Bear Mountain Development Company, LLC vs. State of California

34-2021-00303948-CU-BC-GDS: Bear Mountain Development Company, LLC vs. State of California 12/04/2025 Hearing on Motion for Sanctions in Department 54

Tentative Ruling

Tentative Ruling:

Defendant and Cross-Complainant State of California by and through the Department of General Services’ (DGS) motion for discovery sanctions against Cross-Defendants Joseph Giamanco, Jr., Enrico Cifelli, and DIVOC 91, LLC d/b/a River Capital Group Holdings (collectively, the “Assignee Cross-Defendants”) is UNOPPOSED and ruled upon as follows.

Procedural History

Complaint Bear Mountain Development Company, LLC (“Bear Mountain”) initially filed the complaint in this action for damages and specific performance on December 15, 2020, alleging that DGS’s termination of a Purchase Order in an emergency contract for the sale of personal protective equipment (PPE) to DGS early in the COVID-19 pandemic and subsequent refusal to accept post-termination deliveries amounted to breach of contract.

DGS demurred to the complaint for lack of standing or, in the alternative, failure to join an indispensable party based on the April 14, 2020 Assignment of Claims to River Capital Holdings, LLC. (Aug. 13, 2021 Demurrer.) The Court ruled that River Capital Holdings, LLC was an indispensable party and sustained DGS’s demurrer with leave to amend. (Dec. 28, 2021 Minute Order.) Bear Mountain filed an amended complaint but did not join River Capital. (Ibid.) Instead, it alleged that River Capital Holdings and Altieri & Associates reassigned the contract to Bear Mountain pursuant to a General Assignment executed on January 26, 2022, which the Court ruled was sufficient to survive demurrer. (Pl.’s Third Am.

Compl. filed Aug. 4, 2022, ¶ 16, Ex. 3.) Bear Mountain’s complaint was ultimately dismissed on March 1, 2024, when the Court granted DGS’s motion for summary judgment. (Mar. 1, 2024 Minute Order at 8-11.)

Cross-Complaint

DGS filed a verified cross-complaint against Bear Mountain, the Assignee Cross-Defendants, and Chad Altieri Esquire PL dba Altieri & Associates (“Altieri”) on September 7, 2022, alleging causes of action for (1) breach of contract and covenant of good faith and fair dealing, (2)

34-2021-00303948-CU-BC-GDS: Bear Mountain Development Company, LLC vs. State of California 12/04/2025 Hearing on Motion for Sanctions in Department 54

promissory estoppel, (3) fraud, (4) negligent misrepresentation, (5) restitution / unjust enrichment, and (6) declaratory relief.

Bear Mountain was the only cross-defendant who responded to the original Cross-Complaint. (Costantini Decl. ¶ 6.) Defaults were entered against the other cross-defendants, including the Assignee Cross-Defendants. (Ibid.)

On January 19, 2023, the Assignee Cross-Defendants moved to have their defaults vacated, seeking mandatory relief due to alleged attorney fault. (Ibid.) The Court denied their first motion, finding their attorneys’ declarations of fault were not sufficiently reliable to be admitted into evidence because they were not properly certified pursuant to Code of Civil Procedure section 2015.5. (Id., Ex. 15.) The Assignee Cross-Defendants then filed a second motion to vacate on the same grounds with properly certified attorney declarations. (Id. ¶ 6.) The Court granted the second motion on May 10, 2023, and the Assignee Cross-Defendants filed an Answer to the original Cross-Complaint on May 22, 2023, denying nearly all the allegations in the Cross- Complaint and asserting nine affirmative defenses. (Id., Exs. 16-17.)

The Assignee Cross-Defendants’ Answer and motions to vacate were filed by an attorney based in New Jersey, David Trombadore. Mr. Trombadore and Lawrence Luttrell, another attorney with Mr. Trombadore’s then-firm, certified the attorney fault declarations upon which the motions to vacate were based. (Costantini Decl. ¶ 7; see Exs. 15-17.) However, in November 2024, Mr. Luttrell informed DGS’s counsel that Mr. Trombadore was no longer with his firm and that his client was seeking California counsel to replace Mr.

