Judge: James L. Crandall, Case: 21-1216871, Date: 2022-10-06 Tentative Ruling

1.    Motion to Compel Deposition (Oral or Written)

Plaintiff Egumball, Inc.’s Motion to Compel Defendant Visa, Inc.’s Person Most Knowledgeable to appear for deposition is GRANTED.

“It is a central precept to the Civil Discovery Act of 1986 . . . that civil discovery be essentially self-executing” (See Townsend v. Superior Court, (1998) 61 Cal.App.4th 1431, 1434-35). “Conduct frustrates the goal of a self-executing discovery system when it requires the trial court to become involved in discovery because a dispute leads a party to move for an order compelling [compliance with a discovery mechanism].” (See Clement v. Alegre, (2009) 177 Cal.App.4th 1277, 1291.)

“Unless otherwise limited by order of the court . . . any party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved . . . if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence . . .” (Code Civ. Proc. § 2017.010.) “Discovery may be obtained of the identity and location of persons having knowledge of any discoverable matter, as well as of the existence, description, nature, custody, condition, and location of any document, electronically stored information, tangible thing, or land or other property.” (Ibid.)

“For discovery purposes, information is relevant if it ‘might reasonably assist a party in evaluating the case, preparing for trial, or facilitating settlement.’ . . . Admissibility is not the test and information, unless privileged, is discoverable if it might reasonably lead to admissible evidence. . . .The phrase ‘reasonably calculated to lead to the discovery of admissible evidence’ makes it clear that the scope of discovery extends to any information that reasonably might lead to other evidence that would be admissible at trial. ‘Thus, the scope of permissible discovery is one of reason, logic and common sense.’. . . These rules are applied liberally in favor of discovery.” (Lipton v. Superior Court (1996) 48 Cal.App.4th 1599, 1611–1612, emphasis in original.)

Moore v. Mercer, (2016) 4 Cal. App. 5th 424, 447 provides: “Admissibility is not the test, and it is sufficient if the information sought might reasonably lead to other, admissible evidence.”

“Any doubts regarding relevance are generally resolved in favor of allowing the discovery.” (Mercury Interactive Corp. v. Klein (2007) 158 Cal.App.4th 60, 98.)

Code Civ. Proc. § 2017.020(a) states: “The court shall limit the scope of discovery if it determines that the burden, expense, or intrusiveness of that discovery clearly outweighs the likelihood that the information sought will lead to the discovery of admissible evidence.”

Code Civ. Proc. 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.”

Code of Civil Procedure section 2025.450, subdivision (a) states: “If, after service of a deposition notice, a party to the action or an officer, director, managing agent, or employee of a party, or a person designated by an organization that is a party under Section 2025.230, without having served a valid objection under Section 2025.410, fails to appear for examination, or to proceed with it, or to produce for inspection any document, electronically stored information, or tangible thing described in the deposition notice, the party giving the notice may move for an order compelling the deponent's attendance and testimony, and the production for inspection of any document, electronically stored information, or tangible thing described in the deposition notice.” Subdivision (b) provides that any motion to compel deposition “shall be accompanied . . . by a declaration stating that the petitioner has contacted the deponent to inquire about the nonappearance.”

Although no “meet and confer” is required where the deponent “fails to attend the deposition and produce the documents … described in the deposition notice,” the moving party must show that he or she has contacted the deponent “to inquire about the nonappearance.” (Code Civ. Proc. § 2025.450(b)(2).)

Leko v. Cornerstone Bldg. Inspection Serv. (Leko) (2001) 86 Cal. App. 4th 1109, 1124 provides: “Implicit in the requirement that counsel contact the deponent to inquire about the nonappearance is a requirement that counsel listen to the reasons offered and make a good faith attempt to resolve the issue. Here, the failure to appear was due to oversight and opposing counsel expressed a willingness to reschedule the depositions at a mutually convenient date.”

