BaronHR West Inc vs Partners Personnel – Management Services LLC

Case Number

20CV04299

Case Type

Hearing Date / Time

Fri, 01/12/2024 - 10:00

Nature of Proceedings

Motion to Dismiss; Motion to Strike

Tentative Ruling

(1) For all reasons discussed herein, the motions of Partners Personnel-Management Services, LLC are granted.

 a.        Luis E. Perez’s answer to the cross-complaint of Partners Personnel-Management Services, LLC is stricken, and default will be entered against him.

b.         BaronHR West Inc.’s complaint against Partners Personnel-Management Services, LLC is stricken. BaronHR’s answer to the cross-complaint of Partners is stricken and default will be entered against it.

Background: 

This action commenced on December 21, 2020, and arises out of alleged defamatory statements made by defendant Partners Personnel-Management Services, LLC (Partners), in a letter dated December 4, 2020 (the letter). As alleged in plaintiff BaronHR West, Inc.’s (BaronHR), complaint filed on December 21, 2020, Partners published and disseminated the letter which contained defamatory, false, misleading, and malicious statements about BaronHR. (Complaint, ¶¶ 7, 8, 10, 12, 16, 18, 19 & Exh. A.) Partners, who is a direct competitor of BaronHR, caused the letter to be written and published directly to BaronHR’s clients and business partners. (Id., ¶¶ 5, 7, 22.) As a result, BaronHR’s business reputation was damaged and its profits have been reduced. (Id., ¶¶ 14, 19.) The complaint alleges four causes of action against Partners for libel, false light, unfair business practices, and tortious interference. Partners answered the complaint on March 4, 2021, generally denying its allegations and asserting eighteen affirmative defenses.

On October 1, 2021, Partners filed a cross-complaint (the cross-complaint) alleging a single cause of action for unfair competition against BaronHR, Luis E. Perez (Perez), Fortress Worldwide, Inc. (Fortress), and various other limited liability companies and corporations. In the cross-complaint, Partners alleges that Perez is the owner and primary decision-maker of BaronHR, Fortress, and additional cross-defendants (the Perez Entities) named in the cross-complaint. Perez, BaronHR, Fortress, and the Perez Entities allegedly failed to pay payroll taxes withheld from employee and undocumented worker paychecks, manipulated W-2 documents to reduce payroll taxes, procured insurance under false pretenses, inaccurately reported worker compensation claims, created fake entities to present a façade of separateness and deceive lenders, and undertook practices described in a Second Superseding Indictment filed with the United States District Court for the Central District of California as case number SA CR 18-053(B)-CJC. (See Cross-Compl., ¶¶ 23 & Exh. A.) BaronHR, Perez, Fortress, and the Perez Entities filed an answer to the cross-complaint on November 15, 2021, generally and specifically denying its allegations and asserting thirteen affirmative defenses.

Partners filed three separate motions to compel Perez, BaronHR, and Fortress to each provide further responses to Partners’s Form Interrogatory (FI) No. 17.1. The motion to compel further responses from Perez sought to compel Perez to further respond, without objection, to Partners’s FI No. 17.1 with regard to its Requests for Admission (RFA) Nos. 1 through 15, 17 through 19, and 21 through 25 served on Perez. The motion to compel further responses from BaronHR sought to compel BaronHR to further respond, without objection, to Partners’s FI No. 17.1, with regard to its RFA Nos. 5 through 23 and 25 through 29, served on BaronHR. Partners also sought monetary sanctions against Perez, BaronHR, and Fortress.

On May 12, 2023, the court granted Partner’s motions to compel further responses to FI No. 17.1 from Perez, BaronHR, and Fortress. Each of the cross-defendants were ordered to serve code-compliant verified further responses, without objections except as to privilege, and monetary sanctions were ordered to be paid no later than June 12, 2023.

On June 8, 2023, Perez and BaronHR provided what they purport to be supplemental response to FI No. 17.1. However, the substantive response is identical to the evasive responses they gave which gave rise to the original motion to compel further responses.

Partners now moves to strike the answer of Perez, or in the Alternative, for Evidence and Issue Preclusion Sanctions, as well as to dismiss BaronHR’s Complaint and Strike its Answer to the cross-complaint, or in the Alternative, for Evidence and Issue Preclusion Sanctions.

Neither Perez nor BaronHR have filed any opposition or other response to the motions.

Analysis:

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 further responses to requests for admission, the court may order that the matters involved in the requests be deemed admitted.” (Code Civ. Proc., § 2033.290, subd. (e).)

“Although the “ ‘meet and confer’ ” requirement is an express prerequisite to moving to compel further responses to interrogatories (§ 2030.300, subd. (b)) and inspection demands (§ 2031.310, subd. (b)(2)), no such requirement appears in the statutes permitting sanctions based on a party’s violation of a court order compelling responses (§§ 2030.290, subd. (c); 2031.300, subd. (c)) or for misuse of discovery (§ 2023.040).” (Sinaiko Healthcare Consulting, Inc. v. Pacific Healthcare Consultants (2007) 148 Cal.App.4th 390, 411.)

“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.)

In this case, Partners has been unsuccessfully attempting to obtain discovery from Perez and BaronHR for several months. Perez and BaronHR have willfully refused to comply with the orders compelling code-compliant, verified further responses to FI 17.1 explaining their non-admission of RFAs, and have failed to make any attempts to explain the failure to comply. Further compounding their violation is the fact that Perez and BaronHR have failed to file any response to the present motion. This, in effect, has deprived Partners of being able to adequately prepare for trial.

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.) Given that Perez and BaronHR have repeatedly failed to properly respond to discovery, have violated the court’s orders, and simply repeated the evasive responses to FI 17.1, it is obvious that they have no intention of providing proper code-compliant responses or of complying with the court’s orders. As such, terminating sanctions are appropriate. No lesser alternatives would induce compliance.

The court may impose a terminating sanction by “[a]n order rendering a judgment by default against that party.” (Code Civ. Proc., § 2023.030, subd. (d)(4).)

Because of Perez and BaronHR’s blatant refusal to comply with the court’s prior discovery order, and even failing to provide any response to the present motion, terminating sanctions will issue. Perez’s answer to the cross-complaint of Partners will be stricken and default will be entered against him. BaronHR’s complaint against Partners will be stricken. BaronHR’s answer to the cross-complaint of Partners will be stricken and default will be entered against it.

Note: As the other Perez entities are not subjects of the current motion, the cross-complaint as against those entities remains active.