Trombadore. (Id. ¶ 8, Ex. 18.) In response, DGS’s counsel explained that Mr. Trombadore’s status as counsel of record was an issue that “needs to be addressed promptly” and that DGS “would continue to serve [Mr. Trombadore] until new counsel is substituted in.” (Ibid.) No new counsel was ever substituted in, and Mr. Trombadore remains counsel of record for the Assignee Cross-Defendants. (Ibid.)

On May 6, 2025, DGS filed a motion for leave to file the First Amended Cross-Complaint (“FACC”). (Costantini Decl. ¶ 10.) Neither Bear Mountain nor the Assignee Cross-Defendants opposed the motion. (Ibid.) The Court granted the motion on June 2, 2025, and DGS filed the FACC on June 6, 2025. (Ibid.) The FACC did not assert any new causes of action against any of the cross-defendants but added new allegations supporting DGS’s breach and fraud claims. (Ibid.) Specifically, DGS’s new allegations in the FACC were that: (i) DGS incurred at least $43,272,607 in damages and included that amount in its Prayer (FACC ¶¶ 45, 51, 62), (ii) DIVOC-91 and other “River Capital” cross-defendants operated as a single business enterprise (Costantini Decl. ¶ 11), (iii) Bear Mountain assigned the Purchase Order to its co-defendants

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00303948-CU-BC-GDS: Bear Mountain Development Company, LLC vs. State of California 12/04/2025 Hearing on Motion for Sanctions in Department 54

(including the Assignee Cross-Defendants), who accepted the assignment and agreed to perform Bear Mountain’s obligations under the Purchase Order (Costantini Decl. ¶¶ 29, 41), and (iv) Bear Mountain’s co-defendants (including the Assignee Cross-Defendants) agreed to take part in Bear Mountain’s fraud (Costantini Decl. ¶ 61.)

DGS served the Assignee Cross-Defendants with the FACC twice: (1) via email to Mr. Trombadore on June 6, 2025 (Costantini Decl. ¶ 11), and (2) via overnight mail to both Mr. Trombadore and Mr. Luttrell on June 11, 2025 (Id., Ex. 19). To date, the Assignee Cross- Defendants have not filed any response to the FACC, nor have they ever requested a deadline extension or otherwise expressed any intent to respond to the FACC. (Id. ¶ 11.)

Discovery Order at Issue

DGS propounded its first set of discovery (Requests for Production of Documents, Set One) on the Assignee Cross-Defendants on February 10, 2025. (Heyn Decl. ¶ 2, Exs. 1-3.) By April 4, the Assignee Cross-Defendants had not responded or produced any documents, so DGS’s counsel contacted Mr. Trombadore and Mr. Luttrell for an explanation. (Id. ¶ 3.) Mr. Luttrell confirmed that he still represented the Assignee Cross-Defendants in other matters and indicated their responses to the production were forthcoming. (Ibid.) DGS agreed to allow additional time for their responses but reiterated that Mr. Trombadore will remain attorney of record until he withdraws or is substituted out, and that it “should happen soon.” (Id., Ex. 4.)

On May 14, 2025, Mr. Luttrell’s office sent the Assignee Cross-Defendants’ responses to DGS’s production requests. (Heyn Decl. ¶ 4.) DGS contends that the responses (i) included improper “General Objections,” (ii) did not contain code-compliant responses to any of the individual requests. (iii) were not properly verified by the Assignee Cross-Defendants in accordance with Code of Civil Procedure section 2015.5, and (iv) were not signed by an attorney. (Heyn Decl. at Ex. 5.) DGS contends that although the Assignee Cross-Defendants produced some documents with their responses, their document production was (i) clearly incomplete, (ii) not in the form requested, and (iii) contained improper redactions.

