 2023.030.)

If a party “fails to obey an order compelling further responses to interrogatories, the court may make those orders that are just, including the imposition of an issue sanction, an evidence sanction, or a terminating sanction.” (Code Civ. Proc., § 2030.300, subd. (e).)

If a party “fails to obey [an] order compelling a response [to a demand for production of documents], the court may make those orders that are just, including the imposition of an issue sanction, an evidence sanction, or a terminating sanction.” (Code Civ. Proc., § 2031.300, subd. (c).)

FRMS and Caplan rely heavily on plaintiff’s failure to obey prior court orders, pertaining to discovery, in favor of other defendants that were previously parties to this case. Specifically, the orders pertain to discovery propounded by Heirloom and the resulting striking of plaintiff’s complaint in Case No. 21CV04978. It should be noted that plaintiff was given multiple opportunities to provide the requested discovery to Heirloom, and to comply with court orders, before this court granted the “doomsday” terminating sanctions as to plaintiff’s complaint in that action.

This is not a situation where plaintiff has failed to obey prior court orders pertaining to discovery propounded by either FRMS or Caplan. As the court sees it, the present dispute solely pertains to plaintiff’s failure to respond to set one of discovery propounded by FRMS and by Caplan. No prior orders have been made with respect to that discovery.

It is clear that plaintiff has failed to properly respond to the discovery propounded by FRMS and Caplan. However, terminating, evidence, or issue sanctions would be unwarranted at this time.

As a first step, plaintiff will be ordered to provide complete, code-compliant, responses to the discovery propounded by FRMS and Caplan. Given plaintiff’s history of ignoring his discovery obligations, should he fail to provide the responses by the date indicated, the court will be inclined to issue greater sanctions up to and including terminating sanctions.

            Monetary Sanctions

“The court may impose a monetary sanction ordering that one engaging in the misuse of the discovery process, or any attorney advising that conduct, or both pay the reasonable expenses, including attorney’s fees, incurred by anyone as a result of that conduct. The court may also impose this sanction on one unsuccessfully asserting that another has engaged in the misuse of the discovery process, or on any attorney who advised that assertion, or on both. If a monetary sanction is authorized by any provision of this title, the court shall impose that sanction unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.” (Code Civ. Proc., § 2023.030, subd. (a).)

Plaintiff has not acted with substantial justification in failing to provide responses to discovery and he has engaged in misuse of the discovery process. Monetary sanctions are warranted.

FRMS and Caplan request sanctions in the amount of $7,784.00, consisting of 6.2 hours of time at $495.00 per hour and 9.8 hours of time at $475.00 per hour, plus $60.00 for the filing fee.

The court finds that 8 hours at $400 per hour is a reasonable amount of time and a reasonable hourly rate for the preparation of the motion, reviewing the opposition, the reply to the opposition, preparing for hearing, and attending the hearing. Therefore, the court will award monetary sanctions in the amount of $3,200.00 plus the $60.00 filing fee, for a total of $3,260.00.