United States District Court, D. Nevada
ORDER (1) GRANTING IN PART PLAINTIFFS' MOTION FOR
SANCTIONS AND (2) DENYING DEFENDANTS' MOTION FOR SUMMARY
JUDGMENT (ECF NOS. 104, 106)
P. GORDON UNITED STATES DISTRICT JUDGE.
2010, defendants Michael and Jeremy Bash pitched the
plaintiffs, Rama Sou, Tai Bui, and Scott Zimmerman, on
investing in two companies that owned property in Las Vegas:
Ninety-Five Fort Apache Complex, LLC (Fort Apache) and Royal
View, LLC (Royal View). The defendants allegedly told the
plaintiffs of their intent to develop the properties on a
certain timetable. All three plaintiffs invested in Fort
Apache, and Sou and Bui invested in Royal View, for a total
of $300, 000. The properties remain undeveloped.
plaintiffs filed suit in 2014 on claims of fraudulent
inducement, false promise, and negligent misrepresentation.
They now move for case-terminating sanctions against Michael
Bash and the corporate defendants for their failure to
complete or appear for scheduled depositions. The plaintiffs
argue that the defendants have defied court orders and
properly noticed depositions, confounding the fair resolution
of this case. They argue they are prejudiced by the
defendants' actions and that lesser sanctions will not be
effective. The plaintiffs also ask for attorneys' fees
related to the missed depositions and the drafting of the
defendants oppose the motion, arguing Bash's
non-appearance for the second half of his deposition and as
the corporate defendants' designated representative was a
result of a health issue. They argue that reopening discovery
to complete the previously scheduled depositions is the
appropriate remedy and should obviate any prejudice to the
plaintiffs. They contend the plaintiffs should not gain an
advantage in this litigation as a result of Bash's old
age and health issues. The defendants also move for summary
judgment, arguing the plaintiffs have not presented
sufficient evidence to support their claims.
the plaintiffs' motion in part. While there is some
evidence of prejudice to the plaintiffs from the
defendants' conduct during discovery, lesser sanctions
are feasible and appropriate at this time. I deny the
defendants' motion for summary judgment as it was not
timely filed and there remain genuine disputes of material
case was initially filed in the Central District of
California in October 2014. ECF No. 1. It was transferred to
this district pursuant to a forum selection clause in the
investment agreements underlying the litigation. ECF No. 28.
On November 13, 2015, the court set a discovery deadline of
March 2, 2016. ECF No. 62.
has since been extended five times, primarily to accommodate
the defendants' scheduling issues surrounding the
plaintiffs' attempts to depose them. See ECF
Nos. 69, 79, 85, 98, 102. The last extension was agreed to at
a status conference in December, where the parties informed
the court that depositions were set for February 13-16, 2017.
ECF No. 102.
Bash sat for his deposition on February 13th. ECF No. 104-6.
Michael Bash was present for an unsuccessful mediation
session the following morning, and sat for his scheduled
deposition that afternoon. ECF No. 104-8. Upon concluding for
the day, the parties agreed that Michael would continue his
individual deposition the next morning, followed by the
deposition of Michael as the corporate defendants'
designated representative that afternoon and the following
day. ECF No. 104-3. However, Michael failed to appear the
next morning because, according to his attorneys, he had gone
to the hospital. Id. The plaintiffs sought proof of
Michael's medical issues, which was not provided until
the defendants' response to this motion. The plaintiffs
also tried to reschedule the depositions, but defendants'
counsel never responded. Id. Michael Bash never sat
for the remainder of his deposition, nor was any
representative for the corporate defendants deposed. The
motion for sanctions resulted.
Federal Rule of Civil Procedure 37, the court may enter any
just orders, including any of the sanctions listed in Rule
37(b)(2)(A)(i)-(vi), if a party fails to appear for its own
properly noticed deposition. Fed.R.Civ.P. 37(d)(1)(A)(i);
id. at 37(d)(3). One of the available sanctions is
rendering a default judgment against the “disobedient
party.” Id. at 37(b)(2)(A)(vi).
determining whether such a case-terminating sanction is
appropriate, I weigh five factors: the public's interest
in expeditious resolution of litigation, the court's need
to manage its docket, the risk of prejudice to the party
seeking sanctions, the public policy favoring disposition of
cases on their merits, and the availability of less drastic
sanctions. Hyde & Drath v. Baker, 24 F.3d 1162,
1166 (9th Cir. 1994). I am not required to make explicit
findings regarding each factor, but the key factors are
prejudice and the availability of lesser sanctions.
Wanderer v. Johnston, 910 F.2d 652, 656 (9th Cir.
1990) (stating further that “[t]he first two of these
factors favor the imposition of sanctions in most cases,
while the fourth cuts against a default . . .
Risk of prejudice to the plaintiffs
factor “looks to whether the [defendants'] actions
impaired [the plaintiffs'] ability to go to trial or
threatened to interfere with the rightful decision of the
case.” U.S. ex rel. Wiltec Guam, Inc. v. Kahaluu
Const. Co., 857 F.2d 600, 604 (9th Cir. 1988). In
Hyde & Drath, the Ninth Circuit affirmed a
dismissal where the district court found that because the
plaintiffs “continually ignored scheduled depositions,
” the defendants “faced a fast approaching court
date, a lack of crucial information, and an inability to
construct a defense.” 24 F.3d at 1167; see also
Commodity Futures Trading Comm'n v. Noble Metals
Int'l, Inc., 67 F.3d 766, 771 (9th Cir. 1995)
(holding a party's ability to make its case was
prejudiced by the other party's willful refusal to comply
with a court order to designate a representative who could
testify at a discovery deposition). Thus, in Hyde &
Drath the movants' inability to depose most of the
other parties was alone sufficient to find prejudice
supporting case-ending ...