BP West Coast Products LLC v. Crossroad Petroleum, Inc. et al

Filing 687

ORDER for Monetary Sanctions re #631 Order to Show Cause. The Court hereby orders that monetary sanctions be paid by the following four defendants for failure to appear at the Mandatory Settlement Conference held on October 18 and 19, 2016: (1) NP Petroleum Corp.; (2) Payam Sahih; (3) William Kirmiz; and (4) Sahar Kirmiz. Signed by Magistrate Judge Jill L. Burkhardt on 10/13/2017.(mpl) (jao).

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1 2 3 4 5 UNITED STATES DISTRICT COURT 6 SOUTHERN DISTRICT OF CALIFORNIA 7 8 BP West Coast Products LLC, Case No.: 12cv665-JLS-JLB Lead Case Plaintiff, 9 10 v. 11 ORDER FOR MONETARY SANCTIONS Crossroad Petroleum, Inc. et al., Defendants. 12 13 14 AND RELATED CONSOLIDATED ACTIONS 15 [ECF No. 631] This matter is before the Court on a pending Order to Show Cause for failure to 16 comply with Section II.C. of Magistrate Judge Jill L. Burkhardt’s Civil Chambers Rules 17 and certain of this Court’s orders, all of which require all parties to appear in person at 18 19 20 21 22 mandatory settlement conferences. (ECF No. 631.) After careful review of the record, the facts, and the applicable law, the Court hereby ORDERS that monetary sanctions be paid by the following four defendants for failure to appear at the Mandatory Settlement Conference held on October 18 and 19, 2016: (1) NP Petroleum Corp.; (2) Payam Sahih; (3) William Kirmiz; and (4) Sahar Kirmiz.1 23 24 25 26 27 28 1 By separate order, this Court recommends terminating sanctions against the other defendants identified in the pending Order to Show Cause who also failed to appear at the Mandatory Settlement Conference held on October 18 and 19, 2016–Behzad Kianmahd, Nader Sahih, Rajesh Arora, Basel Hassounch, and Parshotam S. Kamboj. (ECF Nos. 627; 628; 631.) This order is limited to the defendants against whom monetary sanctions are appropriate–Defendants NP Petroleum Corp., Payam Sahih, William Kirmiz, and Sahar Kirmiz. 1 12cv665-JLS-JLB Lead Case 1 BACKGROUND 2 As pled in the operative Fifth Amended Complaint, Defendant NP Petroleum Corp. 3 was the operator and franchisee of the gasoline service station located at 14114 Vanowen 4 St., Van Nuys, California 91405 (Facility No. 9633); Defendant Payam Sahih (along with 5 Defendant Nader Sahih) executed a Franchise Agreement Guaranty, personally 6 guaranteeing the obligations of Defendant NP Petroleum Corp. with respect to its Franchise 7 Agreements with Plaintiff; and Defendants William Kirmiz and Sahar Kirmiz executed 8 a Franchise Agreement Guaranty, personally guaranteeing the obligations of Defendant 9 Parshotam S. Kamboj with respect to his Franchise Agreement with BPWCP. (ECF No. 10 296-3 at ¶¶42, 57, 58.) 11 District Judge Sammartino’s December 14, 2015 and May 2, 2016 orders recount 12 the “repeated discovery misconduct” of Defendants NP Petroleum Corp., Payam Sahih, 13 William Kirmiz, and Sahar Kirmiz, which resulted in the district court granting in part 14 Plaintiff’s motions for sanctions.2 (ECF Nos. 478; 498.) These defendants were among 15 the defendants referred to as “Motion 3 Defendants” who violated multiple court orders, 16 including a May 19, 2015, order granting in part Plaintiff’s motion to compel, (ECF No. 17 404); a May 28, 2015, order granting in part another of Plaintiff’s motions to compel, (ECF 18 No. 411); a June 2, 2015, order granting yet another of Plaintiff’s motions to compel, (ECF 19 No. 421); and/or a July 7, 2015, Minute Order directing the parties to meet and confer 20 regarding the Motion 3 Defendants’ non-compliance with the Court’s discovery orders, 21 (ECF No. 436).3 (ECF Nos. 448-11; 478 at 3.) The district court explicitly warned these 22 23 24 25 26 27 28 In addition to its attorneys’ fees and costs, in its motions, Plaintiff sought the terminating sanction of default judgment in Plaintiff’s favor on its Fifth Amended Complaint and dismissal of any counterclaims. (ECF Nos. 446; 447; 448.) The district court granted Plaintiff’s request for its attorneys’ fees and costs, but denied Plaintiff’s request for default and dismissal against Defendants NP Petroleum Corp., Payam Sahih, William Kirmiz, and Sahar Kirmiz (among others). (ECF No. 478.) 