(On June 9, 2025, DGS filed a Motion to Compel Responses or Further Responses to Demands for Production of Documents. (Heyn Decl. ¶ 6.) The Assignee Cross-Defendants did not oppose the motion. The motion was granted on July 7, 2025. The Court’s July 7, 2025 Order provided, in pertinent part:

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00303948-CU-BC-GDS: Bear Mountain Development Company, LLC vs. State of California 12/04/2025 Hearing on Motion for Sanctions in Department 54

“On or before July 21, 2025, Cross-Defendants shall serve amended responses to each of the Requests that comply with the California Code of Civil Procedure (Code). ” (Heyn Decl. at Ex. 8, ¶ 3.)

“On or before August 7, 2025, Cross-Defendants shall supplement their production. They shall produce native files in the form requested by DGS in the Requests. There shall be no redactions. All responsive documents must be produced. Failure to produce a responsive document is cause for exclusion of the document at the trial in this matter in addition to any other appropriate sanction.” (Heyn Decl. at Ex. 8, ¶ 4, emphasis added.)

“The Court finds that Cross-Defendants’ position is not substantially justified and sanctions are appropriate. Cross-Defendants and their counsel are ordered to pay DGS attorneys’ fees of $2,500 within 30 days of the entry of this order. This order is without prejudice to further sanctions for violations of this order.” (Heyn Decl. at Ex. 8, ¶ 5.)

The Assignee Cross-Defendants failed to comply with the July 7, 2025 Order. They failed to serve amended responses or additional documents and they did not pay the $2,500 sanction. They did not ask for more time to comply. (Heyn Decl. ¶ 7.) DGS’s attempts to meet and confer regarding the Assignee Cross-Defendants’ violation of the Court’s order again failed to elicit any response. (Heyn Decl. ¶ 8.)

DGS now brings the instant motion for discovery sanctions pursuant to Code of Civil Procedure sections 2031.310 and 2031.320. (Notice, 2:20.)

DGS seeks (i) evidentiary sanctions preventing cross-defendants, or their affiliated witnesses, from presenting at trial any documents in the custody or control of the Assignee Cross- Defendants or testimony regarding those documents and (ii) terminating sanctions striking the Assignee Cross-Defendants’ Answer to the Cross-Complaint and entering their defaults.

Analysis

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00303948-CU-BC-GDS: Bear Mountain Development Company, LLC vs. State of California 12/04/2025 Hearing on Motion for Sanctions in Department 54

Pursuant to Code of Civil Procedure section 2031.310(i) and section 2031.320(c), if a party fails to obey an order compelling further response or an order compelling inspection, the court may make those orders that are just, including the imposition of an issue sanction, an evidence sanction, or a terminating sanction. In lieu of, or in addition to, that sanction, the court may impose a monetary sanction.

The Court first notes that the failure by the Assignee Cross-Defendants to answer the FACC is not at issue on this motion, nor governed by the statutes under which this motion is noticed and brought.

The Court may impose sanctions that are suitable and necessary to enable the party seeking discovery to obtain the objects of the discovery he seeks, but the Court may not impose sanctions which are designed not to accomplish the objects of the discovery but to impose punishment. (Caryl Richards, Inc. v. Superior Court (1961) 188 Cal.App.2d 300, 304.) “The penalty should be appropriate to the dereliction, and should not exceed that which is required to protect the interests of the party entitled to but denied discovery.” (Deyo v.

Kilbourne (1978) 84 Cal. App. 3d 771, 793.) In ordering terminating sanctions, the Court has broad discretion in the selection of the appropriate sanction to be applied under the factual circumstances. (Doppes v. Bentley Motors, Inc. 174 Cal. App. 4th 967, 991-992.) Terminating sanctions are to be used sparingly because of the drastic effect of their application. (Lopez v. Watchtower Bible & Tract Society of New York, Inc. (2016) 246 Cal.App.4th 566, 604.) Accordingly, sanctions are generally imposed in an incremental approach, with terminating sanctions being a last resort. (Ibid.)

