Judge: David B. Gelfound, Case: 23CHCV01757, Date: 2024-11-13 Tentative Ruling

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Case Number: 23CHCV01757    Hearing Date: November 13, 2024    Dept: F49

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F49

MOTION TO COMPEL LARRY LARSON TO APPEAR FOR DEPOSITION AND TO PRODUCE DOCUMENTS, REQUEST FOR SANCTIONS

Motion filed: 9/23/24

MOVING PARTY: Defendants Guenther Ventures LLC d/b/a Neon Retro Arcade, Mark Guenther, and Mia Mazadiego

RESPONDING PARTY: Plaintiffs Carol Demirjian and Steve Demirjian, and Larry Larson, respectively

NOTICE: OK.

RELIEF REQUESTED: An order from this Court to compel Larry Larson to attend and testify at deposition, as well as to produce for inspection any documents demanded by the Deposition Subpoena, and to impose monetary sanctions against Larry Larson in the amount of $2,397.50.

TENTATIVE RULING: The motion is DENIED. The requests for monetary sanctions are DENIED.

BACKGROUND

This action arises from an alleged breach of a commercial lease agreement and corresponding guaranty.

On June 15, 2023, Plaintiffs Carol Demirjian and Steve Demirjian (collectively, “Plaintiffs”) filed a Complaint against Defendants Guenther Ventures LLC d/b/a Neon Retro Arcade (“Guenther Ventures”), Mark Guenther (“Guenther”), Mia Mazadiego (“Mazadiego”), and Does 1 through 100, alleging two causes of action: (1) Breach of Contract against Guenther Ventures, and (2) Breach of Guaranty against all Defendants. Plaintiffs allege that they and Guenther Ventures entered into a commercial lease for property located at 8943 Reseda Boulevard, Northridge, CA 91324 (the “Premises”), which Guenther Ventures breached by failing to make rent payments and causing damages to the Premises. (Compl. ¶¶ 8, 10.) Defendants filed their Answer to the Complaint on July 11, 2023.    

On September 23, 2024, Defendants filed the instant Motion to Compel Deposition of Larry Larson (“Larson”) (the “Motion”). Subsequently, Plaintiffs and Larson filed their respective Oppositions to the Motion on October 29, and 30, 2024.

On November 5, 2024, Defendants submitted their Reply.

ANALYSIS

A party seeking discovery from a person who is not a party to the action may obtain discovery by oral deposition, written deposition, or deposition subpoena for production of business records.¿ (Code Civ. Proc., § 2020.010.)¿ A deposition subpoena may command: (1) only the attendance and testimony of the deponent, (2) only the production of business records for copying, or (3) the attendance and testimony of the deponent, as well as the production of business records, other documents, electronically stored information, and tangible things.¿ (Code Civ. Proc., § 2020.020.)¿ 

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A service of a deposition subpoena shall be effected a sufficient time in advance of the deposition to provide the deponent a reasonable opportunity to locate and produce any designated documents and, where personal attendance is commanded, a reasonable time to travel to the place of deposition.¿ (Code Civ. Proc., § 2020.220, subd. (a).)¿

Personal service of any deposition subpoena is effective to require a deponent who is a resident of California to: personally appear and testify, if the subpoena so specifies; to produce any specified documents; and to appear at a court session if the subpoena so specifies.¿ (Code Civ. Proc., § 2020.220, subd. (c).)¿ A deponent who disobeys a deposition subpoena may be punished for contempt without the necessity of a prior order of the court directing compliance by the witness.¿ (Code Civ. Proc., § 2020.240.)¿ 

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A “written notice and all moving papers supporting a motion to compel an answer to a deposition question or to compel production of a document or tangible thing from a nonparty deponent must be personally served on the nonparty deponent unless the nonparty deponent agrees to accept service by mail¿or electronic service¿at an address¿or electronic service address¿specified on the deposition record.”¿ (Cal. Rules of Court, Rule 3.1346.)¿ 

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A.    Motion to Compel Deposition

Defendants bring the Motion under Code of Civil Procedure section 2025.280, asserting that Larson acted as Plaintiffs’ managing agent. Alternatively, Defendants argue that, even if Larson is not a managing agent of Plaintiffs, he should still be compelled to attend the deposition under Code of Civil Procedure section 1987.1, contending that Larson has evaded personal service of the Deposition Subpoena.

The Court proceeds to examine each of these grounds in turn.

