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Sou v. Bash

United States District Court, D. Nevada

November 21, 2017

RAMA SOU; TAI BUI; and SCOTT ZIMMERMAN, Plaintiffs,
v.
MICHAEL BASH; JEREMY BASH; BERKLEY ENTERPRISES, INC.; PEPPERDINE ENTERPRISES, INC.; NINETY-FIVE FORT APACHE COMPLEX, LLC; and ROYAL VIEW, LLC, Defendants.

          ORDER (1) GRANTING IN PART PLAINTIFFS' MOTION FOR SANCTIONS AND (2) DENYING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT (ECF NOS. 104, 106)

          ANDREW P. GORDON UNITED STATES DISTRICT JUDGE.

         In 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.

         The 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 instant motion.

         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.

         I grant 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 fact.

         I. BACKGROUND

         This 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.

         Discovery 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.

         Jeremy 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.

         II. ANALYSIS

         Under 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).

         In 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 . . . sanction”).

         a. Risk of prejudice to the plaintiffs

         This 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 ...


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