Jesse Zaragoza et al vs Farm and Ranch Management Services LLC et al

Case Number

21CV04978

Case Type

Hearing Date / Time

Mon, 11/20/2023 - 10:00

Nature of Proceedings

Motion: Sanctions

Tentative Ruling

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

Case No. 21CV04978

           

Hearing Date: November 20, 2023                                        

MATTER:                Defendant Heirloom Valley, LLC’s Motion For Issue and/or Evidentiary Sanctions and for Imposition of Monetary Sanctions Against Plaintiff Jesse Zaragoza

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:

(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.

Background:

Plaintiff Jesse Zaragoza filed his operative first amended complaint (FAC) in this matter on December 21, 2021. 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 March 7, 2023, plaintiff filed a proof of service of the FAC on FRMS.

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, he 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

On August 31, 2023, plaintiff sent an email to defense counsel advising that he is “sending certified mail for the August 31st ruling. Can you please verify the proper mailing address.” (McGee Dec., ¶ 15 & Exh. 7.) Lance Williams, of defense counsel’s office, provided the correct mailing address, and plaintiff acknowledged receipt of the same. (Ibid.)

“On September 15, 2023, [defense counsel] received, via certified mail, a money order check from Plaintiff in the amount of $1,000.00. To date, although Plaintiff has paid the $1,000.00 sanctions award ordered by the Court, he still has not provided any responses to the court-ordered Discovery.” (McGee Dec., ¶ 17.)

Heirloom now moves for issue or evidentiary sanctions and for monetary sanctions due to plaintiff’s failure to comply with the August 7, 2023 order. No opposition or any other response has been filed by plaintiff.

“The Discovery at issue consists of seven (7) Employment Form Interrogatories, thirty-five (35) Special Interrogatories, and eighty-six (86) Requests for Production of Documents, all of which seek information and documents directly relevant to the allegations in Plaintiff’s operative Complaint.” (McGee Dec., ¶ 20.)

Analysis:

As a preliminary matter: The address where plaintiff was served was 3905 State Street, Suite 7-286, Santa Barbara. The address listed on plaintiff’s answer to the cross-complaint, as well as the substitution of attorney, is 3070 Lucinda Lane, Santa Barbara. As the last document filed by plaintiff lists the State Street address, service of the current motion was proper pursuant to Code of Civil Procedure section 1013. However, out of an abundance of caution, plaintiff should, going forward, be served at both addresses.

“[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.)

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 lesser sanction fails to curb misuse, a greater sanction is warranted: continuing misuses of the discovery process warrant incrementally harsher sanctions until the sanction is reached that will curb the abuse.” (Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967, 992.)

“A court has broad discretion in selecting the appropriate penalty” for a party’s refusal to obey a discovery order. (Lopez v. Watchtower Bible & Tract Society of New York, Inc. (2016) 246 Cal.App.4th 566, 604.) Despite this broad discretion, the courts have long recognized that the terminating sanction is a drastic penalty and should be used sparingly. A trial court must be cautious when imposing a terminating sanction because the sanction eliminates a party’s fundamental right to a trial, thus implicating due process rights.

“While sanctions are discretionary, the term judicial discretion implies absence of arbitrary determination, capricious disposition, or whimsical thinking. It imports the exercise of discriminating judgment within the bounds of reason. To exercise the power of judicial discretion, all the material facts must be known and considered, together also with the legal principles essential to an informed, intelligent and just decision. [Citation.] Therefore, the court must examine the entire record in determining whether the ultimate sanction should be imposed. [Citations.]” (Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 796.)

Given that there is currently no trial date set, Heirloom will not be prejudiced by another short delay in receiving discovery responses. The court will exercise its discretion and give plaintiff another chance to provide proper, code-compliant, responses without issuing issue or evidentiary sanctions. Should plaintiff fail to comply with this order, the court will be inclined to issue greater sanctions.

However, the court again finds that plaintiff has failed to act with substantial justification and no other circumstances exist that make the imposition of monetary sanctions unjust.

Counsel for Heirloom have submitted a declaration claiming that Jeremy J. Oshler spent one hour, at $595.00 per hour, in connection with the current motion, and that Amanda D. McGee spent 14.7 hours, at $475.00 per hour, in connection with the motion, for a total in attorney fees of $7,577.50 in attorney fees. (McGee Dec., ¶ 36.) Billing records for the motion are attached. (McGee Dec., ¶ 37 & Exh. 8.) Heirloom also claims $60.00 for the filing fee and $78.76 in costs incurred for legal research. (McGee Dec., ¶ 37.)

The court has reviewed the billing records submitted in support of the motion and generally finds them to be reasonable. However, the court finds “revisions” to the motion, totaling 9.8 hours were excessive. The court further finds that the reasonable hourly rate for the motion to be $400. Therefore, the court will award sanctions in the amount of $2,360.00 in fees plus the $60.00 filing fee, for a total of $2,420.00.