1)      Larson as Plaintiffs’ Managing Agent

Code of Civil Procedure section 2025.280 provides, in part, “The service of a deposition notice under Section 2025.240 is effective to require any deponent who is a party to the action or ... [a] managing agent ... of a party to attend and to testify, as well as to produce any document, electronically stored information, or tangible thing for inspection and copying.” (Code Civ. Proc., § 2025.280, subd. (a).)

To determine whether a particular deponent is managing agent of one of the parties, and thus is a party-affiliated deponent for which deposition subpoena is not required, state courts look to federal court decisions that apply a similar managing agent test. (Lopez v. Watchtower Bible & Tract Society of New York, Inc. (2016) 246 Cal.App.4th 566, 601 (Lopez).) “[A] ‘managing agent’ need not also be an employee, officer, or director.... This conclusion is consistent with analysis by federal courts, which have recognized that a third party (such as an independent contractor or former officer) may be deemed a party's ‘managing agent’ upon a factual showing that the deponent currently serves in that functional role.” (Ibid., citing United States v. Afram Lines, Ltd. (1994) 159 F.R.D. 408, 413.) (Underlines added.)

            In Waters v. Superior Court of Los Angeles County (1962) 58 Cal.2d 885(Waters), the California Supreme Court summarized a three-factor test to determine whether a particular deponent is a “managing agent” of one of the parties: (1) does the person exercise judgment and discretion in dealing with the party's matters; (2) can the person be expected to comply with the party's directive to appear; and (3) can the person be anticipated to identify himself or herself with the party's interests. (Id. at p. 896.)

            Here, Defendants argue that Larson acted as Plaintiffs’ managing agent because he served as Plaintiffs’ real estate broker and attorney, (Mot. at pp. 4-5), exercised judgment and discretion over listing the Premises and vetting prospective clients, (Reply at p. 2), and was subject to Plaintiffs’ practical influence. (Id. at p. 3.)

            In response, Plaintiffs contend that they engaged Larson in 2021, long before this lawsuit, to act as their attorney in writing letters to Defendants, and later retained Larson to act as their real estate broker to market the Premises for lease after Defendants prematurely vacated the Premises. (Steve Demirjian Decl. ¶ 2.) Plaintiffs assert, however, that Larson was not and has never been their employee; instead, he served as an independent contractor specifically for listing one of their properties. (Ibid.) Additionally, Larson does not manage Plaintiffs’ rental properties or any other type of business. (Ibid, Larson Decl. ¶ 4.) Furthermore, Plaintiffs’ counsel, Aren Kavcioglu (“Kavcioglu”) objected to the Notice of Deposition and informed Defendants that Larson was not an employee or managing agent of Plaintiffs. (Kavcioglu Decl. ¶¶ 4-5.)

            Based on the records above, the Court finds insufficient evidence to establish that Larson is Plaintiffs’ managing agent. First, there is no factual showing that, aside from the 2021 transaction, Larson currently holds any functional role for Plaintiffs. (Lopez, supra, 246 Cal.App.4th at p. 601.) Second, even assuming Larson continues to act as Plaintiffs’ independent contract, there is no evidence that he can be expected to comply with Plaintiff’s directive to appear at the deposition. Third, while Larson may have assisted Plaintiffs as a broker in marketing the property and as an attorney in prior communications, Defendants have not demonstrated that Larson currently holds an alignment or interest sufficiently strong to identify him with Plaintiffs in this litigation. Courts have recognized that the managing agent designation requires a level of loyalty or affiliation suggesting that the deponent will advocate for or act in the party’s interest. (See Waters, supra, 58 Cal.2d at p. 896.) Since Defendants have not shown any current or ongoing relationship beyond prior transactional roles, the Court finds that Larson’s interests in this matter are too attenuated to meet the managing agent standard.

Accordingly, the Court DENIES the Motion on this basis.

2)      Larson as a Non-party

Except for the deposition of a party's officers, directors, managing agent, and employees – which may be taken on simple notice (see Code Civ. Proc., §§ 2025.280, subd. (a), 2025.240) – discovery from a nonparty may be obtained only by “deposition subpoena” (Code Civ. Proc., § 2020.010, subd. (b).) (Unzipped Apparel, LLC v. Bader (2007) 156 Cal.App.4th 123, 130.) (Italics in original.)

Here, since the Court finds insufficient evidence to establish that Larson qualifies as a managing agent, he must be treated as a non-party for discovery purposes. Accordingly, any deposition of Larson requires a properly served deposition subpoena rather than simple notice. Without managing agent status, Larson’s non-party designation is determinative of the method by which Defendants may seek discovery from him.

Defendants argue, in the alternative, that Larson should be compelled to attend the deposition and produce documents under Code of Civil Procedure section 1987.1.

