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Dhaliwal v. Singh

United States District Court, E.D. California

June 30, 2014

JAGJEEVAN K. DHALIWAL, an individual and MOHINDER S. GILL, an individual, Plaintiffs,
NIRMAL SINGH, et al., Defendants.


SHEILA K. OBERTO, Magistrate Judge.


Plaintiffs Jagjeevan K. Dhaliwal and Mohinder S. Gill ("Plaintiffs") filed this action on April 3, 2013, alleging claims against Defendants Nirmal Singh, Nachhattar S. Chandi, Susana E. Chandi, KS Chandi & Sons, Inc., Chandi Brothers, LLC, and Valley Petroleum, Inc.

On August 16, 2013, the Court dismissed all claims against each of the Defendants with the exception of a breach of contract claim against Defendant KS Chandi & Sons, Inc. ("Chandi & Sons") and an involuntary dissolution claim against Chandi & Sons and Chandi Brothers, LLC ("Chandi Brothers") (collectively, "Defendants").

On May 13, 2014, Plaintiffs filed a Motion for Sanctions to Exclude Evidence and Witnesses ("Motion to Exclude") asserting that Defendants had failed to make their initial disclosures pursuant to Federal Rule of Civil Procedure 26(a) and seeking the exclusion of any evidence Defendants may offer for any purpose. (Rule 60.) On the same day, Plaintiffs also filed a motion for summary judgment. (Doc. 54.)

Defendants filed a brief in opposition to Plaintiffs' Motion to Exclude on June 19, 2014, asserting they timely served their Rule 26(a)(1) initial disclosures on October 15, 2013.

On June 20, 2014, the district court referred Plaintiffs' Motion to Exclude to the undersigned, and the hearing on the motion was reset to July 9, 2014. On June 23, 2014, a minute order was issued indicating that any reply brief in support of Plaintiffs' Motion to Exclude was to be filed by no later than June 26, 2014. (Doc. 73.) No reply brief was filed.

On June 30, 2014, having reviewed the parties' briefs and supporting documentation, the Court determined the matter was suitable for decision without oral argument, the July 9, 2014, hearing was vacated, and the matter was taken under submission.

For the reasons set forth below, Plaintiffs' Motion to Exclude is DENIED. Plaintiffs' alternative request that Defendants be ordered to produce documents and witnesses is GRANTED IN PART. Defendants are ordered to supplement their initial disclosure statement to provide a more specific categorical breakdown of documents they intend to use to support their claims and defenses and these documents shall be produced to Plaintiffs by no later than July 15, 2014. Whether a further exclusionary sanction is warranted with respect to the documentary evidence offered by Defendants in support of their opposition to the motion for summary judgment is left for the district court's determination.


A. Factual Background[1]

1. Summary

Mr. Singh is an ARCO AM PM ("AM PM") franchisee and developer who sought investors to purchase and develop AM PM gas station/convenience stores along with his brother and sister-in-law, Mr. and Ms. Chandi ("the Chandis"). The Chandis reside in Riverside County and, with Mr. Singh, own more than 10 California AM PMs. Chandi & Sons and Chandi Brothers are California corporations principally located in Turlock, California. At relevant times, Mr. Singh was the chief financial officer ("CFO") and shareholder of Chandi Brothers, a California corporation. Plaintiffs are husband and wife and Canadian physicians who claim to have been bilked out of a $1.35 million investment in the AM PMs at issue in this action.

2. Litigation Conduct Between the Parties

On October 3, 2013, the parties appeared for a Scheduling Conference, and a Scheduling Order was issued on October 9, 2013, requiring the parties to exchange initial disclosures on or before October 15, 2013. (Doc. 38.)

Plaintiffs maintain that no initial disclosures were made by Defendants on October 15, 2013; the Plaintiffs made their disclosures. (Doc. 60-2, Durst Decl., ¶ 5.)