3 The district court labeled groups of defendants as Motion 1, Motion 2, and Motion 3 Defendants to correspond with three motions for sanctions filed by Plaintiff against three groups of defendants based on common sets of facts. As Judge Sammartino explained, “the alleged misconduct gets less severe with 2 2 12cv665-JLS-JLB Lead Case 1 defendants that failure to comply with discovery orders would result in terminating 2 sanctions. (ECF No. 478 at 16-17 (“the Court hereby GIVES NOTICE . . . that further 3 failure to comply with discovery orders or to meaningfully participate in discovery, even 4 absent an order to compel, SHALL result in entry of default judgment against them and 5 dismissal of their counterclaims pursuant to Rule 37(b)”).) 6 Magistrate Judge Jill L. Burkhardt held the first mandatory settlement conference 7 involving these defendants on June 8, 2016. Although many defendants failed to appear 8 or arrived more than an hour late, Defendants NP Petroleum Corp., Payam Sahih, William 9 Kirmiz, and Sahar Kirmiz all attended the June 8, 2016 mandatory settlement conference, 10 and thus, were not among the absent or late defendants. 4 (ECF Nos. 548; 550.) 11 Subsequently, this Court held another mandatory settlement conference on October 12 18 and October 19, 2016. (ECF No. 627; 628.) Defendants NP Petroleum Corp., Payam 13 Sahih, William Kirmiz, and Sahar Kirmiz (among others) failed to appear. 14 Accordingly, on October 21, 2016, this Court issued an Order to Show Cause in this case 15 instructing Defendants NP Petroleum Corp., Payam Sahih, William Kirmiz, and Sahar 16 Kirmiz that “on or before November 4, 2016,” they “SHALL each file a separate sworn 17 declaration informing the Court why they did not comply with Section II.C. of Magistrate 18 Judge Jill L. Burkhardt’s Civil Chambers Rules and this Court’s this Court’s orders.” (ECF 19 No. 631 (emphasis in original).) Defendants never filed a declaration (or any written 20 response) as required by the Court’s October 21, 2016 Order to Show Cause. (See ECF 21 No. 675.) Thus, this Court took the matter under submission without oral argument. (Id.)5 (Id.) 22 23 24 25 26 27 28 each motion, so that Motion 1 sets forth the most serious episodes of misconduct whereas Motion 3 details the least serious.” (ECF No. 478 at 2.) 4 Thirty-six defendants were ordered to show cause why sanctions should not issue against them because they either failed to appear or were more than an hour late to the mandatory settlement conference held on June 8, 2016. (See ECF Nos. 531; 532.) Of those thirty-six, twenty-eight received sanctions. (ECF No. 550.) 5 Defendants’ counsel was critically injured in an accident after Defendants’ November 4, 2016 deadline. (See ECF No. 657.) Due to counsel’s unavailability, the Court repeatedly continued its hearing on the 3 12cv665-JLS-JLB Lead Case 1 LEGAL STANDARD 2 “All federal courts are vested with inherent powers enabling them to manage their 3 cases and courtrooms effectively and to ensure obedience to their orders. . . . As a function 4 of this power, courts can dismiss cases in their entirety, bar witnesses, award attorney’s 5 fees and assess fines.” Aloe Vera of Am., Inc. v. United States, 376 F.3d 960, 964–65 (9th 6 Cir. 2004). “Sanctions are an appropriate response to ‘willful disobedience of a court 7 order . . . or when the losing party has acted in bad faith, vexatiously, wantonly, or for 8 oppressive reasons.’” Id. (citing Fink v. Gomez, 239 F.3d 989, 991 (9th Cir. 2001)); see 9 also Adriana Int’l Corp. v. Thoeren, 913 F.2d 1406, 1411 (9th Cir. 1990) (noting that a 10 “determination that an order was disobeyed is entitled to considerable weight” because 11 the judge issuing the order “is the best equipped to assess the circumstances of the non- 12 compliance” (quotation marks and citations omitted)). “Failure of counsel or of any party 13 to comply . . . . with any order of the court may be grounds for imposition by the court of 14 any and all sanctions authorized by statute or rule or within the inherent power