Code of Civil Procedure section 1987.1 states, in relevant part, “If a subpoena requires the attendance of a witness or the production of books, documents, electronically stored information, or other things before a court, or at the trial of an issue therein, or at the taking of a deposition, the court, upon motion reasonably made by any person described in subdivision (b), or upon the court’s own motion after giving counsel notice and an opportunity to be heard, may make an order quashing the subpoena entirely, modifying it, or directing compliance with it upon those terms or conditions as the court shall declare, including protective orders. In addition, the court may make any other order as may be appropriate to protect the person from unreasonable or oppressive demands, including unreasonable violations of the right of privacy of the person.” (Code Civ. Proc., § 1987.1, subd. (a).) (Underlines added.)

The Court notes that Code of Civil Procedure section 1987.1 permits the Court to enforce a subpoena if it has been validly issued and served. However, Defendants have failed to demonstrate that a Deposition Subpoena was served on Larson. Rather, it is undisputed that only a Notice of Deposition, dated September 3, 2024, was served upon Plaintiffs’ counsel – not non-party Larson. (Green Decl. ¶ 7, Ex. “4;” Larson Decl. ¶¶ 5-6.)

Given that Larson was not personally served with a Deposition Subpoena, the Court finds that Code of Civil Procedure section 1987.1 does not apply in these circumstances.

As to Defendants’ claim that Larson evaded personal service, the Court finds this assertion is not supported by sufficient evidence.

Defendants present a copy of email correspondence from USA Legal Inc. detailing its attempts to personally serve Larson with the Deposition Subpoena. The email indicates that attempts were made on July 3, 5, 8, and 9, 2024. The correspondence notes that on each occasion, “The door is locked.” (Green Decl. Ex. “2.”) Notably, on July 9, 2024, the notes state, “no access to door no car in the parking lot. Verified by security ... defendant is not in...” (Ibid.)

In contrast, Larson attests that “[d]uring the period between July 3, 2024 and July 9, 2024, I was not in Los Angeles. I was in my residence in Las Vegas, Nevada. I was not evading personal service.... I was present in Los Angeles in August 2024 and September 2024, and I am not aware of any attempt to personally serve me with a deposition subpoena in August or September 2024.” (Larson Decl. ¶ 5.) Furthermore, Larson declares that “Even though I have never been personally served with a deposition subpoena in this case, I informed Noah Green that I was in Washington, and offered to have my deposition taken when I returned, likely the beginning of 2025[.]” (Id. ¶ 6, Ex. “1.”)

            Accordingly, the Court finds insufficient evidence to support Defendants’ claim that Larson evaded the personal service. Given that the timing of service attempts occurred around the July 4th holiday, it suggests the attempts may have failed due to Larson’s office closure, as noted by the service provider. Combined with Larson’s declaration offering to schedule the deposition upon his return from Washington, the Court concludes that Defendants have not shown sufficient evidence of evasion.

            Based on the above, the Court finds that Defendants failed to personally serve non-party Larson with the Deposition Subpoena, as mandated by Code of Civil Procedure sections 2020.210 and 2020.220.

Therefore, the Court DENIES the Motion on this ground. 

B.     Monetary Sanctions

Defendants seek monetary sanctions against Larson in the amount of $2,397.50.

Under Code of Civil Procedure section 2025.450, subdivision (g), “If a motion under subdivision (a) is granted, the court shall impose monetary sanction ... in favor of the party who noticed the deponent and against deponent or the party with whom the deponent is affiliated, unless the court finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.” (Code Civ. Proc., § 2025.450, subd. (g)(1).)

As the Court has denied the Motion, it finds that the monetary sanctions under Code of Civil Procedure section 2025.450, subdivision (g) are inapplicable.

Therefore, the Court DENIES Defendants’ request for monetary sanctions.

Additionally, in their Oppositions, Plaintiffs and Larson request monetary sanctions against Defendants, under the authority of Code of Civil Procedure section 2023.030, subdivision (a), for alleged misuse of discovery.

However, while Defendants are unsuccessful in making their instant Motion, the Court does not find that Defendants bring the Motion without substantial justification to constitute misuse of discovery.

Therefore, the Court, in its discretion, DENIES the requests for monetary sanctions by Plaintiffs and Larson.

CONCLUSION

Defendants’ Motion to Compel Larry Larson to Appear for Deposition and to Produce Documents is DENIED.

Defendants’ request for monetary sanctions is DENIED.

Plaintiffs’ request for monetary sanctions is DENIED.

Non-party Larry Larson’s request for monetary sanctions is DENIED.

Moving party to give notice.