Lundin vs. Goldman

The court will discharge the order to show cause for plaintiff's failure to appear at the August 6, 2026 Case Management Conference.

3. OSC re: Monetary Sanctions

The court will discharge the order to show cause for the parties’ failure to file a Joint Case Management Statement in advance of the August 6, 2026 Case Management Conference.

105 Lundin vs. Goldman Motion for Discovery Sanctions

2022-01290254 Defendants David Goldman, Melanie Goldman, and Elevate Retail Group’s Motion is GRANTED IN PART AND DENIED IN PART. Contempt

“Defendants request that Plaintiffs be found in contempt of the Stipulated Protective Order and fine each Plaintiff $1,000. See Code Civ. Proc., § 1218.” ROA 1453 at 15-16. For contempt sanctions, there must be a finding of willful disobedience, not merely the failure to obey (i.e. noncompliance with the court’s order). See Code Civ. Proc. § 2023.030(e). Further, contempt proceedings have special rules. As explained in Koshak v. Malek (2011) 200 Cal. App. 4th 1540, 1548–49, an indirect contempt proceeding is commenced by the presentation of an affidavit setting forth the alleged contemptuous acts.

Indirect contempt means that acts constituting contempt were not committed in the presence and view of the court. Reliable Enterprises, Inc. v. Superior Court (1984) 158 Cal.App.3d 604. The affidavit is in effect a complaint, frames the issues before the court and is a jurisdictional prerequisite to the court’s power to punish. Without a sufficient affidavit, any contempt order is void. In re Koehler (2010) 181 Cal.App.4th 1153, 1169. “The substantive issues involved in a contempt proceeding are (1) the rendition of a valid order, (2) actual knowledge of the order, (3) ability to comply, and (4) willful disobedience.

Conn v. Superior Court (1987) 196 Cal. App. 3d 774, 784. A contempt proceeding is commenced by the filing of an affidavit showing the facts satisfying these four requirements (the “charging allegations”). Code Civ. Proc. § 1211. To establish willful disobedience, the affidavit should show that the alleged contemnor had personal notice of the contents of the order. The order that was disobeyed must have been sufficiently specific to make it demonstrable beyond a reasonable doubt that it was disobeyed.

See Board of Supervisors v. Superior Court (1995) 33 Cal.App.4th 1724, 1737.

If the court is satisfied that the affidavit alleges sufficient grounds for contempt, it signs an “OSC re Contempt,” setting the date and time for a hearing. Code Civ. Proc. § 1212. The respondent must be formally notified of the contempt charge and of the time and place of the hearing; otherwise, the court lacks jurisdiction to proceed. For this purpose, both the OSC and affidavit ordinarily must be served on respondent in a manner authorized for service of summons. “The order to show cause acts as a summons to appear in court on a certain day and, as its name suggests, to show cause why a certain thing should not be done. ...Unless the citee has concealed himself from the court, he must be personally served with the affidavit and the order to show cause; otherwise, the court lacks jurisdiction to proceed.”

Cedars-Sinai Imaging Medical Group v. Superior Court (2000) 83 Cal.App.4th 1281, 1286-87; see also, In re Koehler, supra, 181 Cal.App.4th at 1169 (“[A] contempt citation must be served personally. Service of an order to show cause to bring a party into contempt is insufficient if made by mail on the party's attorney of record.”). If the court elects to proceed with a contempt hearing, the target will have to be advised of his Fifth Amendment rights, and the court will have to hold an evidentiary hearing.

Because of the criminal nature of contempt proceedings, the contempt must be proved beyond a reasonable doubt. Farce v. Superior Court (1983) 148 Cal. App.3d 915, 917-918. The punishment for contempt includes imprisonment, a monetary fine of up to $1,000, reasonable attorney fees and costs, and/or a monetary sanction of up to $1,500 payable to the court, as well as all the other discovery sanctions. Code Civ. Proc. §§1218(a), 1219, 177.5, and 2023.030. Defendants’ request for a contempt order is DENIED.

Defendants have not complied with the procedural requirements necessary for a contempt order, including the filing of a sufficient charging affidavit, properly seeking an order to show cause, or personally serving this motion on plaintiffs. Code Civ. Proc. §§ 1212, 2023.030(e); Farce v. Superior Court (1983) 148 Cal. App.3d 915, 917-918; Cedars-Sinai Imaging Medical Group v. Superior Court (2000) 83 Cal.App.4th 1281, 1286-87.

