Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_06-cv-01022/USCOURTS-casd-3_06-cv-01022-3/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1331 Fed. Question: Insurance Contract

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-1- 06cv1022-B (BLM) 

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

NEW YORK LIFE INSURANCE

COMPANY,

Plaintiff,

v.

ILDEFONSO MORALES, ALICIA A.

RUIZ de MORALES and JUAN JAVIER

LOPEZ,

Defendants.

 

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Civil No. 06cv1022-B(BLM)

ORDER GRANTING MOTION FOR

SANCTIONS

[Doc. No. 124]

Presently before the Court are (1) the Morales Defendants’

Motion for Sanctions (“Sanctions Mot.”) together with the June 3,

2008 Declaration of Barbara Richards [counsel for the Morales

Defendants] (“June 3rd Richards Decl.”), (2) the declaration of J.

Manuel Sanchez [counsel for Defendant Lopez] in Opposition to

Sanctions (“Sanchez Decl.”), and (3) the June 19, 2008 Declaration

of Barbara Richards in Response to Declaration of Manuel Sanchez

(“June 19th Richards Decl.”). Doc. Nos. 123, 124 & 128. This

briefing was filed in response to this Court’s determination that

Mr. Sanchez knowingly and intentionally failed to comply with this

Court’s December 19, 2007 Order Setting Discovery Cut-Off and

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-2- 06cv1022-B (BLM) 

Remaining Pretrial Dates and the Court’s resulting invitation to the

parties to address the appropriate type and extent of sanctions to

be imposed. See Doc. No. 121. Upon completion of the briefing, the

matter was taken under submission pursuant to Civil Local Rule

7.1(d)(1). Id.

Having reviewed the briefing submitted, and for the reasons

set forth below, the Morales Defendants’ motion is GRANTED.

BACKGROUND

This interpleader action was filed on May 10, 2006, to

determine the proper beneficiary of life insurance proceeds from a

policy on the life of Maria F. Lopez (“the decedent”). See Doc. No.

1. The policy named the decedent’s spouse, Defendant Juan Javier

Lopez, as the sole beneficiary. Id. ¶ 7. However, the decedent’s

parents, Defendants Ildefonso Morales and Alicia A. Ruiz de Morales,

claim they are entitled to the insurance proceeds as their

daughter’s heirs because Defendant Lopez was convicted by a Mexican

court of murdering their daughter. Id. ¶ 8. Defendant Lopez

remains incarcerated in Mexico as a result of this conviction. Id.

Last year, Defendant Lopez and the Morales Defendants filed

cross-motions for summary judgment. Doc. Nos. 26 & 44. On November

20, 2007, the district judge denied both motions for summary

judgment [Doc. No. 86] and, in his subsequent written order,

instructed the parties that the case would be set for a bench trial

[Doc. No. 89, issued December 10, 2008]. In the same order, the

district judge authorized additional discovery, with deadlines to be

set by this Court. Doc. No. 89.

This Court held a telephonic, attorneys-only case management

conference with attorneys Sanchez and Richards on December 3, 2007,

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-3- 06cv1022-B (BLM) 

to discuss the additional discovery the parties needed to conduct

and the requisite scheduling. See Doc. No. 87, 97. During the

conference, attorney Sanchez represented to the Court that he wanted

to take a video-deposition of his client in the Mexican prison, and

possibly depose one or two other people. However, Mr. Sanchez was

unable to provide specific information regarding how the prison

deposition would be conducted, nor how long he needed to make the

necessary arrangements. Accordingly, the Court continued the

hearing to permit Mr. Sanchez to obtain that information.

On December 10, 2007, attorney Sanchez informed attorney

Richards and the Court’s law clerk that he anticipated needing two

months to complete his client’s deposition. See Sanctions Mot. at

2. Mr. Sanchez also filed a Status Report detailing the efforts he

had expended and indicating the discovery he might pursue. Doc. No.

90. In his written report, Mr. Sanchez did not request a specific

discovery deadline. Id.

On December 19, 2007, this Court issued a new Case Management

Order, providing the parties with three additional months (more than

the two requested by Mr. Sanchez) to conduct discovery. Doc. No.

