Sinaiko Healthcare Consulting, Inc. v. Pacific Healthcare Consultants

Sinaiko Healthcare Consulting, Inc. (Sinaiko) (plaintiff) engaged Bryan Kirchwehm, Zeppelin Corporation, and Pacific Healthcare Consultants (Pacific) (defendants) to provide financial advisory services to Sinaiko’s healthcare clients. Kirchwehm ended the engagement and then solicited Sinaiko’s clients using confidential information obtained through the engagement. Sinaiko sued the defendants, alleging various causes of action including breach of contract, unfair competition, and misappropriation of trade secrets. During discovery, Sinaiko served form interrogatories on the defendants that requested information related to the agreements mentioned in the pleadings. The defendants did not respond to the interrogatories by the deadline, and Sinaiko filed a motion to compel responses. The day after Sinaiko filed its motion, the defendants responded to the interrogatories with a general objection that they had filed a demurrer, which is like a motion to dismiss, and were unable to answer the interrogatories. Sinaiko continued to prosecute the motion to compel. However, the defendants did not file a response to the motion and did not attend the hearing. The trial court granted the motion and ordered the defendants to respond to the interrogatories within 20 days, but the defendants did not do so. The trial court issued monetary sanctions against the defendants for failing to comply with the order. The defendants appealed.