Injunctive Relief

“Defendants seek an injunction prohibiting further accessing of Mr. Goldman’s mailbox, which must be quarantined on LBG REC’s server or removed and preserved in its entirety.” ROA 1453 at 16. Defendants cite a single federal case which discussed the federal court’s inherent authority. Id. The court may grant an injunction pursuant to C.C.P. § 526. “To obtain a preliminary injunction, a plaintiff ordinarily is required to present evidence of the irreparable injury or interim harm that it will suffer if an injunction is not issued pending an adjudication of the merits.”

Costa Mesa City Employees' Assoc. v. City of Costa Mesa (2012) 209 Cal.App.4th 298, 305. “If the threshold requirement of irreparable injury is established, then we must examine two interrelated factors to determine whether the trial court's decision to issue a preliminary injunction should be upheld: “(1) the likelihood that the moving party will ultimately prevail on the merits and (2) the relative interim harm to the parties from issuance or nonissuance of the injunction.” Id. at 305-306. The party seeking the injunction is required to show all elements necessary to support issuing injunctive relief.

O'Connell v. Superior Court (2006) 141 Cal.App.4th 1452, 1481 (“the burden was on plaintiffs, as the parties seeking injunctive relief, to show all elements necessary to support issuance of a preliminary injunction”). Here, defendants have made no attempt to meet their burden. The request for an injunction is DENIED.

Sanctions Generally

California discovery law authorizes a range of penalties for conduct amounting to ‘misuse of the discovery process,’ ” including terminating, issue, and evidentiary sanctions. Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967, 991 (Doppes); Code Civ. Proc., § 2023.030. “In lieu of or in addition to [a terminating, issue, and/or evidentiary] sanction, the court may impose a monetary sanction....” Code Civ. Proc., § 2031.300(c). “The trial court has broad discretion in selecting discovery sanctions, subject to reversal only for abuse.”

Doppes at 992. The propriety of the sanction is determined by the totality of the circumstances, including the willfulness of the improper acts, the detriment to the propounding party, and the number of formal and informal attempts to obtain the discovery. Lang v. Hochman (2000) 77 Cal.App.4th 1225, 1244-1247 (Lang). “Discovery sanctions must be tailored in order to remedy the offending party’s discovery abuse, should not give the aggrieved party more than what it is entitled to, and should not be used to punish the offending party.”

Karlsson v. Ford Motor Co. (2006) 140 Cal.App.4th 1202, 1217 (Karlsson); Padron v. Watchtower Bible and Tract Society of New York, Inc. (2017) 16 Cal.App.5th 1246, 1260. That said, “where a violation is willful, preceded by a history of abuse, and the evidence shows that less severe sanctions would not produce compliance with the discovery rules, the trial court is justified in imposing the ultimate sanction” or other nonmonetary sanctions. Mileikowsky v. Tenet Healthsystem (2005) 128 Cal.App.4th 262, 279- 280; see Karlsson, supra,140 Cal.App.4th 1202 (evidence and issue sanctions justified based on a pattern of willful discovery abuses, including failure to obey discovery orders]; Lang at 1244-1247.

Only two facts are absolutely prerequisite to imposition of the sanction: (1) there must be a failure to comply and (2) the failure must be willful. Biles v. Exxon Mobil Corp. (2004) 124 Cal.App.4th 1315, 1327 (imposition of nonmonetary sanction such as an evidence sanction requires a willful failure to comply); Vallbona v. Springer (1996) 43 Cal.App.4th 1525, 1545 (same). Willfulness in this context means a “conscious or intentional failure to act, as distinguished from accidental or involuntary noncompliance....”

Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 787-788 (Deyo). “Lack of diligence may be deemed willful in the sense that the party understood her obligation, had the ability to comply, and failed to comply. A willful failure does not necessarily include a wrongful intention to disobey discovery rules. A conscious or intentional failure to act, as distinguished from accidental or involuntary noncompliance, is sufficient to invoke a penalty.” Deyo, at 787-788.

