Judge: Elaine Lu, Case: 19STCV15991, Date: 2023-02-17 Tentative Ruling

Case Number: 19STCV15991    Hearing Date: February 17, 2023    Dept: 26

Superior Court of California

County of Los Angeles

Department 26

Background

On May 8, 2019, Plaintiff Meridian Pacific Holdings, LLC (“MPH”) filed the instant action arising out of approximately $1.6 million in advances made pursuant to three business financing agreements.  On April 1, 2021, Plaintiffs MPH and Meridian Financial Group, LLC (“MPG”) (jointly “Plaintiffs”) filed the operative Third Amended Complaint (“TAC”) against defendants Ameritek Ventures, Inc. (“Ameritek”); Lion Den, LLC (“Lion”); PPB Engineering & Systems Design, Inc. (“PPB”); Michael Stokes (“MStokes”); Constantina Frial (“Frial”); Kenneth Mayeaux (“KM”); Jamie Mayeaux (“JM”); and Clinton Stokes (“CStokes”). 

The TAC asserts eleven causes of action for (1) Breach of Contract against PPB, CStokes, MStokes, JM, and KM; (2) Breach of Contract against Ameritek, CStokes, MStokes, KM, and JM; (3) Breach of Contract against Lion, Frial, and MStokes; (4) Money Had and Received against all defendants; (5) Unjust Enrichment against all defendants; (6) Promissory Fraud against PPB, CStokes, MStokes, JM, and KM; (7) Promissory Fraud against Ameritek, CStokes, MStokes, KM, and JM; (8) Promissory Fraud against Lion, Frial, and MStokes, (9) Fraud against PPB, CStokes, MStokes, JM, and KM; (10) Fraud against Ameritek, CStokes, MStokes, KM, and JM; and (11) Fraud against Lion, Frial, and MStokes.

On March 10, 2021, MPH and Arjan Zeiger (“Zeiger”) filed the operative third amended cross-complaint against CStokes for (1) Breach of Agreement, (2) Money had and Received, and (3) Fraud. 

On April 9, 2021, Defendants and Cross-Complainants CStokes, KM, and JM filed a cross-complaint against Ameritek and Shaun Passley (“Passley”).  The cross-complaint asserts six causes of action for (1) Indemnity, (2) Breach of Contract, (3) Breach of Contract, (4) Breach of Contract, (5) Breach of Contract, and Tortious Interference with Contract.

On January 28, 2022, CStokes filed the operative third amended cross-complaint against MPH, Zeiger, Garry Weyand, Steven Davis, and Colonial Stock Transfer Company, Inc. for (1) Fraud, (2) Breach of Contract, (3) Money had and Received, (4) Quasi-Contract, and (5) Implied Contract. 

            On May 23, 2022, Defendants and Cross-Complainants CStokes, KM, and JM (collectively “Moving Defendants”) filed the instant motion to compel Plaintiff MPH’s person most knowledgeable Ari Zieger’s further answers to deposition questions.  On January 10, 2023, Plaintiffs filed an opposition.  On January 17, 2023, Moving Defendants filed a reply.

            At the initial January 24, 2023 hearing on this motion, the Court posted a tentative order denying the instant motion on the grounds that it was untimely due to a concession in the moving papers explicitly noting that the deadline to file the instant motion was May 20, 2022.  (Minute Order 1/24/23; see Meehan Decl. ¶ 3, Exh. 1.)  At the hearing, the parties stipulated that Moving Defendants’ Counsel letter attached to the motion incorrectly identified the deadline for filing the instant motion to compel further responses, and the parties stipulated in open court that the reporter's transcript for the deposition of Arjan Zieger as Meridian Pacific Holding's PMK was completed on March 24, 2022.  Thus, the deadline to file the instant motion is May 23, 2022 – i.e., 60 days after completion of the transcript of the deposition.  (Minute Order 1/24/23; CCP § 2025.480(b).)  Accordingly, the Court continued the instant motion to February 17, 2023 and ordered Moving Defendants to file and serve “(1) the complete deposition transcript as an exhibit to a declaration; and (2) a proposed order in the form of a chart/table” by January 31, 2023.  (Minute Order 1/24/23.)  The Court also provided Plaintiffs an opportunity to identify any additional responsive testimony to the at issue requests that was omitted from Moving Defendants’ proposed order by February 7, 2023.  (Minute Order 2/7/23.)

