Judge: Armen Tamzarian, Case: 20STCV49367, Date: 2023-03-22 Tentative Ruling

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Case Number: 20STCV49367    Hearing Date: March 22, 2023    Dept: 52

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

Plaintiff/cross-defendant Santos Laguna, S.A. de C.V. (Santos) moves for an order compelling the opposing parties “to produce an adequately prepared corporate representative to sit for at least seven hours of deposition testimony on” various topics.  After Santos filed this motion (and after defendant and cross-complainants opposed it), cross-complainants Fox Sports Mexico Distribution LLC and TFCF Latin American Channel LLC dismissed their only cause of action without prejudice.  The motion is therefore moot as to them.  The remaining dispute concerns defendant The Walt Disney Company’s (Disney) person(s) most qualified to testify regarding Topic Nos. 1, 7-13, 16, 17, 19, and 23. 

Code of Civil Procedure section 2025.230 provides: “If the deponent named is not a natural person, the deposition notice shall describe with reasonable particularity the matters on which examination is requested.  In that event, the deponent shall designate and produce at the deposition those of its officers, directors, managing agents, employees, or agents who are most qualified to testify on its behalf as to those matters to the extent of any information known or reasonably available to the deponent.”  (Italics added.)

Reasonably Particularized Matters of Examination

Topic Nos. 1, 7, 8, 13, 16, 17, 19, and 23 are not described with reasonable particularity.  Nos. 1, 7, 8, 13, 16, 17, and 19 all concern Disney’s “knowledge and understanding of, and actions and communications” regarding various matters.  They include but are not limited to communications between specific people or entities.  By including the phrase “knowledge and understanding of, and actions and communications,” and by not separating the topics based on the entities involved in the communications, Disney has no effective way of identifying and designating the people most qualified to testify.

Nos. 1, 16, and 17 also include several different subtopics.  No. 1 concerns the original agreement, “including the negotiation, terms, performance, modification, or termination thereof” and “the reasons for bifurcating” it.  No. 16 concerns “attempts to remove the INTERNATIONAL AGREEMENT from the FOX SPORTS MEXICO ASSETS, including the right or possibility of FSLA assigning the INTERNATIONAL AGREEMENT or WOMEN’S TEAM AGREEMENT to ESPN, or any related entity, and any COMMUNICATIONS RELATING TO same with SANTOS, or any other person or entity.”  No. 17 asks about “the negotiation, structure, terms, performance, modification, or termination thereof, as well as financial, accounting, and budgeting information” and “the reason for including FSMD and FLAC as parties to the EQUITY PURCHASE AGREEMENT, the assets to be transferred or not under the EQUITY PURCHASE AGREEMENT, and the reason(s) for transferring the FOX SPORTS MEXICO ASSETS to MDM or MSD.”  These topics are so broad that it is difficult or impossible for Disney to identify which of its agents is most qualified to testify. 

            No. 23 asks for testimony about the ‘factual basis for” numerous allegations in the cross-complaint, including specified allegations in subparts (a) through (s).  The topic is two pages long.  Even some of the subparts themselves are not reasonably particularized.  For example, (a) asks for the basis for someone to testify about the allegation “that Santos’s termination of the international agreement was ‘unjustified’ or ‘wrongful.’ ”  Those are conclusions or characterizations of events that span the entire cross-complaint.  Disney had no practical way to prepare its agents to testify about the factual basis for those allegations or about topic No. 23.

Adequately Prepared Representative(s)

Santos shows good cause to order Disney “to produce an adequately prepared corporate representative” to testify about Topic Nos. 9-12.  The provision to depose an entity’s person most qualified “is intended to simplify discovery for the party seeking information from a corporation.”  (LAOSD Asbestos Cases (2023) 87 Cal.App.5th 939, 948.)  In responding to such a deposition notice, “ ‘ “the burden is on the entity, not the examiner, to produce the right witnesses. And, if the particular officer or employee designated lacks personal knowledge of all the information sought, he or she is supposed to find out from those who do!” ’ ”  (Ibid., quoting Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2001) ¶ 8:475 (Weil & Brown) and Maldonado v. Superior Court (2002) 94 Cal.App.4th 1390, 1395-96 (Maldonado).)

 “[N]o single person is expected to be familiar with the total contents of a corporation’s files.  When a request for documents is made, however, the witness or someone in authority is expected to make an inquiry of everyone who might be holding responsive documents or everyone who knows where such documents might be held.”  (Maldonado, supra, 94 Cal.App.4th at p. 1396.)  An entity’s “duty is limited . . . to producing the most knowledgeable person currently in its employ and making sure that that person has access to information and documents reasonably available within the corporation.”  (Id. at p. 1398.)