Code Civ. Proc. § 2016.040 states: “A meet and confer declaration in support of a motion shall state facts showing a reasonable and good faith attempt at an informal resolution of each issue presented by the motion.”

Here, Plaintiff did not establish that it inquired regarding a nonappearance. However, it appears that the parties met and conferred regarding the topics prior to the service of the Deposition Notice.

Plaintiff seeks an order compelling a Person Most Knowledgeable from Defendant Visa Inc. on the following topics:

Category No. 1: VISA’s handling or treatment of merchant accounts associated with the pornography website Pornhub.com owned and operated by MINDGEEK, including any investigations into illegal or brand-damaging conduct, any fines or other actions taken by VISA or its member banks, and any MATCH listings;

Category No. 2: VISA’s handling or treatment of merchant accounts associated with the pornography website Pornhub.com owned and operated by MINDGEEK, including any termination of MINDGEEK;

Category No. 3: VISA’s handling or treatment of merchant accounts associated with the pornography website Pornhub.com owned and operated by MINDGEEK, including any recertification of MINDGEEK; and

Category No. 4: VISA’s handling or treatment of merchant accounts associated with the pornography website Pornhub.com owned and operated by MINDGEEK, including the application of VISA’s rules and regulations for merchants.

Plaintiff served the Deposition Notice on 8-11-22. Visa Inc. objected on 8-25-22 and stated that it would not produce a witness.

The Court sees potential relevance in the information sought, and the law generally favors disclosure. Plaintiff argues that the information it seeks is relevant to its argument for punitive damages. The information sought will also not interfere with the federal case as there is a protective order in this case which provides that information discovered can be used for this case only.

The Court orders that this deposition transcript be protected under the protective order.

Based on the foregoing, the Court GRANTS Plaintiff Egumball, Inc.’s Motion to Compel Defendant Visa, Inc.’s Person Most Knowledgeable to appear for deposition.

The Court denies the request for sanctions given the lack of a proper meet and confer.

Plaintiff to give notice.

2.    Motion to Dismiss

Defendant Merrick Bank Corporation’s Motion to Dismiss is DENIED.

Code Civ Proc. § 418.10(a) provides: “A defendant, on or before the last day of his or her time to plead or within any further time that the court may for good cause allow, may serve and file a notice of motion for one or more of the following purposes: (1) To quash service of the summons on the ground of lack of jurisdiction of the court over him or her. (2) To stay or dismiss the action on the ground of inconvenient forum. (3) To dismiss the action pursuant to the applicable provisions of Chapter 1.5. ...” (Emphasis supplied)

Code Civ Proc. § 410.30(a) states: “[w]hen a court upon motion of a party or its own motion finds that in the interest of substantial justice an action should be heard in a forum outside this state, the court shall stay or dismiss the action in whole or in part on any conditions that may be just.”

Code Civ. Proc. § 418.11 states:

“An appearance at a hearing at which ex parte relief is sought, or an appearance at a hearing for which an ex parte application for a provisional remedy is made, is not a general appearance and does not constitute a waiver of the right to make a motion under Section 418.10.”

Factor Health Mgmt. v. Superior Ct., (2005) 132 Cal. App. 4th 246, 250 provides: “A defendant submits to the court's jurisdiction by making a general appearance in an action. (Roy v. Superior Court (2005) 127 Cal.App.4th 337, 341, 25 Cal.Rptr.3d 488.) A general appearance is one in which the defendant participates in the action in a manner which recognizes the court's jurisdiction. Mansour v. Superior Court (1995) 38 Cal.App.4th 1750, 1756, 46 Cal.Rptr.2d 191.) If the defendant raises an issue for resolution or seeks relief available only if the court has jurisdiction over the defendant, then the appearance is a general one. (Mansour, supra, at pp. 1756–1757, 46 Cal.Rptr.2d 191.) In general, propounding discovery constitutes a general appearance. (Roy, supra, at p. 341, 25 Cal.Rptr.3d 488.)”