            On January 31, 2023, Moving Defendants filed a notice of withdrawal, in which Moving Defendants withdrew half of the questions at issue for the instant motion, and Moving Defendants filed a proposed order as requested.  On February 8, 2023, Plaintiffs filed a proposed order.

Legal Standard

Code Civil Procedure section 2025.480 provides, in pertinent part, as follows:

(a) If a deponent fails to answer any question or to produce any document, electronically stored information, or tangible thing under the deponent’s control that is specified in the deposition notice or a deposition subpoena, the party seeking discovery may move the court for an order compelling that answer or production.

(b) This motion shall be made no later than 60 days after the completion of the record of the deposition, and shall be accompanied by a meet and confer declaration under Section 2016.040.

…

(j) The court shall impose a monetary sanction under Chapter 7 (commencing with Section 2023.010) against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel an answer or production, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.

Discussion

            As noted by the parties and by the notice of withdrawal, only questions 5-8 as designated in the moving papers, remain at issue.

Meet and Confer

            Here, Plaintiff MPH’s person most knowledgeable – Ari Zeigler – was deposed on March 3, 2022.  (Meehan Decl. ¶ 2.)  During this deposition, Zeigler did not answer several questions relating to Norfolk Atlantic Holdings, LLC.  (Meehan Decl. ¶ 2.)  On May 16, 2022, Moving Defendants emailed a meet and confer letter regarding the eight questions at issue.  (Meehan Decl. ¶ 3, Exh. 1.)  Moving Defendants’ Counsel later followed up with a voicemail for Plaintiffs’ Counsel.  (Meehan Decl. ¶ 4.)   However, before filing the instant motion, Moving Defendants had not heard back from Plaintiffs’ Counsel.  (Meehan Decl. ¶ 4.)

            In opposition, Plaintiffs’ Counsel notes that the parties met and conferred telephonically on March 14, 2022 regarding setting a third deposition, and the parties discussed the questions at issue.  (Miller Decl. ¶¶ 2-5.)  In sum, the parties telephonically met and conferred and Moving Defendants sent a meet and confer letter before the instant motion was filed.  For the instant motion, this is sufficient.

Questions #5-7

            5. Q: Who owns Norfolk Atlantic Holdings?

                ZIEGER: It’s subject to nondisclosure

            6. Q:[Who owns Norfolk Atlantic Holdings?] Is it Tasman Trust?

                ZIEGER: Subject to nondisclosure.

            7. Q: Who are the parties to the non-disclosure agreement with Norfolk Atlantic?

                 MR. MILLER: Objection. I’m not going to–Do not answer that.

                 ZIEGER: (no response)

            Objection: Nondisclosure

            Here, as a preliminary matter, no objections were made to questions 5 and 6.  The deponent – Zieger – did respond to questions 5 and 6, indicating that who owns Norfolk Atlantic Holdings is subject to a nondisclosure agreement.  However, the response did not directly answer the questions, and the parties do not contend that Zieger’s response to questions 5 and 6 is responsive to the request.  Thus, the Court will treat questions 5 and 6 as questions that Zieger failed to answer.  (CCP § 2025.460(e).)

            Moving Defendants contend that there is no legal precedent that shields the disclosure of the information sought based on a third party nondisclosure agreement.  Plaintiffs in opposition contend that the information is protected by the privacy rights of third parties. 

            With regard to privacy rights, a party’s failure to raise such object does not automatically waive the privacy especially with regard to the privacy of third parties.  (Boler v. Superior Court (1987) 201 Cal.App.3d 467, 472, Fn. 1.)  Thus, it is immaterial for purposes of the instant motion whether the privacy objection was specifically raised in the deposition.

