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

Case Number

21CV04978

Case Type

Hearing Date / Time

Mon, 02/26/2024 - 10:00

Nature of Proceedings

Motion: TERMINATING SANCTIONS OR, ALTERNATIVELY, FOR ISSUE AND/OR EVIDENTIARY SANCTIONS AND FOR IMPOSITION OF MONETARY SANCTIONS AGAINST PLAINTIFF JESSE ZARAGOZA IN THE AMOUNT OF $8,390.50 FOR PLAINTIFFS REPEATED

Tentative Ruling

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

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

Hearing Date: February 26, 2024                                         

MATTER:                Defendants’ Motion For Terminating Sanctions or, Alternatively, 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. Defendants’ motion for terminating sanctions in Case No. 21CV04978 is granted. Plaintiff Jesse Zaragoza’s First Amended Complaint is stricken.

2. Defendant’s request that the sanctions be imposed in Case No. 20CV02833 is denied.

3. Defendants shall prepare a formal order and judgment that conforms to this ruling.

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 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

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.”

Defense counsel filed the present motion on December 19, 2023, and properly served plaintiff. In the supporting declaration filed concurrently with the motion, defense counsel declares the following:

“On December 11, 2023, the day Plaintiff’s responses and monetary sanctions were due, Plaintiff e-mailed my office asking for an electronic way of sending the payment for sanctions due that day. My office responded with wire instructions to our firm’s client trust account, and requested that Plaintiff also send the complete, verified, code-compliant further responses to the outstanding discovery, without objections, as well as all responsive documents that the Court ordered to be produced that day. Attached hereto as Exhibit “F” is a true and correct copy of said e-mail exchange, sans attachment. ( McGee Dec., ¶ 8.)

“Plaintiff failed to make any wire payment or produce any discovery responses to my office. Instead, later that night at 11:57 p.m., three minutes before the Court-imposed deadline, Plaintiff e-mailed defense counsel stating that he had been attempting to “ ‘communicate a bereavement request’ ” purportedly because his “ ‘grandmother passed away and [he] buried her this past Friday.’ ” Plaintiff also advised that “ ‘[he] retained a lawyer to assist in the discovery requests and hopefully the case moving forward’ ” and that he “ ‘will get [defense counsel] the payment and responses this week so we can continue forward.’ ” Attached hereto as Exhibit “G” is a true and correct copy of said e-mail correspondence.” (McGee Dec., ¶ 9.)

“To date, Plaintiff has failed to produce the outstanding responses which were originally due over one year ago, failed to issue payment to defense counsel for the outstanding monetary sanctions, and failed to comply with yet another Order from this Court.” (McGee Dec., ¶ 13.)

[Note: On April 25, 2022, this matter was consolidated with Case No. 20CV02833, with this case being designated the lead case. Jay Caplan is the sole defendant in Case No. 20CV02833.]

Analysis:

“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).)

Plaintiff has failed to obey orders compelling responses to interrogatories and demands for production of documents.

“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.)

“The trial court may order a terminating sanction for discovery abuse ‘after considering the totality of the circumstances: [the] 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.’ [Citation.]” (Creed-21 v. City of Wildomar (2017) 18 Cal.App.5th 690, 702.)

“A decision to order terminating sanctions should not be made lightly. But where a violation is 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.)

“[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.)

In Del Junco v. Hufnagel (2007) 150 Cal.App.4th 789, the court held that terminating sanctions were warranted when it “became obvious” that a party had no intention of answering discovery or complying with the judge’s orders. (Id., at p.p. 799-800.)

It has now been over one-year that Heirloom has been attempting to obtain discovery responses from plaintiff. Plaintiff has been given every opportunity to comply with the orders directing him to provide responses, yet he continues to fail to do so. The court included in its November 20, 2023 order that if plaintiff did not comply it would be inclined to issue greater sanctions. Heirloom’s counsel has reached out to plaintiff in efforts to encourage him to comply with the court’s orders. Plaintiff, at most, makes excuses as to why he has not responded and falsely represents that responses are forthcoming. The court finds that plaintiff’s failure to comply with the orders and produce discovery is intentional and willful. This willful failure to respond to discovery is extremely prejudicial to Heirloom in preparing a defense. It has become obvious to the court that plaintiff has no intention of answering discovery or complying with the court’s discovery orders. Terminating sanctions are appropriate at this time as it does not appear that any lesser sanctions would compel compliance.

However, the discovery responses at issue only pertain to Heirloom and not any of the other defendants. The discovery was propounded by Heirloom and the previous discovery motions have been granted only in favor of Heirloom.

There is a split in authority as to whether parties who did not propound the discovery may be awarded sanctions against the party who failed to respond to the discovery. “In such a situation, the court exercising inferior jurisdiction can and must make a choice between the conflicting decisions.” (Auto Equity Sales, Inc. v. Superior Court of Santa Clara County (1962) 57 Cal.2d 450, 456.)

The court finds the following holding more reasoned and sounder than any conflicting authority:

“[T]o dismiss an action in favor of a party who took no part in the discovery dispute until it was time to join the motion for sanctions would be to grant a windfall judgment to a party who had done nothing to deserve it. Surely this is not what the Legislature had in mind when it instructed the courts to issue “ ‘orders that are just.’ ” This is not to say a non-propounding party should never be awarded discovery sanctions. As the court recognized in [Calvert Fire Ins. Co. v. Cropper (1983) 141 Cal.App.3d 901, 904-905] there can be circumstances in which the discovery interests of the propounding party and a co-party are so closely aligned it would be a useless duplication of effort for both parties to pursue the same discovery and invoke the same remedies against an opposing party. It is up to the trial court in the exercise of its discretion to determine whether in a particular case the interests of the propounding party and a co-party are sufficiently aligned so that a sanction award to both would be just.” (Parker v. Wolters Kluwer United States, Inc. (2007) 149 Cal.App.4th 285, 301-302.)

“In Calvert the court observed the interests of the propounding party and the coparty were “ ‘identical,’ ” (ibid.), but we do not interpret Calvert as holding the parties’ interests need always be identical so long as they are close enough the non-propounding party can demonstrate prejudice from the sanctioned party’s violation of the discovery rules.” (Id. at p. 301, fn. 46.)

Here, the interests of all defendants, in Case No. 21CV04978, are identical. The allegations of the FAC are against all defendants for the same alleged actions. It would be “a useless duplication of effort” for the defendants in that case to pursue the same discovery and invoke the same remedies against plaintiff. As such, the motion for terminating sanctions will be granted in Case No. 21CV04978 in favor of all named defendants. Plaintiff’s FAC will be stricken pursuant to Code of Civil Procedure section 2023.030, subdivision (d)(1).

Defendants also request that the sanctions apply to consolidated Case No. 20CV02833. As noted above, that case is solely against defendant Caplan. It involves allegations that Caplan made several false statements about plaintiff following the conclusion of plaintiff’s employment. (Complaint, ¶¶ 6-9.) While there is some minor overlap in the allegations contained in the pleadings of both cases, the court finds that the interests of Caplan, in Case No. 20CV02833, are not sufficiently aligned or closely enough related to Heirloom’s interests that Caplan can demonstrate prejudice from plaintiff’s violations of the orders that plaintiff provide responses to the discovery propounded by Heirloom. As such, sanctions will be denied in Case No. 20CV02833.

As terminating sanctions will be ordered in Case No. 21CV04978, no other sanctions will issue.