Judge: Joel L. Lofton, Case: 20GDCV00609, Date: 2023-04-26 Tentative Ruling
Case Number: 20GDCV00609 Hearing Date: September 14, 2023 Dept: X
Tentative Ruling
Judge Joel L. Lofton,
Department X
HEARING DATE: September 14, 2023 TRIAL DATE: April 23, 2024
CASE: LIDD ENTERPRISES
INC., DANNY LAO, BESSIE LAO, individually and as Trustees of the DANNY AND
BESSIE LAO FAMILY TRUST DATED MAY 5, 2005, v. AUTO BUYLINE SYSTEMS INC., ABS
AUTO AUCTIONS, REMARKETIMS INC., OPENTRADE INC., CLEARMARKET INC., AUCTIONLANE
INC., ABS OPEN TRADE INC., KEVIN AZZOUZ, MIKE RHEE AND LENNARD MENGWALL AND
DOES 1 through 100, inclusive.
CROSS: AUTO BUYLINE
SYSTEMS, INC. dba ABS AUTO AUCTIONS, v. LIDD ENTERPRISES INC., a California
Corporation; DANNY LAO, an individual; KEVIN AZZOUZ, an individual; MIKE RHEE,
an individual; REMARKETIMS INC., a Delaware Corporation; OPENTRADE INC., a
Delaware Corporation; CLEARMARKET INC. a Delaware Corporation; AUCTIONLANE,
INC., a Delaware Corporation; ABS OPENTRADE, INC., a Delaware corporation;
LENNART MENGWALL, an individual and ROES 1-20, inclusive.
CASE NO.: 20GDCV00609
MOTION
FOR TERMINATING SANCTIONS
MOVING PARTY: Defendant and Cross-Complainant
Auto Buyline Systems, Inc (“Cross-Complainant”)
RESPONDING PARTY: No
response filed.
SERVICE: Filed July 24, 2023
RELIEF
REQUESTED
Cross-Complainant seeks
terminating sanctions against Cross-Defendant Kevin Azzouz (“Azzouz”).
BACKGROUND
On June 15, 2021, Plaintiffs Lidd Enterprises
Inc. (“LEI”), Danny Lao (“Danny”), and Bessie Lao (“Plaintiffs”) filed a third
amended complaint on August 11, 2022, alleging elevent causes of action for (1)
breach of contract, (2) waste, (3) negligence, (4) common count, (5) breach of
oral agreement, (6) promissory estoppel, (7) conversion, (8) reformation, (9)
fraudulent conveyance, (10) fraudulent conveyance, (11) aiding and abetting.
On May 10, 2021, Cross-Complainant
Auto Buyline Systems, Inc. (“Cross-Complainant”) filed a first amended
cross-complaint against LEI, Danny, Kevin Azzouz (“Azzouz”), Mike Rhee
(“Rhee”), RemarketIMS Inc., (“RemarketIMS”), OpenTrade, Inc. (“OpenTrade”), Clearmarket
Inc., Auction Lane, Inc., ABS OpenTrade, Inc., and Lennart Mengwall, alleging
six causes of action for (1) declaratory relief, (2) breach of contract, (3)
equitable indemnity, (4) implied contractual indemnity, (5) waste, and (6)
promissory estoppel.
TENTATIVE RULING
Cross-Complainant’s
motion for terminating sanctions against Azzouz is GRANTED.
Azzouz’s
answer to Cross-Complainant’s first amended cross-complaint is ordered
stricken.
Cross-Complainant’s
requests for monetary sanctions is DENIED.
DISCUSSION
Cross-Complaint provides it served its discovery requests on various
Cross-Defendants, including Azzouz, on December 9, 2021. (Harvey Decl. ¶ 3.) Azzouz failed to provide discovery
responses. (Id. ¶ 4.) On May 17, 2022, Cross-Complaint’s motion to
compel discovery responses was granted, and Azzouz was ordered to provide
responses within 30 days. Cross-Complainant provides that Azzouz failed to
comply with the court’s order. (Id. ¶ 8.) Cross-Complainant filed a
motion for terminating sanctions against Azzouz on October 14, 2022, which was
ultimately denied. Cross-Complainant provides that on November 9, 2022, Azzouz
provided deficient discovery responses. (Id. ¶ 11.) On February 3, 2023,
Cross-Complainant filed a motion to compel further responses. (Id. ¶ 15.)
Cross-Complainant’s motion to compel further responses
was granted on April 26, 2023, and court awarded Cross-Complainants $8,598.75
in sanctions. Cross-Complainants provides it never received any discovery
responses or the ordered sanctions. (Harvey Decl. ¶ 20.) Cross-Complainant
provides that it has not heard back from Azzouz despite its efforts to contact
him. (Id. ¶ 23.)
“Section 2023.030 authorizes a trial court to
impose monetary sanctions, issue sanctions, evidence sanctions, or terminating
sanctions against ‘anyone engaging in conduct that is a misuse of the discovery
process.’ ” (Doppes v. Bentley Motors,
Inc. (2009) 174 Cal.App.4th 967, 991.) “The discovery
statutes evince an incremental approach to discovery sanctions, starting with
monetary sanctions and ending with the ultimate sanction of termination.” (Id.
at p. 992.)
Code of Civil Procedure section
2023.030, subdivision (d) provides that a court may impose terminating
sanctions by one of the following orders: “(1) An order striking out the
pleadings or parts of the pleadings of any party engaging in the misuse of the
discovery process. [¶] (2) An order
staying further proceedings by that party until an order for discovery is
obeyed. [¶] (3) An order
dismissing the action, or any part of the action, of that party. [¶] (4) An order rendering a
judgment by default against that party.”
“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. Tenent Healthsystem (2005) 128 Cal.App.4th 262, 279-280 “Mileikowsky”.)
Cross-Complainant
seeks an order striking Azzouz’s answer. Under the circumstances, terminating
sanctions are warranted. Azzouz has failed to appropriately respond to Cross-Complainant’s
discovery responses dating back to December 9, 2021. Azzouz failed to timely
comply with the court’s initial order compelling a discovery response and
failed to comply at all with the court’s order compelling further responses.
Azzouz has failed to engage in the discovery process and has failed to comply
with court orders.
CONCLUSION
Cross-Complainant’s
motion for terminating sanctions against Azzouz is GRANTED.
Azzouz’s
answer to Cross-Complainant’s first amended cross-complaint is ordered
stricken.
Cross-Complainant’s
requests for monetary sanctions is DENIED.
Moving
Party to give notice.
Dated: September 14,
2023 ___________________________________
Joel
L. Lofton
Judge
of the Superior Court