Disney produced Juan Verges as its person most qualified on all topics.  He repeatedly testified he did little or nothing to learn about the topics.  He testified initially that he did not “speak with anyone else other than [his] lawyers to get ready, for example other people at the company.”  (Wit Decl., Ex. 18, Verges Depo., 12:10-15.)  When asked, “Did you do anything to investigate in connection with preparing for this deposition other than speaking to your lawyers whether anyone at Disney influenced Mr. Pyne’s decision making?”, he replied, “No, I didn’t.”  (Id., 105:24-106:5.)  He testified he did not investigate the issue of Disney’s participation in managing the divestment business “at all.”  (Id., 108:17-20.) 

Verges was not able to answer some relatively basic questions.  Topic No. 9 seeks to depose someone about the retention of Benjamin Pyne or Pyne Media as Hold Separate Manager, including the scope of their duties, performance, and compensation.  Verges testified, “Do you know who it was that chose Mr. Pyne for the role of Hold Separate manager?  A. No, I don't know.”  (Verges Depo., 129:12-15.)  He testified he did not know “what department or function within Disney would have made that decision.”  (Id., 129:16-19.)  He did not know if “Disney consider[ed] any other candidates for that position other than Mr. Pyne.”  (Id., 130:3-6.)  

No. 11 is an equivalent question about retaining Mazars to act as Independent Auditor and Monitoring Trustee or in any other capacity connected with the divestment proposal or the IFT resolution.  Verges testified he did not “know who selected Mazars for that role.”  (Verges Depo., 132:14-17.)  He did not “know if Disney considered anyone other than Mazars for that position.”  (Id., 132:18-23.)  He did not know “if Mazars has any other kind of relationship with Disney,” such “as a consultant, trustee, or auditor.”  (Id., 132:24-133:5.) 

Someone at Disney necessarily decided to select Pyne and Mazars for these roles.  They could not have inserted themselves on their own.  Disney had a duty to figure out who is most qualified to testify about these topics.  It designated Juan Verges, who did not know the answers and was not prepared to answer them based on information outside his personal knowledge.

With respect to Topics 10 and 12, Santos contends these topics relate to Disney’s alleged “coordination” with other entities.  Disney argues, “Santos’s gripes are largely with the merits of its case” because “there was no improper coordination.”  (Opp., pp. 11-12.)  That may be true.  But while Verges testified Disney was not involved in such improper coordination, he also testified he did nothing to investigate that.  Disney has the burden of producing its person most qualified to testify based on reasonably available information.  Even if that information shows there was no improper coordination, Disney must produce someone prepared to testify what investigation, if any, was done on the topic.  It is not enough to produce one agent who testifies he is not aware of it but did not try to figure out who might be aware.  Disney had a duty to try to find out who would be aware of these things if they happened—e.g., the people who communicated with Benjamin Pyne on other topics.  Disney was then required to produce someone to testify, for example, that those who communicated with Pyne did not attempt to influence him. 

Disney’s point about its inability to produce a witness regarding an event that did not occur has some merit.  Identifying the people most qualified to testify about something that purportedly did not happen is akin to a plaintiff’s difficulty in showing “how” and “by what means” something did not happen in an action for fraud by concealment.  (See Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384.)  Santos can circumvent this problem by first conducting discovery to identify specific witnesses at Disney with knowledge of these topics, and then taking the depositions of those witnesses.    

            A leading practice guide provides good guidance on this problem: “The entity’s duty to designate the ‘most qualified’ person to testify on its behalf may work better in theory than in practice.  [¶]  . . .  [I]f the matter involved is critical to your case, do not rely on the entity’s duty to designate the ‘most qualified’ officer or employee.  It is better practice to do your own investigation or send out interrogatories asking who in the organization has knowledge of the particular facts you seek; and take that person’s deposition.”  (Weil & Brown, supra, ¶ 8:477.) 

DISPOSITION

Plaintiff/cross-defendant Santos Laguna, S.A. de C.V.’s motion to compel further person most qualified testimony is denied as to Topic Nos. 1, 7, 8, 13, 16, 17, 19, and 23.  The motion is granted as to Topic Nos. 9-12.

Defendant The Walt Disney Company is ordered to produce its person(s) most qualified to testify regarding Topic Nos. 9-12 within 20 days.  Disney shall ensure that the deponents have access to information and documents such that they are prepared to testify on these topics.  Disney shall ensure that its designated deponents are prepared to testify about the inquiry done to find information on these topics.

IT IS SO ORDERED

Date:   March 22, 2023

________________________________________

Armen Tamzarian

JUDGE OF THE SUPERIOR COURT