Jerry's Shell v. Equilon Enterprises, LLC

36 Cal. Rptr. 3d 637, 134 Cal. App. 4th 1058, 2005 Cal. Daily Op. Serv. 10428, 2005 Daily Journal DAR 14262, 2005 Cal. App. LEXIS 1904
CourtCalifornia Court of Appeal
DecidedDecember 12, 2005
DocketB174260
StatusPublished
Cited by27 cases

This text of 36 Cal. Rptr. 3d 637 (Jerry's Shell v. Equilon Enterprises, LLC) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Jerry's Shell v. Equilon Enterprises, LLC, 36 Cal. Rptr. 3d 637, 134 Cal. App. 4th 1058, 2005 Cal. Daily Op. Serv. 10428, 2005 Daily Journal DAR 14262, 2005 Cal. App. LEXIS 1904 (Cal. Ct. App. 2005).

Opinions

Opinion

CURRY, J.

The underlying case was dismissed by the trial court as a sanction for repeated failure to respond to discovery and comply with discovery orders. Several months after terminating sanctions were issued, appellants sought to revive the litigation through a motion for relief from default or dismissal under Code of Civil Procedure section 473, subdivision (b) (section 473(b)). The court denied the motion. We conclude that dismissal was the result of an intentional strategic decision on the part of appellants’ counsel, and affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Complaint

Appellants Jerry’s Shell and 21 others1 brought suit against Equilon Enterprises, LLC, doing business as Shell Oil Products US (Equilon) and [1061]*1061certain individuals.* 2 The complaint essentially alleged that Equilon, a joint enterprise between Shell and Texaco, developed a plan to convert independent franchise dealers’ stations into company-operated stations or put them in the hands of the individual defendants, who were said to be “favored” dealers. It was alleged that Equilon gave preferential treatment to the favored dealers and made it difficult or impossible for appellants to compete through various practices, including predatory pricing, delayed payment for credit card sales, and failure to make promised station repairs and improvements. Appellants sought relief under California’s unfair business practices and franchise laws, and for breach of contract, intentional interference, and fraud.

In April 2003, a few months after the second amended complaint was filed, the court appointed a discovery referee. The charges and expenses of the referee were to be advanced by Equilon.

Equilon’s Discovery Requests

On December 6, 2002, Equilon served written discovery on appellants, including: (1) one set of 58 interrogatories directed to Jerry’s Shell, Dagher, Parungao, Ramirez, Sislian, Tinsal Enterprises, Inc., Sitara Management Corporation, HJF, Inc., Kalfayan, Buczkowski, Bisharat Enterprises, Hani and Vivian Maksimous, Ibarra, Mina’s Shell, and Coast Village, Inc.; (2) one set of 68 interrogatories directed to Abel and Merhi; (3) one set of 43 interrogatories directed to Fairview Shell Autocare, Inc.; (4) one set of 46 interrogatories directed to Marquez and Twin Oaks Corp.; (5) one set of 55 interrogatories directed at Sheibani; and (6) one set of 112 document requests directed to all appellants.3

The document requests asked for, among other things, documents relevant to: damages; the price the responding party paid Equilon for gasoline; and allegations in the complaint pertaining to agency, predatory pricing, and favored dealers. There were also requests for profit and loss statements, documents referencing profit margins, and documents relating to any attempt [1062]*1062to sell a franchise. The interrogatories asked for, among other things, specific facts that supported the allegations of the complaint, such as the allegations that Equilon engaged in predatory pricing, delayed payment for credit card sales, and failed to make station repairs. The interrogatories also asked for identification of each appellant’s marketing area, each service station located in that marketing area, and every date when every dealer paid lower or higher tank wagon prices.

First Motion to Compel Responses

On February 12, 2003, counsel for Equilon wrote to counsel for appellants inquiring about responses which by that time were “long overdue.” No reply was received.

On March 7, 2003, Equilon filed a motion to compel responses to both the interrogatories and requests for production of documents.4 No written opposition to the motion was filed on behalf of appellants. However, appellants’ counsel, Nikki Fong, took part in the telephonic hearing.

On May 8, 2003, the discovery referee granted the motion to compel and ordered appellants to serve responses to the interrogatories by June 3, 2003, to provide responses to the document requests by June 6, 2003, and to produce documents for inspection and copying by June 9, 2003. Under the order, the responses were to be “without objection.” Appellants were also ordered to pay monetary sanctions in the amount of $1,483.20.

Appellants’ Responses and Second Motion to Compel

On June 5, 2003, Fong asked permission of Equilon’s counsel to serve responses to interrogatories, which had been due on June 3, on June 6. On June 6, however, no responses were served.

A second motion to compel was filed by Equilon on June 27, 2003.5 No written opposition was filed on behalf of appellants, and this time appellants’ counsel did not appear at the hearing. The motion was granted by order dated July 30, 2003. Appellants were ordered to serve responses by August 29, 2003. The court warned that if “[appellants] do not comply with this Order, [1063]*1063the Court will be inclined to grant terminating sanctions.” An additional $2,000 in monetary sanctions was awarded.

Nine of the appellants served responses on July 24, 2003. The responses contained a general objection to providing information protected by the attorney-client privilege or work product doctrine. There was also an objection raised to an interrogatory that asked each appellant to define his, her, or its marketing area based on vagueness and ambiguousness. In addition, as to certain interrogatories, the responses stated that the answer would require the preparation of a compilation or summary from voluminous documents already produced and referred Equilon to those documents. Two or three interrogatories were unanswered. To the interrogatory seeking information on the responding party’s competitors, a multipage list of business and governmental entities and their addresses was attached. Most of the entities listed were not service stations or competitors of service stations.

By letter dated August 25, 2003, counsel for Equilon protested to Fong that the nine responding parties had “raised general objections applicable to all responses and specific objections to certain Interrogatories”; that they had “failed to provide any response ... to certain Interrogatories, and have provided incomplete responses to others”; that some of the responses were not “Plaintiff-specific” or “tailored to each individual Plaintiff”; and that the response to the interrogatory asking for identification of every competing service station “was clearly not made in good faith.”6 Equilon’s counsel received no response.

Motion for Terminating Sanctions

In September 2003, Equilon filed a motion for terminating sanctions or issue sanctions against appellants Sislian, Dagher, Ramirez, Parungao, Tinsal Enterprises, Inc., Fairview Shell Autocare, Inc., Marquez, Abel, and Merhi— the parties who had responded to the interrogatories. The ground for this motion was that the responses provided by these parties were insufficient. In particular, Equilon pointed to the objections raised, the failure to answer certain interrogatories, incomplete responses, and responses that were “generic.” The response to the interrogatory concerning competitors in particular was said to be in bad faith.

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36 Cal. Rptr. 3d 637, 134 Cal. App. 4th 1058, 2005 Cal. Daily Op. Serv. 10428, 2005 Daily Journal DAR 14262, 2005 Cal. App. LEXIS 1904, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jerrys-shell-v-equilon-enterprises-llc-calctapp-2005.