            The right of privacy in the California Constitution (art. I, § 1), “protects the individual's reasonable expectation of privacy against a serious invasion.”  (Puerto v. Superior Court (2008) 158 Cal.App.4th 1242, 1250 [italics in original]; See Williams v. Superior Court (2017) 3 Cal.5th 531, 552 [“In Hill, we established a framework for evaluating potential invasions of privacy. The party asserting a privacy right must establish a legally protected privacy interest, an objectively reasonable expectation of privacy in the given circumstances, and a threatened intrusion that is serious.  The party seeking information may raise in response whatever legitimate and important countervailing interests disclosure serves, while the party seeking protection may identify feasible alternatives that serve the same interests or protective measures that would diminish the loss of privacy. A court must then balance these competing considerations.”].)

            As the Supreme Court has “previously observed, the right of privacy extends to sexual relations (Vinson v. Superior Court, supra, 43 Cal.3d at p. 841) and medical records (Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1, 41.).”  (John B. v. Superior Court (2006) 38 Cal.4th 1177, 1198.)  Similarly, the constitutional right to freedom of association requires protection of a person’s membership in associations, whether they pertain to religious, political, economic, or even purely social matters.  (Britt v. Superior Court (1978) 20 Cal.3d 844, 852; see also Pacific-Union Club v. Superior Court (1991) 232 Cal.App.3d 60, 71.)  Further, “‘Courts have frequently recognized that individuals have a substantial interest in the privacy of their home.’ [Citation.]”  (Puerto, supra, 158 Cal.App.4th at p.1252.)

            In establishing a privacy interest “the burden [is] on the party asserting a privacy interest to establish its extent and the seriousness of the prospective invasion, and against that showing must weigh the countervailing interests the opposing party identifies, as Hill requires.”  (Williams, supra, 3 Cal.5th 531, 557.)  “Only obvious invasions of interests fundamental to personal autonomy must be supported by a compelling interest.”  (Ibid.)

            Here, the identity of third parties to the action – i.e., the owners of the Norfolk Atlantic Holdings – would reasonably fall into the right of privacy.  Parties to a nondisclosure agreement would have a reasonable expectation that the nondisclosure agreement would not be breached.  Moreover, there is a general right of privacy in the identity of third parties.  (See Puerto, supra, 158 Cal.App.4th at p.1252.)  While there is no obvious invasion to an interest fundamental to personal autonomy in the identity of the third party owners of the Norfolk Atlantic Holdings, some relevance must be shown in overcoming this privacy right.  Moving Defendants fail to do so.  No evidence is submitted as to why the identity of third parties who own another third party Norfolk Atlantic Holdings is relevant to the instant action.  The only basis raised by Moving Defendants in memorandum is that “[Moving] Defendants assert that Plaintiffs were repaid in full by the delivery of shares of stock in a publicly-traded corporation., Ameritek Ventures, Inc., to Plaintiff and/or its assignees. One of those assignees is known as Norfolk Atlantic Holdings, LLC.”  (Motion at p.3:8-11.)  This contention does not provide a reason as to why the identity of third party owners of Norfolk Atlantic Holdings, LLC is relevant. 

            Rather, this contention would only support whether Plaintiffs were owners of Norfolk Atlantic Holding, which Moving Defendants have already asked and which have been responded to in the negative.  (Zeiger PMK Depo. II at p.59:10-12, [“Q. Do you or any company you own or control have any ownership in Norfolk Atlantic? A. No.”].)  Thus, Moving Defendants fail to provide evidence as to why identity of third parties owners of a third party company are relevant to the instant action.

            Accordingly, the objections to questions five through seven are SUSTAINED.

Question # 8

            8. Q: Are you affiliated in any way to Norfolk Properties?

MR. MILLER: Objection. “You” as in Zieger, or “you” as in Meridian Pacific Holdings, LLC? I’m confused on who you are speaking on.

Q: Ari Zieger.

MR. MILLER: Objection. This is the deposition of Meridian Pacific Holdings.

Q: What’s you answer, Mr. Zieger?

ZIEGER: Not the right forum.

Q: So you’re refusing to answer?

ZIEGER: It’s not relevant to Meridian

            Objections

            As a preliminary matter, the parties dispute the scope permissible in a deposition of the person most knowledgeable. 