This statute codifies forum non conveniens, an equitable doctrine which provides the Court with “discretion to stay or dismiss a transitory cause of action that it believes may be more appropriately and justly tried elsewhere.” (See Animal Film, LLC v. D.E.J. Productions, Inc. (2011) 193 Cal.App.4th 466, 471).

“In a contract dispute in which the parties' agreement contains a forum selection clause, a threshold issue in a forum non conveniens motion is whether the forum selection clause is mandatory or permissive. A mandatory clause ordinarily is ‘given effect without any analysis of convenience; the only question is whether enforcement of the clause would be unreasonable.’ But, if ‘the clause merely provides for submission to jurisdiction and does not expressly mandate litigation exclusively in a particular forum, then the traditional forum non conveniens analysis applies.’” (Id. Emphasis supplied)

Where a forum selection clause is mandatory, “the test is simply whether application of the clause is unfair or unreasonable, and the clause is usually given effect.” (See Berg v. MTC Electronics Technologies (1998) 61 Cal.App.4th 349, 358). “Claims that the previously chosen forum is unfair or inconvenient are generally rejected.” (Id.). “A court will usually honor a mandatory forum selection clause without extensive analysis of factors relating to convenience.” (Id. at 359). “Mere inconvenience or additional expense is not the test of unreasonableness…of a mandatory forum selection clause.” (Id.)

“Given the important of forum selection clauses, both the United States Supreme Court and the California Supreme Court have placed a heavy burden on a plaintiff seeking to defeat such clause, requiring it to demonstrate that enforcement of the clause would be unreasonable under the circumstances of the case.” (See Miller-Leigh LLC v. Henson (2007) 152 Cal.App.4th 1143, 1149). “[F]orum selection clauses are valid and may be given effect, in the court’s discretion and in the absence of a showing that enforcement of such a clause would be unreasonable.” (See Smith, Valenitno & Smith, Inc. v. Superior Court (1976) 17 Cal.3d 491, 496).

“[Enforcement of a forum selection clause “is considered unreasonable where ‘the forum selected would be unavailable or unable to accomplish substantial justice’ or there is no ‘rational basis’ for the selected forum.” (Korman v. Princess Cruise Lines, Ltd. (2019) 32 Cal. App. 5th 206, 218.)

“But ‘California courts will refuse to defer to the selected forum if to do so would substantially diminish the rights of California residents in a way that violates our state's public policy.’” (Handoush v. Lease Fin. Grp., LLC (2019) 41 Cal. App. 5th 729, 734.)

“A mandatory forum selection clause such as the one at issue here is generally given effect unless enforcement would be unreasonable or unfair, and the party opposing enforcement of the clause ordinarily bears the burden of proving why it should not be enforced.² (Verdugo v. Alliantgroup, L.P. (2015) 237 Cal.App.4th 141, 147, 187 Cal.Rptr.3d 613 (Verdugo).)

However, the burden is ‘reversed when the claims at issue are based on unwaivable rights created by California statutes [in which case] the party seeking to enforce the forum selection clause bears the burden to show litigating the claims in the contractually designated forum ‘will not diminish in any way the substantive rights afforded ... under California law.’ ” (Ibid., quoting Wimsatt v. Beverly Hills Weight etc. Internat., Inc. (1995) 32 Cal.App.4th 1511, 1522, 38 Cal.Rptr.2d 612 (Wimsatt).)” (Id. at 734.)