92. The scheduling order required the parties to complete discovery

by March 21, 2008 and defined “completed" as meaning that “all

discovery under Rules 30-36 of the Federal Rules of Civil Procedure,

and discovery subpoenas under Rule 45, must be initiated a

sufficient period of time in advance of the cut-off date, so that it

may be completed by the cut-off date, taking into account the times

for service, notice, and response as set forth in the Federal Rules

of Civil Procedure.” Id. (emphasis in original).

///

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1 Despite the fact that this Court had conducted numerous hearings

addressing the parties’ discovery issues and the potential difficulties

associated with deposing defendant Lopez in a Mexican prison, attorney Sanchez

never contacted the Court to request an extension of the discovery deadline due

to the difficulties he now claims he encountered. Moreover, attorney Sanchez has

not provided any letters, emails or correspondence with attorney Richards in

which he confirmed their alleged agreement. And, attorney Sanchez did not

contact this Court to request an extension of the applicable deadlines when

attorney Richards allegedly disavowed their agreement. All of these facts

support the Court’s conclusion that attorney Sanchez knowingly and intentionally

violated the Court’s discovery deadline order by deposing his client on April

14th and that the imposition of sanctions is warranted.

-4- 06cv1022-B (BLM) 

On April 8, 2008, more than two weeks after the expiration of

the second discovery period, attorney Sanchez sent attorney Richards

a letter informing her that he would conduct Defendant Lopez’

videotaped deposition on April 14, 2008. Sanchez Decl., Ex. Item 17

at 28; June 3rd Richards Decl. ¶ 3. Attorney Richards responded the

same day with a letter objecting to the deposition on the grounds

that discovery had closed. June 3rd Richards Decl., Ex. A. 

Attorney Sanchez sent a responsive letter on April 9, 2008,

expressing concern because he understood attorney Richards to have

verbally agreed on March 19, 2008 to attorney Sanchez’ proposal to

take his client’s deposition “within the next two weeks.” Sanchez

Decl., Ex. Item 18 at 30. He further stated that if attorney

Richards did not reconsider her position, he would “be forced to

file an emergent ex-parte motion with the court requesting a formal

order extending the Discovery cut-off date only as to [his] client’s

video deposition.” Id. Attorney Richards denies ever having agreed

to an extension of the March 21, 2008 discovery cut-off. June 19th

Richards Decl. ¶ 2.

Attorney Sanchez did not thereafter seek the Court’s leave to

conduct his client’s deposition after the discovery cut-off date.1

In fact, he did not complete the deposition until April 14, 2008,

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-5- 06cv1022-B (BLM) 

which was well after the two-week extension of the March 21, 2008

discovery cut-off date, to which he contends attorney Richards

informally agreed. See Sanchez Decl. at 2. 

During a status hearing on May 27, 2008, this Court found

that sanctions were appropriate for attorney Sanchez’ failure to

comply with this Court’s December 19, 2007 Order Setting Discovery

Cut-Off and Remaining Pretrial Dates. Doc. No. 121 (Order Following

Status Hearing Setting Deadlines). The Court afforded both

attorneys an opportunity to address the type and extent of sanctions

to be imposed. Id.

LEGAL STANDARD

Dates set in a scheduling order only may be modified “for

good cause and with the judge’s consent.” Fed. R. Civ. P. 16(b)(4);

Doc. No. 92 (scheduling order stating that dates may be modified for

“good cause”). If a party fails to comply with the court’s

scheduling order, the court may, on its own or on motion from a

party, impose any just sanction including those authorized by Rule

37(b)(2)(A)(ii)-(vii) of the Federal Rules of Civil Procedure. Fed.

R. Civ. P. 16(f)(1); see also Wong v. Regents of Univ. of

California, 410 F.3d 1052, 1060 (9th Cir. 2005) (confirming that

“[t]he Federal Rules of Civil Procedure explicitly authorize the

establishment of schedules and deadlines, in Rule 16(b), and the

enforcement of those schedules by the imposition of sanctions, in

Rule 16(f)”). In addition to or in lieu of other sanctions, “the

court must order the party, its attorney, or both to pay the

reasonable expenses—including attorneys fees—incurred because of any

noncompliance” unless the noncompliance was “substantially justified

or other circumstances make an award of expenses unjust.” Fed. R.

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-6- 06cv1022-B (BLM) 

Civ. P. 16(f)(2); Rodriguez v. Bimbo Bakeries, USA, Inc., 2007 WL

959027, *1-*2 (S.D. Cal. 2007) (awarding as a Rule 16(f) sanction

reasonable attorneys fees and costs incurred by opposing counsel as

a result of plaintiff’s violation of a court order). 

