TENTATIVE RULING

Calendar:  2

Date:     2/10/2023

Case No: 21 GDCV00845 Trial Date:  May 8, 2023 

Case Name: CAC Motors DBA ZR Investment v X3 AST Consulting, Inc, et al.

MOTION TO COMPEL DEPOSITION TESTIMONY

MOTION TO COMPEL PRODUCTION OF DOCUMENTS REQUESTED IN NOTICE OF DEPOSITION

Moving Party: Plaintiff CAC Motors dba ZR Investment      

Responding Party: Defendant Sleiman Timani 

Defendant X3 AST Consulting, Inc.   

RELIEF REQUESTED:

Order of sanctions against Sleiman Timani, who appeared as PMK from X3 AST Consulting, Inc.  

Order compelling the answer and production for inspection of documents described in deposition notice. 

 

FACTUAL BACKGROUND:

Plaintiff CAC Motors dba ZR Investment (Plaintiff) brings this action against defendants X3 AST Consulting, Inc. (X3 AST Consulting), Sleiman A. Timani, and Marques Johnson, alleging that plaintiff is engaged in the automobile export business, and entered into a business relationship with defendant X3 AST Consulting pursuant to which plaintiff would request specific vehicles and X3 AST Consulting would locate, purchase and deliver those vehicles to plaintiff. Plaintiff alleges that defendant Timani, who is associated with X3 AST Consulting, contacted plaintiff and induced it to transfer money to defendants to secure a 2020 Mercedes Benz GL450, which was not in defendants’ possession.  The complaint alleges that after plaintiff transferred the funds for the vehicle, defendants failed to satisfy the security interest associated with the vehicle in order to authorize the release of the lienholder, so that the vehicle was repossessed by Mercedes Benz Financial Services.

ANALYSIS:

Motion to Compel Answers at Deposition 

Plaintiff argues that defendant has engaged in misuse of the discovery process by making evasive responses during a person most knowledgeable deposition, and by counsel interposing improper objections, interrupting the deposition, and conferring with the client while a question was pending, in effect, coaching the witness.  

Relief is sought under CCP section 2025.480(a), which provides:

“(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.”

A trial court’s determination of a motion to compel discovery cannot be overturned in the absence of an abuse of discretion.  2,022 Ranch v. Superior Court (2003) 113 Cal.App.4th 1377, 1387.

Under CCP § 2017.010, “any party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action...if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence.”  

CCP § 2025.460(b), governing deposition conduct, provides, in pertinent part:

“(a) The protection of information from discovery on the ground that it is privileged or that it is a protected work product under Chapter 4 (commencing with Section 2018.010) is waived unless a specific objection to its disclosure is timely made during the deposition.

(b) Errors and irregularities of any kind occurring at the oral examination that might be cured if promptly presented are waived unless a specific objection to them is timely made during the deposition. These errors and irregularities include, but are not limited to, those relating to the manner of taking the deposition, to the oath or affirmation administered, to the conduct of a party, attorney, deponent, or deposition officer, or to the form of any question or answer. Unless the objecting party demands that the taking of the deposition be suspended to permit a motion for a protective order under Sections 2025.420 and 2025.470, the deposition shall proceed subject to the objection.

(c) Objections to the competency of the deponent, or to the relevancy, materiality, or admissibility at trial of the testimony or of the materials produced are unnecessary and are not waived by failure to make them before or during the deposition.”

Under Los Angeles County Local Rules, Appendix 3.A, Guidelines for Civility in Litigation, subdivision (e), governing depositions:

“(6) Counsel should refrain from repetitive or argumentative questions or those asked solely for purposes of harassment. 

(7)  Counsel defending a deposition should limit objections to those that are well founded and necessary for the protection of the client’s interest. Counsel should bear in mind that most objections are preserved and need to be interposed only when the form of a question is defective or privileged information is sought.

(8) While a question is pending, counsel should not, through objections or otherwise, coach the deponent or suggest answers.

(9)  Counsel should not direct a deponent to refuse to answer questions unless they seek privileged information or are manifestly irrelevant or calculated to harass.” 

 

The separate statement shows that the motion concerns deposition questions designated A through W.   

Question A concerns whether the witness produced, Mr. Timani, was the person most knowledgeable from defendant X3 AST Consulting. 

An objection was interposed, counsel for defendant stating, “To the extent that you are referring to the notice of deposition that identifies the categories upon which the deponent is to be knowledgeable, yes, I think he can answer to that.”  There was no instruction not to answer.  The question was then asked of the witness, “So let me rephrase.  You are most knowledgeable within the company as far as any transaction with my client, CAC Motors, is that correct?”  The witness responded, “Yes.”   There was no failure to answer the question.  Plaintiff seems to bring this up to argue that improper objections were made, but the objection appears to have been to the form of the question, there was no instruction not to answer, and the witness did answer, and there was no improper coaching which would suggest a different answer would be made at a reconvened deposition.  The motion is denied.  

Similarly, with respect to question B, “Who is your CPA?”, while the witness asked counsel, “Should I give him that?”, counsel responded, “Yeah.  You can give him that.”  Evidently an answer was provided, so there is no showing of a failure to answer a question, and there was no improper objection interposed for the court to rule on.  The motion is denied. 