However, even under the Civil Discovery Act's incremental approach, the trial court may impose terminating sanctions as a first measure in extreme cases, or where the record shows that lesser sanctions would be ineffective. (Lopez, at pp. 604-605; see Van Sickle v. Gilbert (2011) 196 Cal.App.4th 1495, 1516-1519.)

Although the Court does not condone Assignee Cross-Defendants’ failure to follow the Court’s order compelling further responses and production, the Court finds that terminating sanctions would be unnecessarily punitive in nature, and that an incremental approach would more appropriately address the facts herein. DGS’s request for terminating sanctions is DENIED.

DGS does not request further monetary sanctions.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00303948-CU-BC-GDS: Bear Mountain Development Company, LLC vs. State of California 12/04/2025 Hearing on Motion for Sanctions in Department 54

The Court now turns to DGS’s request that the Court order evidentiary sanctions preventing cross-defendants, or their affiliated witnesses, from presenting at trial any documents in the custody or control of the Assignee Cross-Defendants or testimony regarding those documents. This request is GRANTED, and the Assignee Cross-Defendants and their affiliated witnesses are barred from presenting any documents in their custody or control that should have been produced pursuant to the Court’s Order Granting Motion to Compel Responses or Further Responses to Demands for Production of Documents, filed July 7, 2025.

The minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or further notice is required.

NOTICE:

Consistent with Local Rule 1.06(B), any party requesting oral argument on any matter on this calendar must comply with the following procedure:

To request limited oral argument, on any matter on this calendar, you must call the Law and Motion Oral Argument Request Line at (916) 874-2615 by 4:00 p.m. the Court day before the hearing and advise opposing counsel. At the time of requesting oral argument, the requesting party shall leave a voice mail message: a) identifying themselves as the party requesting oral argument; b) indicating the specific matter/motion for which they are requesting oral argument; and c) confirming that it has notified the opposing party of its intention to appear and that opposing party may appear via Zoom using the Zoom link and Meeting ID indicated below. If no request for oral argument is made, the tentative ruling becomes the final order of the Court.

Unless ordered to appear in person by the Court, parties may appear remotely either telephonically or by video conference via the Zoom video/audio conference platform with notice to the Court and all other parties in accordance with Code of Civil Procedure §367.75. Although remote participation is not required, the Court will presume all parties are appearing remotely for non-evidentiary civil hearings.

The Department 54 Zoom Link is https://saccourt-ca-gov.zoomgov.com/my/sscdept53.54 and the Zoom Meeting ID is 161 4650 6749. To appear on Zoom telephonically, call (833) 568-8864 and enter the Zoom Meeting ID referenced above. NO COURTCALL APPEARANCES WILL BE ACCEPTED.

Parties requesting services of a court reporter will need to arrange for private court reporter services at their own expense, pursuant to Government code §68086 and California Rules of Court, Rule 2.956. Requirements for requesting a court reporter are listed in the Policy for

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00303948-CU-BC-GDS: Bear Mountain Development Company, LLC vs. State of California 12/04/2025 Hearing on Motion for Sanctions in Department 54

Official Reporter Pro Tempore available on the Sacramento Superior Court website at https://www.saccourt.ca.gov/court-reporters/docs/crtrp-6a.pdf. Parties may contact Court- Approved Official Reporters Pro Tempore by utilizing the list of Court Approved Official Reporters Pro Tempore available at https://www.saccourt.ca.gov/court-reporters/docs/crtrp- 13.pdf.

A Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) is required to be signed by each party, the private court reporter, and the Judge prior to the hearing, if not using a reporter from the Court’s Approved Official Reporter Pro Tempore list.

Once the form is signed it must be filed with the clerk. If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will forward the form to the Court Reporter’s Office and an official reporter will be provided.