The Prior Sanctions Order

On 09-29-2025, the court granted defendants’ motion for sanctions related to the unauthorized access of Goldman’s computer, private Gmail account, and Dropbox account, disabled Goldman’s access to the LBG REC computer server, and removed documents from the LBG SEC server. ROA 1272. The court made the following rulings:

1. The request for terminating sanctions as to the Sixth Cause of Action in the SAC and Plaintiffs' Answer to the First and Second Causes of Action in the FACC is DENIED. The Court finds that based on the facts and evidence submitted, terminating sanctions are unwarranted.

2. The Court finds that an adverse inference is warranted, and therefore the Motion is GRANTED as to that request. Therefore, at the time of trial, the Court intends to provide a jury instruction consistent with CACI 204. However, at this time, the Court declines to determine the precise language to be used. Instead, the Court will defer that determination until the Pre-Trial Conference set for August 7, 2026.

3. The Court finds that an evidentiary sanction is warranted, and thus the Motion is GRANTED as to that request. However, the Court declines to issue the evidentiary sanction requested by the Goldman Defendants and instead will preclude Plaintiffs from using any evidence obtained through their surveillance of Goldman's LBG-owned computer. The scope of the evidentiary sanction will be determined at the Pre-Trial Conference set for August 7, 2026.

4. The Court finds that a monetary sanction is warranted, and therefore, the Court GRANTS the Motion as to that request and issues a monetary sanction of $35,571.00 against Plaintiffs. However, the Court STAYS the imposition of the sanction pending trial.

The Newly Alleged Sanctionable Acts

The Stipulation and Protective Order (the “PO”) in this case was entered 01-27-2023 and requires “Nominal Defendant LBG’s counsel [Outwater] to quarantine and to not produce all potentially attorney-client privileged communications...” ROA 57 ¶ 9. Defendants assert plaintiffs violated the PO because Lundin continued to have full administrative access over Goldman’s “lbgfunds.com” email, including the privileged documents. It is unclear what steps, if any, Outwater took to quarantine privileged communications and to what extent the parties directed it to do so. At any rate, defendants point to the following acts to demonstrate violation of the PO:

1. Supplemental Declaration of Jill Glennon (ROA 1813) Exs. G-H

The 08-05-2022 “LBG Buyout” email between Mr. Goldman and his divorce attorneys was forwarded by Lundin to Beiswenger on 08-08-2022. Critically, this was prior to the PO being entered and indeed, prior to this case being filed. Additionally, counsel for plaintiffs provides a declaration stating these documents were produced to defendants in May 2023 as a result of agreed-upon search term hits. ROA 1843 ¶ 25. This does not demonstrate violation of the protective order.

2. Goldman’s Auto-Reply Email Folder

After Goldman departed LBG REC on June 26, 2023, plaintiffs set up an auto-reply email, which notified senders that “David Goldman is no longer an LBG employee. For matters related to leasing or other LBG related matters, please contact Doug Beiswenger at dbeiswenger@lbgfunds.com or phone 949-697-9220.” ROA 1813 Ex. A. This was LBG REC’s standard practice. ROA 1833 Ex. 1 at 127:15-22; ROA 1841 ¶ 4. Any subsequent emails that were sent to Goldman’s email address were to be forwarded to a new folder in Beiswenger’s Outlook.

Id. The information technology (“IT”) person explained the folder would be populated by “NEW emails only, not historical.” Id. (emphasis in original). The IT person did not originally recall the access as so limited, but later recalled it was after being shown his email. ROA 1833 Ex. 2 at 351:4-23. Additionally, the evidence indicates the inbox did not function properly, and no privileged emails were viewed. ROA 1841 ¶¶ 5-8; ROA 1837 ¶¶ 6- 8. This does not demonstrate violation of the protective order.

3. Copy of Goldman’s Email Account

A copy of the account was created in December 2024 pursuant to Goldman’s document request for same. ROA 1843 ¶ 18 Ex. J; ROA 1813 Exs. B at 31:2-8, C at 37. The download link was uploaded to a file sharing site, but was never downloaded by anyone and expired. ROA 1833 Ex. 2 at 374:19-375:6. This does not demonstrate violation of the protective order.