DISCUSSION

It is undisputed that attorney Sanchez did not conduct

Defendant Lopez’ deposition within the time frame set by this Court

for completing discovery. However, attorney Sanchez argues that he

relied, ultimately to his detriment, on an oral agreement with

opposing counsel to extend the Court’s March 21, 2008 discovery cutoff date. Sanchez Decl. at 2-3. Attorney Richards disputes that

such an agreement ever existed and attorney Sanchez has not provided

this Court with any evidence, aside from his own unsupported

declaration, establishing the existence of such an agreement.

Absent some support, and in light of the contentious relationship

between counsel, this Court has no legitimate basis for concluding

that such an agreement was made.

Even if the parties had reached such an agreement, attorney

Sanchez violated the scheduling order because he did not obtain the

Court’s consent to the alleged discovery deadline extension and

parties do not have the authority to unilaterally amend the Court’s

scheduling order. See Fed. R. Civ. P. 16(b)(4) (dates set in a

scheduling order may only be modified “for good cause and with the

judge’s consent”) (emphasis added). Here, attorney Sanchez did not

submit a joint motion or other appropriate request to the Court

seeking an extension of the discovery deadline based upon the

parties’ alleged agreement. Moreover, when he reached an impasse

with attorney Richards regarding the extension, attorney Sanchez

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2 However, as previously noted, attorney Sanchez represented to

attorney Richards and this Court’s law clerk later in the day that he anticipated

needing two months to complete his client’s deposition. 

-7- 06cv1022-B (BLM) 

informed opposing counsel that he would seek the Court’s permission

if she did not agree to the extension (Sanchez Decl., Ex. Item 18 at

30), but he failed to pursue that option. As a result, attorney

Sanchez never requested, and this Court never approved, an extension

of the March 21, 2008 discovery deadline. 

Even now, attorney Sanchez has failed to establish good cause

for his failure to depose his client prior to the March 21, 2008

deadline. In his declaration, attorney Sanchez claims he only had

three weeks — starting February 28, 2008 when the Court granted his

ex parte motion for video deposition — to make the myriad

arrangements necessary to conduct the deposition in the Mexican

prison. Sanchez Decl. at 8. He contends that this proved to be an

insufficient period of time in which to accomplish all of the

necessary tasks, despite his diligent efforts. Id. at 9. But,

attorney Sanchez’ recitation of the facts is somewhat misleading.

Attorney Sanchez made clear during the December 3, 2008 case

management conference that he wanted to depose his client, but at

that time, could not provide the Court with any information as to

how he would conduct this deposition or how long it would take to

make the necessary arrangements. The Court instructed attorney

Sanchez to investigate these issues and be prepared to provide

explanations during the conference on December 10, 2008.

Thereafter, attorney Sanchez filed a “Status Report” detailing the

steps he had taken, but the report did not set forth any specific

plan for proceeding or any estimate of the anticipated time frame.2

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3 In his declaration, attorney Sanchez explains that in the weeks after

the Court’s February 28, 2008 hearing, he engaged in the following activities to

finalize his client’s deposition: (1) making arrangements for a local court

reporter, (2) coordinating with the warden of the prison, (3) obtaining a Mexican

Court Order with the names of the individuals authorized to attend the

deposition, (4) retaining an actuario to personally serve the Mexican Court Order

on the prison warden and actually effecting this service, and (5) making

arrangements for the actuario to be present during the deposition. Sanchez Decl.

at 8. These arrangements were not contingent on how attorney Richards was going

to participate in the deposition. As a result, they could have, and should have,

been completed prior to the February 28, 2008 hearing.

-8- 06cv1022-B (BLM) 

See Doc. No. 90. The Court then gave attorney Sanchez three months

in which to complete Defendant Lopez’ deposition. Doc. No. 92. As

a result, attorney Sanchez had three months, not three weeks, to

make the necessary arrangements. 