of the 15 court, including, without limitation, dismissal of any actions, entry of default, finding of 16 contempt, imposition of monetary sanctions or attorneys’ fees and costs, and other lesser 17 sanctions.” CivLR 83.1.a. 18 ANALYSIS & CONCLUSION 19 Defendants NP Petroleum Corp., Payam Sahih, William Kirmiz, and Sahar Kirmiz 20 failed to appear for the court-ordered Mandatory Settlement Conference held on October 21 18-19, 2016. They have not provided any explanations for their failures to appear, much 22 less demonstrated that their failures to appear were for reasons outside their control. The 23 Court concludes monetary sanctions should issue against Defendant NP Petroleum Corp., 24 Payam Sahih, William Kirmiz, and Sahar Kirmiz as follows: 25 26 27 28 Order to Show Cause. (ECF Nos. 643; 658; 668.) However, having received no written response to the Court’s Order to Show Cause, this matter was deemed appropriate for decision without oral argument. 4 12cv665-JLS-JLB Lead Case 1 1. On or before November 10, 2017, Defendant NP Petroleum Corp. is 2 ORDERED to pay monetary sanctions in the amount of $500.00 to the Miscellaneous 3 Fines, Penalties and Forfeitures, Not Otherwise Classified, fund of the United States 4 Treasury and file a Notice of Payment in this case. See CivLR 83.1. In making its 5 determination that $500.00 is an appropriate sanction, the Court has considered 6 Defendant’s failure to appear for the court-ordered Mandatory Settlement Conference held 7 on October 18-19, 2016, its prior conduct and sanctions orders (see ECF Nos. 404; 411; 8 421; 436; 478; 498), and its failure to timely pay court-ordered monetary sanctions owed 9 to Plaintiff (see ECF Nos. 576; 652). 10 2. On or before November 10, 2017, Defendant Payam Sahih is ORDERED 11 to pay monetary sanctions in the amount of $500.00 to the Miscellaneous Fines, 12 Penalties and Forfeitures, Not Otherwise Classified, fund of the United States Treasury 13 and file a Notice of Payment in this case. See CivLR 83.1. In making its determination 14 that $500.00 is an appropriate sanction, the Court has considered Defendant’s failure to 15 appear for the court-ordered Mandatory Settlement Conference held on October 18-19, 16 2016, Defendant’s prior conduct and sanctions orders (see ECF Nos. 411; 421; 436; 478; 17 498), and Defendant’s failure to timely pay court-ordered monetary sanctions owed to 18 Plaintiff (see ECF Nos. 576; 652). 19 3. On or before November 10, 2017, Defendant William Kirmiz is 20 ORDERED to pay monetary sanctions in the amount of $400.00 to the Miscellaneous 21 Fines, Penalties and Forfeitures, Not Otherwise Classified, fund of the United States 22 Treasury and file a Notice of Payment in this case. See CivLR 83.1. In making its 23 determination that $400.00 is an appropriate sanction, the Court has considered 24 Defendant’s failure to appear for the court-ordered Mandatory Settlement Conference held 25 on October 18-19, 2016 and Defendant’s prior conduct and sanctions orders (see ECF Nos. 26 404; 411; 421; 436; 478; 498). 27 28 5 12cv665-JLS-JLB Lead Case 1 4. On or before November 10, 2017, Defendant Sahar Kirmiz is ORDERED 2 to pay monetary sanctions in the amount of $400.00 to the Miscellaneous Fines, 3 Penalties and Forfeitures, Not Otherwise Classified, fund of the United States Treasury 4 and file a Notice of Payment in this case. See CivLR 83.1. In making its determination 5 that $400.00 is an appropriate sanction, the Court has considered Defendant’s failure to 6 appear for the court-ordered Mandatory Settlement Conference held on October 18-19, 7 2016 and Defendant’s prior conduct and sanctions orders (see ECF Nos. 404; 411; 421; 8 436; 478; 498). 9 Finally, the Court hereby GIVES NOTICE to all sanctioned Defendants that future 10 failure to comply with Court orders, including failure to comply with this Order, SHALL 11 result in a recommendation from this Court that judgment be entered against them and any 12 of their counterclaims be dismissed. 13 Dated: October 13, 2017 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 12cv665-JLS-JLB Lead Case

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