In January 2014, Mr. Bradford states he received a Notice of Taking Deposition and Request for Production of Documents for Nirmal Singh, which set Mr. Singh's deposition for February 6, 2014; the deposition date was continued by Plaintiffs to February 10, 2014. (Doc. 71-1, Bradford Decl., ¶ 12.) Mr. Bradford and Mr. Singh were unavailable on February 10, 2014, and advised counsel for Plaintiffs, Lee Durst, Esq., of their unavailability and served objections to the deposition notice of Mr. Singh. (Doc. 71-1, Bradford Decl., ¶ 15.)

On January 9, 2014, Mr. Durst sent a letter to Defendants' accountant Travis Salisbury ("Salisbury") demanding copies of Defendants' tax returns; a copy of the letter was not sent to Mr. Bradford, nor was Mr. Bradford notified of the request. (Doc. 71-1, Bradford Decl, ¶ 19.) Mr. Bradford informed Mr. Durst that Mr. Salisbury had no legal obligation to comply with the letter.

On April 2, 2014, Plaintiffs served Salisbury with a Subpoena to Produce Documents on April 22, 2014, to which Mr. Bradford served objections.[2] (Doc. 71-1, Bradford Decl., ¶ 22.) On that same day, Plaintiffs also served Gaby Polous ("Polous"), as custodian of records for Polous & Polous, Inc. with a Subpoena to Produce Documents, to which Mr. Bradford served objections. (Doc. 71-1, Bradford Decl., ¶ 23.) According to Mr. Bradford, no other communication regarding these subpoenas was received from Mr. Durst until an email dated April 16, 2014.

Also in April 2014, Plaintiffs began preparing to file a motion for summary judgment; in early April, Mr. Durst contacted Mr. Bradford via email indicating he had never received Defendants' initial disclosures. (Doc. 60-2, Durst Decl., ¶ 6; Exhibit A.) In this email, Mr. Durst also requested dates for Mr. Singh's deposition, as well as those for accountants Salisbury and Polous. (Doc. 60-2, Durst Decl., ¶ 7.) Mr. Durst maintains that by the time of his April 2014 email to Mr. Bradford, Defendants had already "taken four depositions of our witnesses, Kevin Doan, Pauline Doan, Harpreet Dhaliwal, and Amanda Bui, and [Mr. Durst] relating to the subject matter of this case." (Doc. 60-2, Durst Decl., ¶ 7.)

On April 27, 2014, Mr. Durst sent another letter to Mr. Bradford indicating that he would be filing a motion for partial summary judgment on behalf of Plaintiffs and would seek exclusion of evidence as a violation for failure to make initial disclosures. Mr. Durst requested a response and a copy of the disclosures by April 30, 2014. (Doc. 60-2, Durst Decl., ¶ 9; Exhibit C.)

On May 2, 2014, Mr. Durst received a letter from Mr. Bradford dated April 28, 2014, denying Defendants had failed to make initial disclosures, and refusing to provide a copy of the disclosures. (Doc. 60-2, Durst Decl., ¶ 10.) On that same day, Mr. Durst sent another letter to Mr. Bradford demanding that Defendants provide a copy of their initial disclosures by 5:00 p.m. that day. (Doc. 60-2, Durst Decl., ¶ 11.) In response to Mr. Durst's letter, Mr. Bradford provided 5 pages of documents "that are replete with errors that have been made for the first time by Defendants' counsel...." (Doc. 60-2, Durst Decl., ¶ 12.) This was the first time Mr. Durst had received Defendants' two-page initial disclosure statement, and no documents were provided. (Doc. 60-2, Durst Decl., ¶ 12.)

B. Relevant Procedural Background

On October 9, 2013, following a scheduling conference, a Scheduling Order was issued. The Scheduling Order set October 15, 2013, as the deadline for the parties to make their initial disclosures. (Doc. 38.)

On May 13, 2014, Plaintiffs filed a motion for summary judgment. (Doc. 54.) On that same date, Plaintiffs also filed a Motion to Exclude. (Doc. 60.) On June 5, 2014, Plaintiffs filed a motion to compel accountant Travis Salisbury to comply with a subpoena duces tecum issued pursuant to Rule 45. (Doc. 63.) Also on June 5, 2014, Plaintiffs filed ...

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