4. Search for Alex MacLean Documents

On 09-07-2023, Beiswenger requested that the IT person search for emails in Goldman’s and Han’s email accounts “with a person named Alex Maclean, whose email is Alex@cra-nw.com.” ROA 1813 Ex. J. Maclean is not an attorney, but a real estate broker, so there is no obvious reason to believe such emails would be privileged. Furthermore, while it is unclear what search terms were actually used, and the IT person stated he assumed the results included communications that “referenced” Maclean, he did not run the search himself.

Reply at 8. Beiswenger said “emails with” and provided the actual email address. Id. In other words, perhaps a search was run for terms such as “Maclean,” but this does not clearly demonstrate willfulness to violate the protective order. Nonetheless, the parties were engaged in discovery and plaintiffs should have made a document request rather than exercise self-help and perform a search over the entire email account without any assurance privileged communications were, as the PO required, quarantined and thus excluded from any search results.

The court finds this search was a violation of the protective order.

Terminating Sanctions

“Defendants [] seek terminating sanctions, dismissing Plaintiffs’ Third Amended Complaint in its entirety.” ROA 1453 at 16. The trial court may order a terminating sanction for discovery abuse “after considering the totality of the circumstances: [the] conduct of the party to determine if the actions were willful; the detriment to the propounding party; and the number of formal and informal attempts to obtain the discovery.” Los Defensores, Inc. v. Gomez (2014) 223 Cal. App. 4th 377, 390. “Generally, “[a] decision to order terminating sanctions should not be made lightly.

But where a violation is willful, preceded by a history of abuse, and the evidence shows that less severe sanctions would not produce compliance with the discovery rules, the trial court is justified in imposing the ultimate sanction.” Id. “Terminating sanctions for discovery abuses are to be used sparingly because of the drastic effect of their application. Cal. Civ. Proc. Code §§ 2023.010, 2023.030.” Dep't of Forestry & Fire Prot. v. Howell (2017) 18 Cal. App. 5th 154, 191. “Thus, under the statutory scheme, trial courts should select sanctions tailored to the harm caused by the misuse of the discovery process and should not exceed what is required to protect the party harmed by the misuse of the discovery process. [Citation.]

Therefore, sanctions are generally imposed in an incremental approach, with terminating sanctions being the 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 [] lesser sanctions would be ineffective.” Id. at 191–92. Based on plaintiffs’ actions discussed above, the court finds terminating sanctions are not appropriate. Plaintiff is cautioned, however, that the court may impose terminating sanctions for any future discovery abuses.

Evidentiary Sanctions

“If the Court does not dismiss Plaintiffs’ TAC, Defendants request an evidentiary sanction prohibiting Plaintiffs from admitting any evidence or argument regarding Mr. Goldman’s divorce.” ROA 1453 at 17. “With respect to Mr. Goldman’s cross-claims, Mr. Goldman seeks an evidentiary sanction or adverse inference instruction to establish that Plaintiffs did in fact access and review all of the confidential and privileged emails in Mr. Goldman’s lbgfunds.com mailbox after Offsite granted Plaintiffs access in June 2023.”

Id. The court finds neither of these evidentiary sanctions is justified. The LBG Buyout email, which involved Goldman’s divorce attorney, occurred long before the PO was entered and before the case was filed. It was no secret Goldman had divorced his wife and defendants fail to point to any information about the divorce that plaintiffs improperly learned and/or have used in this case.

Monetary Sanctions

“Defendants seek monetary sanctions in the amount of the attorneys’ fees and eDiscovery vendor costs that Defendants incurred to perform privilege reviews of Mr. Goldman’s emails” ($53,495.25), reasonable attorneys’ fees and expert fees incurred to bring this motion” ($20,968), and request to “lift the stay on the monetary award from the Court’s prior ruling on the spoliation motion and order those sanctions due and payable in the amount of $35,571.00.” ROA 1453 at 17. The court finds monetary sanctions appropriate based on the violation of the protective order by conducting the MacLean email search.

Defendants’ request is GRANTED. Plaintiffs shall pay defendants’ reasonable attorneys’ fees and costs in the amount of $20,968. Payment in full is due to defendants no later than 20 days following notice of this order. Defendants’ request to lift the stay on the previously ordered monetary sanctions award in the amount of $35,571.00 is GRANTED. ROA 1272. Payment in full is due to defendants no later than 20 days following notice of this order. Defendants’ request for payment of fees related to the privilege review ($53,495.25) is DENIED.