Juen v. Alain Pinel Realtors, Inc. (2019) 32 Cal.App.5th 972, 982 (Juen), provides, “Consent is an essential element of a contract. (Civ. Code, § 1550.) ‘[T]he consent of the parties to a contract must be communicated by each party to the other. [Citation.] “Mutual assent is determined under an objective standard applied to the outward manifestations or expressions of the parties, i.e., the reasonable meaning of their words and acts, and not their unexpressed intentions or understandings.” ’ [Citation.]”  “Defendants’ reliance on Civil Code section 3388 as a means to enforce the arbitration agreement is also misplaced. That section provides: ‘A party who has signed a written contract may be compelled specifically to perform it, though the other party has not signed it, if the latter has performed, or offers to perform it on his part, and the case is otherwise proper for enforcing specific performance.’ Civil Code section 3388 is a specific performance remedy provision for breach of a contract enforceable in equity. The offer to perform referenced in the statute is not a substitute for the mutual assent required to form a bilateral contract; the remedy requires the existence of an agreement. [Citation.]” (Id. at p. 983.; Italics in Juen.)

Banner Ent., Inc. v. Superior Ct. (Alchemy Filmworks, Inc.), (1998) 62 Cal. App. 4th 348, 358–59, as modified (Mar. 30, 1998) states: “Mutual intent is determinative of contract formation because there is no contract unless the parties thereto assent, and they must assent to the same thing, in the same sense. (Kessinger v. Organic Fertilizers, Inc., supra, 151 Cal.App.2d at p. 750.) ‘It is essential to the existence of every contract that there should be a reciprocal assent to a definite proposition, and when the parties to a proposed contract have themselves fixed the manner in which their assent is to be manifested, an assent thereto, in any other or different mode, will not be presumed.’ (Ibid., italics added.) Thus, the failure to reach a meeting of the minds on all material points prevents the formation of a contract even though the parties have orally agreed upon some of the terms, or have taken some action related to the contract. (Grove v. Grove Valve & Regulator Co. (1970) 4 Cal.App.3d 299, 311-312 [84 Cal.Rptr. 3000]; Louis Lesser Enterprises, Ltd. v. Roeder, supra, 209 Cal.App.2d at pp. 404-405; Apablasa v. Merritt & Co., supra, 176 Cal.App.2d at p. 730; Kessinger v. Organic Fertilizers, Inc., supra, 151 Cal.App.2d at pp. 749-750.)

Morgan Tire of Sacramento, Inc. v. Goodyear Tire & Rubber Co., (E.D. Cal. 2014) 60 F. Supp. 3d 1109, 1113 provides: “Before the court may consider the impact of any forum selection clause on plaintiff's choice of forum and the motion to transfer, it must first determine whether a contract exists and, if so, whether it contains the forum selection clause at issue. Kedkad v. Microsoft Corp., No. 13–0141, 2013 WL 4734022, at *3 (N.D.Cal. Sept. 3, 2013) (‘Before the court can apply federal law to the interpretation and enforcement of a forum selection clause, however, it must, as a threshold issue, determine whether a forum selection clause exists.’); see also Comerica Bank v. Whitehall Specialties, Inc., 352 F.Supp.2d 1077, 1081 (C.D.Cal.2004). Defendants here bear the burden of demonstrating the existence of a contract and the inclusion of the forum selection clause in that contract. See Kedkad, 2013 WL 4734022, at *3 n. 3; Alcatel Lucent USA, Inc. v. Dugdale Commc'ns, Inc., No. 09–2140, 2010 WL 883831, at *13 (C.D.Cal. Mar. 5, 2010).”

Slaught v. Bencomo Roofing Co., (1994) 25 Cal. App. 4th 744, 747–49 provides: “ ‘Under California law, parties may validly incorporate by reference into their contract the terms of another document.’ (Baker v. Aubry (1989) 216 Cal.App.3d 1259, 1264 [265 Cal.Rptr. 381].) The reference to the incorporated document must be clear and unequivocal and the terms of the incorporated document must be known or easily available to the contracting parties. (Spellman v. Securities, Annuities & Ins. Services, Inc. (1992) 8 Cal.App.4th 452, 457 [10 Cal.Rptr.2d 427]; Chan v. Drexel Burnham Lambert, Inc. (1986) 178 Cal.App.3d 632, 641 [223 Cal.Rptr. 838];  Baker v. Aubry, supra, 216 Cal.App.3d at p. 1264.)”

