UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA
December 10, 2009
MISSION CAPITAL WORKS, INC., A WASHINGTON CORPORATION, PLAINTIFF,
SC RESTAURANTS, INC., RICHARD SANG; RICHIE SANG; AND BROOKES SANG, DEFENDANTS.
The opinion of the court was delivered by: Jan M. Adler U.S. Magistrate Judge
ORDER GRANTING IN PART PLAINTIFF'S MOTION FOR ORDER COMPELLING PRODUCTION OF DOCUMENTS AND WRITTEN RESPONSES TO INTERROGATORIES, WAIVING OBJECTIONS AND AWARDING SANCTIONS [Docs. 1, 3]
Plaintiff Mission Capital Works, Inc. ("Plaintiff") has filed a motion for order compelling production of documents and written responses to interrogatories, waiving objections and awarding sanctions. Defendants SC Restaurants, Inc., Richard Sang, Richie Sang, and Brookes Sang ("Defendants") did not file an opposition. For the reasons set forth below, Plaintiff's Motion is GRANTED IN PART.
On March 9, 2009, the United States District Court for the Western District of Washington entered a default judgment of $1,578,814.26 in Plaintiff's favor against Defendants. (Pl.'s Mem., Ex. 1.) Plaintiff registered the judgment in the Southern District of California on April 20, 2009 pursuant to 28 U.S.C. 1963.*fn1 Id. As of July 22, 2009, Defendants had not made any payments on the judgment. (Pl.'s Mem. at 2.) Plaintiff served each of the defendants with post-judgment interrogatories and document requests on May 27, 2009. (Id. & Exs. 8-13.) The deadline for Defendants to answer the interrogatories and respond to the document requests passed with no response. (Sampson Decl., ¶ 23.) Plaintiff's counsel sent each Defendant a meet and confer letter on July 6, 2009. (Id., ¶ 24 & Pl.'s Mem., Exs.14-16.) He received no response to the letters, filed the instant motion on July 27, 2009, and, at the Court's direction, filed and served an amended notice of motion and motion on August 17, 2009. (Sampson Decl. ¶ 25; Docs. 1, 3.) The Court subsequently requested a supplemental declaration from Plaintiff's counsel to address inquiries the Court had regarding service of documents upon Defendants. Plaintiff's counsel filed the supplemental declaration on November 24, 2009. (Doc. 6).
LEGAL STANDARDS AND DISCUSSION
1. Plaintiff has the right to conduct reasonable post-judgment discovery to aid in executing its judgment against Defendants.
In an action to aid the execution of a money judgment, a judgment creditor may take discovery "from any person-including the judgment debtor" as the Federal Rules of Civil Procedure allow "or by the procedure of the state where the court is located." Fed. R. Civ. P. 69(b). Fed. R. Civ. P. 33(a) allows a party to serve interrogatories, and Fed. R. Civ. P. 34(a) allows a party to serve document requests. California law also allows a judgment creditor to propound written interrogatories and document requests upon a judgment debtor "to aid in enforcement of the money judgment." Cal. Code Civ. Proc. §§ 708.020, 708.030. The judgment creditor "is entitled to a very thorough examination of the judgment debtor." Credit Lyonnais, S.A. v. SGC Intern., Inc., 160 F.3d 428, 430 (8th Cir. 1998) (quoting Caisson Corp v. County West Bldg. Corp., 62 F.R.D. 331, 335 (E.D. Pa. 1974)). "[T]he presumption should be in favor of full discovery of any matters arguably related to [the judgment creditor's] efforts to trace [the judgment debtor's] assets and otherwise to enforce its judgment." Credit Lyonnais, 160 F.3d at Exs. 3, 6, & 9 at 4-7.) The Court finds that the information Plaintiff seeks is related to its efforts to trace the defendants' assets and otherwise to enforce its judgment, and thus that its discovery is appropriate. See, e.g., Credit Lyonnaise, 160 F.3d at 431.
Here, among the information the interrogatories seek is information regarding real and personal property the individual Defendants own, Defendants' employment over the last ten years, other sources of income during the last ten years, and "all intellectual property rights," securities, insurance, memberships, and accounts receivable that Defendants hold. (Pl.'s Mem., Exs. 2, 5, & 8 at 3-4, 6-8.) Among the documents Plaintiff seeks are trusts, stock certificates, real property deeds, "inventor[ies] of personal property," "statements from all financial institutions," "savings account information," all 1099 and W-2 forms for the past five years, and corporate or partnership records that indicate money "to be paid to" each defendant "for... services."
2. Service was adequate as to each of the individual defendants but not as to Defendant SC Restaurants, Inc.
The Court previously observed that Defendants' addresses as set forth on the May 27, 2009 proofs of service, the July 6, 2009 meet and confer letters, and the July 22, 2009 and August 17, 2009 proofs of service contained various inconsistencies. In his supplemental declaration, Plaintiff's counsel explained that he obtained the addresses on the proofs of service dated May 27, 2009, which accompanied the interrogatories and document requests from Plaintiff's Washington counsel, who represented that the addresses were current as to each Defendant as of May 2009. (Sampson Supp. Decl., ¶ 4.) Plaintiff's counsel states that the interrogatories and document requests were not returned to him and thus he assumes each Defendant received them. (Id., ¶ 5.)
