Matthew Palleschi, et al. v. Daniel Fraiman Construction, Inc. et al.

Accordingly, the hearing on Plaintiff’s motion to compel is continued to Friday, July 10, 2026, at 10:00 a.m., in Department 6. Within seven (7) days of this order, counsel for the parties are ordered to participate in a meaningful meet and confer with respect to the issues giving rise to the pending motion. Thereafter, the parties shall file a joint status report, no later than two weeks prior to the scheduled hearing, limited to five (5) pages, apprising the Court of the outcome of the meet and confer efforts and setting forth in succinct fashion each party’s position at to what discovery issues remain outstanding in relation to the pending motions. The report shall also 1

include any request for discovery sanctions by any party. To the extent that any discovery disputes remain, the parties shall file an amended separate statement at least two weeks prior to the continued hearing date.

Defendant CG West Flooring dba Artisan Hardwood Floors, Inc. Motion for an Order Compelling Plaintiffs to Answer Special Interrogatories, Set 2, and for Sanctions

On the Court’s motion, the hearing on Defendant CG West Flooring dba Artisan Hardwood Floors, Inc.’s motion for an order compelling Plaintiffs Michelle Palleschi and Matthew Palleschi to answer Special Interrogatories, Set 2, and for monetary sanctions is continued to Friday, July 10, 2026, at 10:00 a.m., in Department 6, and the parties are directed to meet and confer as specified herein.

Legal Standard

Under Code of Civil Procedure section 2030.300(a), a court may order a party to serve a further response to an interrogatory when the court finds: “(1) An answer to a particular interrogatory is evasive or incomplete[;] (2) An exercise of the option to produce documents under Section 2030.230 is unwarranted or the required specification of those documents is inadequate[; or] (3) An objection to an interrogatory is without merit or too general.”

“A meet and confer declaration in support of a motion shall state facts showing a reasonable and good faith attempt, either in person, by telephone, or by videoconference, to informally resolve each issue presented by the motion.” Code Civ. Proc. § 2016.040(a) (italics added).

Analysis

At bar, Defendant sent Plaintiffs a meet and confer letter on April 22, 2026 regarding the alleged inadequate responses. See Boardman Decl., Ex. C. The letter only requests amended responses, and makes no mention of attempting to set up further communication with Defendant’s counsel. See id. There is no evidence that Plaintiffs responded to Defendant’s meet and confer letter. In fact, Plaintiff’s counsel states, “I saw no point and did not respond to Nora’s meet and confer letter.” Negele Decl., ¶ 16.

While Mr. Negele states he held a telephone conversation with Defendant’s counsel, he does not state the efforts made to “informally resolve each issue presented by the motion” as required by Code of Civil Procedure § 2016.040(a), and the telephone call preceded Defendant’s meet and confer letter. Negele Decl., ¶ 12. On the record presented, there were no reported good faith discussions of the issues raised in Defendant’s subsequent meet and confer letter. There was no showing of a sufficient and reasonable attempt by both sides to informally resolve their dispute as required.

Failing to confer or to attempt to confer “in a reasonable and good faith attempt to resolve informally any dispute concerning discovery” is a “misuse” of the discovery process and is subject to a mandatory monetary sanction. Code Civ. Proc. §§ 2023.010(i) and 2023.020. Failing to participate in the meet and confer process is also sanctionable in the amount of $1,000.00 (after notice and an opportunity to be heard). See Code Civ. Proc. §2023.050(a)(3).

Accordingly, the hearing on Defendant’s motion to compel is continued to Friday, July 10, 2026, at 10:00 a.m., in Department 6. Within seven (7) days of this order, counsel for the parties are ordered to participate in a meaningful meet and confer with respect to the issues giving rise to the pending motion. Thereafter, the parties shall file a joint status report, no later than two weeks prior to the scheduled hearing, limited to five (5) pages, apprising the Court of the outcome of the meet and confer efforts and setting forth in succinct fashion each party’s position at to what discovery issues remain outstanding in relation to the pending motions. The report shall also include any request for discovery sanctions by any party. To the extent that any discovery disputes remain, the parties shall file an amended separate statement at least two weeks prior to the continued hearing date.