Here, the Motion was filed on 11-8-21, within the time Defendant had to file a responsive pleading. Prior to filing the Motion, Defendant had only appeared ex parte and had not filed a responsive pleading or served discovery.

Based on the foregoing, the Motion was timely filed under Code Civ Proc. § 418.10(a).

Section 5.14 of the “Terms and Conditions” of the Merchant Agreement provides that “Utah law governs this Agreement. Any claim or cause of action arising out of this Agreement against [Merrick] must be initiated and maintained exclusively in the state or federal courts located in Salt Lake County, Utah.” (Declaration of Jeff Stotts1 Ex. C.) The word “must” indicates the forum selection clause at issue herein is mandatory assuming it part of an enforceable agreement.

However, Plaintiff claims that there was no meeting of the minds as to the “Terms and Conditions,” a separate document wherein the forum selection clause is located.

Plaintiff further claims that the Merchant Agreement is not enforceable because Defendant Merrick Bank never signed it.

Plaintiff also contends that Defendant Merrick Bank did not provide Plaintiff with separate Terms and Conditions or a Program Guide along with the agreement and, therefore, Defendant cannot establish Plaintiff’s agreement. Plaintiff also contends that the “Terms and Conditions” were not properly incorporated into the Merchant Agreement.

The facts are as follows. On 10-31-14, John Bauer signed the “Merchant Application and Agreement” on behalf of eGumball. The “Merchant Application and Agreement” does not contain the forum selection clause at issue. A document entitled “Terms and Conditions” contains the forum selection clause. The “Terms and Conditions” document was not provided to Mr. Bauer at the time he signed the “Merchant Application and Agreement.”

In signing the “Merchant Application and Agreement”, Bauer acknowledged that he “received, read, understood, the Merchant Agreement, which is incorporated herein by reference thereto, and agree[d] on behalf of the merchant to be bound by the terms of such Merchant Agreement.” In addition, Bauer acknowledged that it was Plaintiff’s responsibility to “[r]eview[] and understand[] the Merchant Agreement.”

The only reference to “Terms and Conditions” in the “Merchant Application and Agreement” is on the third page, where it states: “MERCHANT APPLICATION AND AGREEMENT ACCEPTANCE (Capitalized terms not defined in this Acceptance section have the meanings set forth below in the Terms and Conditions section) . . . ¶ (vi) The Merchant Agreement will not take effect until Merchant has been approved by BANK and a merchant number has been issued to merchant; and (vii) The undersigned has received, read, understood, the Merchant Agreement, which is incorporated herein by reference thereto, and agrees on behalf of the merchant to be bound by the terms of such Merchant Agreement.

The “Merchant Application and Agreement” does not contain any “section” called “Terms and Conditions” but contains terms and conditions throughout. There is no indication from the “Merchant Application and Agreement” that by executing the contract, Plaintiff was agreeing to an additional addendum or portion of the contract entitled “Terms and Conditions.” This is further evidenced by the fact that the additional document entitled “Terms and Conditions” was not provided to Plaintiff at the time of signing. By the “Merchant Application and Agreement” stating that there was a Terms and Conditions section, it implies that this “section” was a part of the agreement in front of Mr. Bauer and not a separate document.

The reference to the “Terms and Conditions” was not clear and unequivocal and the terms of the “Terms and Conditions” document were not known or easily available to the contracting parties.

Based on the foregoing, the Court finds that Plaintiff did not assent to the “Terms and Conditions” containing the forum selection clause when signing the “Merchant Application and Agreement.”   

Based on the foregoing, the Court DENIES Defendant Merrick Bank Corporation’s Motion to Dismiss.

Plaintiff to give notice.

Future hearing dates

11/10/22 – Mtn for SLAPP

2/2/23 – Motion to Seal