Had attorney Sanchez been diligently preparing to depose his

client, the only arrangement left unresolved in February 2008 should

have been how attorney Richards would participate in the deposition

(via video-conference, telephonic conference, or subsequent written

questions). Once the parties agreed, and the Court ruled on

February 28, 2008, that attorney Richards did not have to

participate in the oral deposition of defendant Lopez, and could

submit written questions after her review of the deposition

videotape and transcript, attorney Sanchez should have been ready to

immediately depose his client. Under the existing scheduling order,

attorney Sanchez then had three weeks to depose his client,

utilizing the arrangements he previously should have made.3

Furthermore, to the extent there was a delay in resolving the

method by which attorney Richards could participate in defendant

Lopez’ deposition, it was in large part due to attorney Sanchez’ own

lack of diligence in determining the technological capabilities of

the prison. The Rule 16 “good cause” standard focuses on the

“reasonable diligence” of the moving party. Noyes v. Kelly

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-9- 06cv1022-B (BLM) 

Services, 488 F.3d 1163, 1174 n.6 (9th Cir. 2007); Coleman v. Quaker

Oats Company, 232 F.3d 1271, 1294 (9th Cir. 2000) (Rule 16(b)

scheduling order may be modified for “good cause” based primarily on

diligence of moving party). Diligence should not be confused with

carelessness, which offers no reason for a grant of relief. Johnson

v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992).

“If [the moving] party was not diligent, the inquiry should end.”

Id. 

Here, the Court instructed counsel to be prepared to present

facts and evidence at the February 22, 2008 hearing on Defendant

Lopez’ motion confirming that it either would or would not be

possible to conduct a video-conferenced or telephonic deposition

from the prison and, if such a deposition were possible, exactly how

it would be done (what technology would be used, who would initiate

the call, etc.). At the hearing, attorney Sanchez was not able to

provide the Court with any evidence as to whether or not the prison

had any internet or telephone capabilities, so the Court found it

necessary to continue the hearing to February 28, 2008, to allow

time for counsel to garner additional factual and legal evidence.

Doc. No. 103. Again on February 28, 2008, attorney Lopez was unable

to confirm whether or not the prison had the technology necessary

for attorney Richards to participate by video-conference or

telephone. But regardless, since the Court ultimately approved a

procedure wherein attorney Sanchez would videotape his client’s

deposition and then arrange for his client to respond to written

interrogatories prepared by attorney Richards after she viewed the

video (see Doc. No. 106), very few, if any, additional arrangements

should have been necessary to effect the deposition after the

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4 In her motion, attorney Richards argues that exclusion of the

untimely deposition is an appropriate remedy for attorney Sanchez’ violation of

this Court’s order. Sanctions Mot. at 4-5. However, the trial judge apparently

rejected this sanction when he continued the pretrial conference and directed the

parties to complete discovery. Transcript of May 14, 2008 hearing, Doc. No. 117.

Because this sanction affects trial evidence, the Court defers to the trial

judge. Attorney Richards’ alternative request was for a monetary sanction

(Sanctions Mot. at 5-6) and the Court, therefore, addresses that request only.

-10- 06cv1022-B (BLM) 

hearing and order on February 28, 2008. In other words, had

attorney Sanchez acted diligently in making all of the arrangements

for the deposition during the preceding two months and in procuring

the information the Court required regarding the prison’s internet

and telephone capabilities, he could have completed the deposition

and responded to attorney Richards’ written interrogatories within

the time frame the Court set for completing discovery. His failure

to do so demonstrates that, even if attorney Sanchez had properly

sought the Court’s leave to amend the scheduling order, he would not

have been able to demonstrate good cause for granting his request.

However, regardless of the length of the discovery period and

the difficulties experienced, if Mr. Sanchez determined he did not

have sufficient time to depose his client, the correct response was

to contact the Court, provide “good cause” supporting his request,

and request the Court to extend the discovery deadline. Fed. R.

Civ. P. 16(b)(4). Mr. Sanchez chose not to do so. Instead, Mr.

Sanchez ignored this Court’s scheduling order, declined to comply

with the Federal Rules of Civil Procedure, and deposed his client

well after the discovery deadline. As a result, he knowingly and

intentionally violated this Court’s order.

The question then, is the proper remedy for attorney Sanchez’

violation of this Court’s order.4 The Federal Rules provide that it

is appropriate for the court to order an attorney to pay as a

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5 During the pretrial conference, Judge Brewster suggested that the

parties may need to revise the pretrial filings, including the proposed pretrial

order, in light of the additional discovery pertaining to Defendant Lopez and he

also directed counsel to contact his chambers when they were ready for another

pretrial conference. Doc. 117 at 15-25 (Transcript of May 14, 2008 pretrial

conference before Judge Brewster).