Plaintiff’s Motion for Pretrial Financial Discovery

Plaintiffs’ motion for an order permitting pretrial discovery of the financial conditions, profits, and the net worth of Defendant Daniel Fraiman Construction, a corporation, and Daniel Fraiman, an individual, to determine potential punitive damages is granted.

Legal Standard

While pretrial discovery of a defendant’s financial condition is generally not permitted, “[u]pon motion by the plaintiff supported by appropriate affidavits and after a hearing, if the court deems a hearing to be necessary, the court may at any time enter an order permitting the discovery otherwise prohibited by this subdivision if the court finds, on the basis of the supporting and opposing affidavits presented, that the plaintiff has established that there is a substantial probability that the plaintiff will prevail on the claim pursuant to Section 3294.” Civ. Code, § 3295(c) (italics added); see Jabro v. Superior Court (2002) 95 Cal.App.4th 754, 756. “Such order shall not be considered to be a determination on the merits of the claim or any defense thereto and shall not be given in evidence or referred to at the trial.” Ibid.

“[B]efore a court may enter an order permitting discovery of a defendant’s financial condition, it must (1) weigh the evidence submitted in favor of and in opposition to the motion for discovery, and (2) make a finding that it is very likely the plaintiff will prevail on his claim for punitive damages.” Jabro, 95 Cal.App.4th at 758. “In this context, a ‘substantial probability’ of prevailing on a claim for punitive damages means that it is ‘very likely’ that the plaintiff will prevail on such a claim or there is a ‘strong likelihood’ that the plaintiff will prevail on such a claim.” I-CA Enterprises, Inc. v. Palram Americas, Inc. (2015) 235 Cal.App.4th 257, 283.

Analysis

Plaintiffs argue there is a substantial probability they will prevail on their claim for punitive damages under Civil Code section 3294. On the record presented, the Court agrees.

“The elements of fraud that will give rise to a tort action for deceit are: “ ‘(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.’ ” Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974. “Fraud is an intentional tort; it is the element of fraudulent intent, or intent to deceive, that distinguishes it from 3

actionable negligent misrepresentation and from nonactionable innocent misrepresentation. It is the element of intent which makes fraud actionable, irrespective of any contractual or fiduciary duty one party might owe to the other.” City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith (1998) 68 Cal.App.4th 445, 482. “[F]raudulent intent is an issue for the trier of fact to decide.” Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1061.

Punitive damages may be imposed where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice. Civ. Code § 3294(a). As used in this section, the following definitions shall apply:

(1) "Malice" means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others. (2) "Oppression" means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights causing injury. (3) “Fraud” means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury. Civ. Code § 3294(c).

Plaintiffs argue their evidence shows Defendants fraudulently induced Plaintiffs to enter into a contract they would otherwise not have agreed to. Plaintiffs support their motion with excerpts from the Verified Second Amended Complaint (“VSAC”), as well as excerpts from the deposition of Daniel Fraiman (“Fraiman”). See 5/20/26 Pl. Mot at 2:5-4:26 (and citations therein).

Defendants argue Plaintiffs mischaracterized the testimony of Fraiman. Per Plaintiffs, the evidence they submit in opposition demonstrates that: it was Plaintiffs who requested the project proceed without finalized plans or engineering, permitting responsibilities were discussed before the contract was made, project costs and timeline changed as the scope evolved, and that the parties negotiated the Addendum to govern completion of the remaining work. See 6/1/26 Def. Op. at 4:14-22 (and citations therein). Defendants support their opposition with excerpts from the depositions of Fraiman, Plaintiff Michelle Palleschi, and Plaintiff Matthew Palleschi, as well as copies of the Original Home Improvement Contract and the Addendum Contract.

At bar, the Court has carefully reviewed the evidence presented by both parties and considered the reasonable inferences that can be drawn therefrom. The Court recognizes that there is conflicting evidence with respect to the claim for punitive damages. That said, based on the current record presented and the Court’s weighing of the evidence, the Court concludes there is a substantial probability (i.e., there is a strong likelihood) Plaintiffs will prevail on a claim for punitive damages. As such, pretrial financial condition discovery is warranted.

The Court has reviewed Plaintiff’s revised requests for discovery as to the corporation and individual Defendants set forth in Plaintiff’s reply. Pl. Reply, Ex.

1. The Court shall issue an order incorporating the provisions in Ex. 1 at 2:16-7:12 and 7:16-18.

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