After his retention to assist Plaintiff in the enforcement of the Washington judgment, Plaintiff's counsel hired an investigator to find Defendants and their potential assets and liabilities. (Id., ¶ 7.) He also commenced an internal public records search to obtain additional information regarding each Defendant. (Id.) These various investigations yielded the addresses set forth on the July 6, 2009 meet and confer letters and, according to Plaintiff's counsel, constitute the last known address of each individual defendant. (Id., ¶ 8.) The declaration also indicates the letters were not returned. (Id.) The addresses on the meet and confer letters for each individual defendant are identical to the addresses on the proofs of service for the instant motion and amended notice of motion. Thus, the Court concludes that service upon each of the individual defendants complied with Fed R. Civ. P. 5, which requires documents that are served by mail to be sent to a person's last known address. See Fed. R. Civ. P. 5(b)(2)(C). With respect to Defendant SC Restaurants, Inc., however, the declaration establishes the inability of Plaintiff's counsel to find its current address, and indicates that mail sent to its last known address was returned. (Sampson Supp. Decl., ¶ 9.) Thus, Plaintiff's counsel acknowledges that "the motion should proceed [only] against the individual defendants," not SC Restaurants, Inc. (Id.) Plaintiff's motion is accordingly DENIED as to SC Restaurants, Inc.
3. The individual defendants have waived all objections to the discovery served.
As part of its motion, Plaintiff asks the Court to waive any objections Defendants may assert to the interrogatories and document requests. "It is well established that a failure to object to discovery requests within the time frame required constitutes a waiver of any objection." Richmark Corp. v. Timber Falling Consultants, 959 F.2d 1468, 1473 (9th Cir. 1992) (citing Davis v. Fendler, 650 F.2d 1154, 1160 (9th Cir. 1981)). See also Cal. Code Civ. Proc. §§ 2030.290(a) and 2031.300(a) (providing that the failure of a party to serve a timely response to interrogatories or document requests "waives any objection to the [discovery], including one based on privilege or on the protection for work product..."). The Court accordingly finds that the individual defendants have waived all objections to the interrogatories and document requests through their complete failure to respond.
4. Plaintiff's request for sanctions
Plaintiff seeks an award of sanctions resulting from the individual defendants' failure to provide any response to Plaintiff's discovery requests. (Pl.'s Mem. at 4.) Fed R. Civ. P. 37(d)(1)(ii) provides, "[T]he court where the action is pending may, on motion, order sanctions if:...a party, after being properly served with interrogatories under Rule 33 or a request for inspection under Rule 34, fails to serve its answers, objections, or written response." "[T]he court must require the party failing to act...to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the failure was substantially justified or other circumstances make an award of expenses unjust." Fed. R. Civ. P. 37(d)(3). See also Fed. R. Civ. P. 37(a)(5)(A) (If the court grants a motion to compel, unless certain exceptions apply, "[t]he court must, after giving an opportunity to be heard, require the party or deponent whose conduct necessitated the motion...to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees.").
The Eastern District of California recently considered whether to sanction defendants for failing to answer the plaintiff's post-judgment interrogatories and production requests. Wordtech Systems, Inc. v. Integrated Network Solutions, Inc., 2009 WL 3126409 *1, *3 (E.D. Cal. Sept. 24, 2009). There, as in this case, the defendants totally failed to respond to interrogatories and production requests. Id. The court determined that the defendants' change of counsel did not substantially justify the complete failure to respond to the interrogatories and production requests when the plaintiff had properly served counsel of record at the time of service, and awarded attorney's fees as a discovery sanction for failure to respond to the discovery requests.
The defendants in Wordtech at least provided some reason, albeit an insufficient reason, to attempt to substantially justify not responding to the post-judgment interrogatories or document requests. Id. In this case, the individual defendants have provided no explanation for their failure to respond to Plaintiff's discovery. The Court concludes that no substantial justification or other circumstances exist that would render sanctions unjust.
Plaintiff seeks an award of $1,440.00*fn2 in attorney's fees for 3.6 hours of attorney time at $400 per hour. Plaintiff estimated that.9 hours would be spent attending a hearing on this motion. The Court, however, did not hold a hearing on this motion. The remaining 2.7 hours sought by Plaintiff are reasonable. The Court accordingly awards $1,080.00 of attorney's fees to Plaintiff.
For the reasons set forth above, Plaintiff's motion for an order compelling production of documents and written responses to interrogatories, waiving objections and awarding sanctions is GRANTED IN PART. Defendants Richard Sang, Richie Sang, and Brookes Sang shall respond to Plaintiff's discovery requests without objection within thirty (30) days of the date of this order.*fn3 These defendants shall also pay the sum of $1080.00 directly to Plaintiff's counsel within thirty (30) days. The motion DENIED as to Defendant SC Restaurants, Inc.
The Clerk shall close the court file.
IT IS SO ORDERED.