-11- 06cv1022-B (BLM) 

sanction opposing counsel’s reasonable expenses, including

attorney’s fees, incurred because of the attorney’s noncompliance

with a court order. Fed. R. Civ. P. 16(f)(2); see also Martin

Family Trust v. Heco/Nostalgia Enter. Co., 186 F.R.D. 601, 604 n.4

(E.D. Cal. 1999) (quoting Matter of Baker, 744 F.2d 1438, 1442 (10th

Cir. 1984)) (under Rule 16, “[i]f the fault lies with the attorneys,

that is where the impact of sanction should be lodged”). Such an

award is mandatory “unless the noncompliance was substantially

justified or other circumstances make an award of expenses unjust.”

Id. As explained previously, the Court finds that attorney Sanchez’

failure to comply was due to his own lack of diligence, so his

noncompliance was not substantially justified. Moreover, as

explained more fully in her declaration, attorney Richards has had

to undertake significant legal work as a result of attorney Sanchez’

actions that now will have to be redone to incorporate discovery and

legal arguments related to Defendant Lopez’ deposition5 (e.g. she

prepared the Morales Defendants’ memorandum of contentions of fact

and law, reviewed Defendant Lopez’ late-filed memorandum of

contentions of fact and law, prepared a proposed pretrial order, met

and conferred regarding the proposed pretrial order, and appeared at

the pretrial conference). June 3rd Richards Decl. at 2. The Court

finds that this makes an award that compensates attorney Richards

for her efforts just. See Fed. R. Civ. P. 16 Advisory Committee

Notes (1983 Amendment) (“the court has discretion to impose

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-12- 06cv1022-B (BLM) 

whichever sanction it feels is appropriate under the

circumstances”). 

Attorney Richards requests compensatory sanctions in the

amount of $3,000, which represents twelve hours of work at her

hourly billing rate of $250. Id. Determination of whether

attorney’s fees are reasonable typically involves calculating the

number of hours reasonably expended on the litigation multiplied by

a reasonable hourly rate. Hensley v. Eckerhart, 461 U.S. 424,

433-434 (1983). “The calculation of the amount of a ‘reasonable

attorney’s fee’ is not a precise science,” Green v. Baca, 225 F.R.D.

612, 614-615 (C.D. Cal. 2005), and the Supreme Court has repeatedly

reemphasized that discretion to determine the amount of a fee award

lies with the district court, Hensley, 461 U.S. at 437. In this

case, attorney Richards explains that the twelve hours consisted of

time spent preparing a memorandum of contentions of fact and law,

reviewing Defendant Lopez’ memorandum, reviewing and comparing a

second late-filed “amended” memorandum, preparing a proposed

pretrial order, reviewing Defendant Lopez’ proposed pretrial order

and meeting and conferring about the same, responding to Defendant

Lopez’ ex parte request for extension of time for the pretrial

conference, and appearing at the pretrial conference. June 3rd

Richards Decl. ¶ 4. Given the large volume of work this entails,

the Court finds twelve hours to be a reasonable amount of time. A

billing rate of $250 per hour is reasonable for an experienced

attorney in the San Diego market, so the Court also finds attorney

Richards’ billing rate to be appropriate. Furthermore, the Court

notes that attorney Sanchez has not objected to the amount of

attorney Richards’ fee request. Therefore, the Court finds it

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-13- 06cv1022-B (BLM) 

appropriate to sanction attorney Sanchez in the amount of $3,000,

payable to attorney Richards as compensation for expenditures

stemming from attorney Sanchez’ failure to comply with the Court’s

order.

CONCLUSION

For the foregoing reasons, the Morales Defendants’ motion for

sanctions is GRANTED. Attorney Sanchez is hereby ordered to

reimburse attorney Richards in the amount of $3,000 on or before

July 17, 2008, and to file a declaration verifying said payment by

July 23, 2008. Failure to comply with this Order may result in the

imposition of additional sanctions. 

IT IS SO ORDERED.

DATED: July 2, 2008

BARBARA L. MAJOR

United States Magistrate Judge

COPY TO:

HONORABLE RUDI M. BREWSTER

UNITED STATES DISTRICT JUDGE

ALL COUNSEL AND PARTIES

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