            In general, a deponent can only testify as to matters that they have personal knowledge.  (Evid. Code, § 702.)  However, in a deposition of a person most knowledgeable for an entity, the entity must “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.”  (CCP § 2024.230, [italics added].)  Thus, “‘[u]nder the current law, “[i]f the subject matter of the questioning is clearly stated, 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!” [Citations.]’”  (LAOSD Asbestos Cases (2023) 87 Cal.App.5th 939.) 

            However, the Court is unaware of any authority limiting questions at the deposition of a person most knowledgeable to only information relevant to the entity.  Nor do Plaintiffs cite any such authority.  (San Diego Professional Ass'n v. Superior Court of San Diego County (1962) 58 Cal.2d 194, 199 [“The burden of establishing that a particular matter is privileged is on the party asserting that privilege”].)  Further, it is immaterial whether a question is relevant, as relevance is not a basis for an objection or refusal to answer in a deposition.  (CCP § 2025.460(c); Stewart v. Colonial Western Agency, Inc. (2001) 87 Cal.App.4th 1006, 1014 [“[D]eponent's counsel should not even raise an objection to a question counsel believes will elicit irrelevant testimony at the deposition. Relevance objections should be held in abeyance until an attempt is made to use the testimony at trial.”].) 

            Rather, to the extent that such irrelevant questions are oppressing, or harassing, Plaintiffs could move for a protective order to limit such irrelevant questions.  However, a protective order can only be entered by noticed motion or by stipulation of the parties.  (See e.g., St. Paul Fire & Marine Ins. Co. v. Superior Court (1984) 156 Cal.App.3d 82, 85-86.) 

            Nor is the information sought protected by privacy.  Whether Zieger – a party to the action – is affiliated in any way to a third-party company is not information that would fall within a person’s reasonable expectation of privacy.  However, the Court notes that questions regarding Zieger’s financial information with said third-party company would fall within the zone of privacy and require a much stronger showing of relevance than raised here to support disclosure.  (Moskowitz v. Superior Court (1982) 137 Cal.App.3d 313, 315 disapproved of on other grounds by Williams v. Superior Court (2017) 3 Cal.5th 531.) 

            Accordingly, as to question 8 the objections are OVERRULED.

Sanctions

Moving Defendants seek sanctions of $4,400.00 against Ari Zieger and Plaintiff’s Counsel Russel Miller.

Pursuant to Code of Civil Procedure section 2025.480(c), “[t]he court shall impose a monetary sanction … against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel an answer or production, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.”  (Id.) 

Here, the circumstances would make the imposition of sanctions unjust.  As noted above, Moving Defendants are only partially successful in this motion as Plaintiffs’ objections were mostly warranted.  Further, given that the requests at issue had to deal with Zieger personally and not in the manner he was being deposed as – i.e., as a person most knowledgeable on behalf of MPH – the Court does not see a clear reason for the relevance of question 8 or why Moving Defendants did not merely seek to depose Zieger on his individual basis.  Moreover, Ari Zieger was not the deponent.  Rather, the deponent was MPH’s PMK.  Therefore, the sanction request against Zieger is improper.  Accordingly, the request for sanctions is denied.

CONCLUSIONS AND ORDER

            Based on the foregoing, Defendants/Cross-Complainants Kenneth Mayeaux, Jamie Mayeaux, and Clinton Stokes’s motion to compel Plaintiff Meridian Pacific Holdings, LLC’s further deposition answers is DENIED as to questions 1-4 as MOOT, DENIED as to questions 5-7 and GRANTED as to question 8.

            The Court notes that Ryan Ellis has filed motions to be relieved as counsel for Shaun Passley and Ameritek, but the motions are not scheduled for hearing until May 5, 2023 and May 8, 2023.  To minimize any prejudice to the clients from such a lengthy delay in the hearing on these motions, the Court hereby orders Ellis (1) to advance the motions on the online Court Reservation System (CRS) to the soonest available date between March 16, 2023 and April 16, 2023, or if none is available, (2) to file and give proper notice of an ex parte application to advance the two motions to a sooner hearing date.

            Moving Parties are to give notice of this order to all parties and file proof of service of such.

            The Court’s Judicial Assistant shall also give notice to attorney Ryan Ellis.

DATED: February 17, 2023                                                   ___________________________

                                                                                    Elaine Lu

                                                                                    Judge of the Superior Court