Question C was “So since you’re listed on this form as an agent and you’re the person most knowledgeable, is it true that on September 24, 2019, the corporate status of X3 was suspended?”  The response was an objection from counsel, “Compound.  Somewhat argumentative.  You said it’s a screenshot, Counsel, not a form.”   The separate statement does not show that there was a failure to answer the question, or that the objection was improper.  The court has reviewed the deposition transcript itself and notes that there was no instruction not to answer, but counsel for plaintiff proceeded immediately to ask, “Has X3 received a certificate of suspension?”  There was no objection, and the witness responded, “No.  To the best of my knowledge, no.”  [Depo. p. 15:14-16].  In fact, counsel for plaintiff went on to ask, “Do you know what the reason for the suspension was?”  The witness responded, “No. We were never suspended.”   [Depo., p. 15:17-18].  Plaintiff in the separate statement argues that the question must be answered yes, it’s true, no, it’s not true or that the witness does not know if it is true.   The answer “no” was provided, and to the extent the answer was to a more limited question, this approach is the way counsel for plaintiff chose to conduct the deposition.  There was no failure to answer which would justify reconvening the deposition. 

Question D was “And do all employees receive a paycheck?”  There was an objection that the question was “Beyond the scope of this deposition, at least as identified in your notice of deposition, Counsel, and entirely irrelevant to the facts of this case.”  There was then an exchange about having difficulty hearing each other, presumably in the remote set-up, and a suggestion that the court reporter read back the objection.  The separate statement indicates no information responsive to this question was disclosed.    Again, a review of the transcript itself shows that there was no instruction to the witness not to answer, but that counsel for plaintiff declined the suggestion that the objection be read back, said, “That’s fine,” and moved on to another question.  [Depo., p. 19:4-8].  There was no follow up to obtain an answer, due to the way counsel for plaintiff conducted the deposition, and no justification for reconvening a deposition.  

Question E, “How much did Kristine pay at the time of signing or delivery?” resulted in an objection that the question was beyond the scope of the deposition notice.  Counsel was asked, “So are you instructing your client not to answer,” and responded, “Not at this time,” and further stated, “So you may answer.”  The separate statement indicates the witness said, “I don’t know what—what is the question exactly?”  This does not appear improper on its face, or a failure to answer.  Again, a review of the deposition transcript itself shows that the deposition continued, and counsel for plaintiff asked another series of questions which were answered, ultimately asking, “So do you know how much Kristine paid at the time of signing, back to my line of questioning?” The witness answered, “Sir, its right there in front of you, $3,620.93.”  [Depo.  p. 23:23-25].  There has been no failure to answer the question and the motion as to this question is denied. 

A review of Questions F, H, I, J, K, L, M, N, P, Q, and U and the answers shows from the face of the separate statement itself that, although objections may have been made in some instances, it was clear that there was no instruction not to answer, and the questions were in fact answered by the witness.  In some instances, counsel for plaintiff remarked, “Oh. I see.” Or otherwise indicated satisfaction with the answer, or moved on.  [See, e.g., Response to Question N].  Question P as set forth in the separate statement is “So having paid that amount, was CAC supposed to receive the certificate of title?”   The deponent appears to respond directly to this question, “Of course. There’s no doubt about that.”   

There is no clear or persuasive argument that the responses by the deponent constitute a failure or refusal to answer, or that the answers would have been different had the objections not been interposed, or a showing of coaching of the witness through such objections.  With respect to question Q for example, while the exchange involved some back and forth and reluctance of the witness to give a “yes” or “no” answer without qualification, it appears that the question was answered appropriately in the context of the questioning.   

This result leaves questions G, O, R, S, T, V and W.   

Question G is “So looking at this lease contract, can you tell me how much was the price for the vehicle when it was leased?  And when I ask that, I mean was there a discount or markup?”  The response was an objection by defendant’s counsel, “Objection.  Document speaks for itself.  If other than the document you have any knowledge, you can testify to that.  If you’re just testifying based on the document, point that out as well.”   It is not clear from the separate statement that the witness did not answer.  A review of the transcript shows that the witness did answer that there was “zero discount,” and that the witness explained in detail how the documentation reflected that fact, referring to Section 6, and indicating that if the language used there was on the Monroney sticker, “it means no discount.” [Depo., p. 26:24- 27:12].  There is no ground for compelling further response to the question, which was answered. 

Question O is, “And how much did CAC pay to X3 for this particular vehicle?”  The separate statement shows an exchange in which the witness answered, “You have to take me to the invoice.  There is no way I can remember.”  The witness then made a guess based on unidentified documents, and counsel for defendant indicated that the invoice had been produced, and that defendants would look through their records.  [Depo., pp. 52-53].  The motion argues that deponent and counsel withheld and refused to produce the invoice, and that this is the subject of plaintiff’s motion to compel production of documents demanded in the notice of deposition.   There also seems to be an argument that X3 AST Consulting did not provide the correct person with knowledge of facts for the deposition on this matter.  There also seems to be an argument based on no particular question that the deponent later contradicted prior claims that he and his company do not sell vehicles. This type of contradiction is not a basis for compelling a further deposition when the questions which were posed were answered.  It appears from a review of the transcript that the witness did ultimately have some recollection of a ballpark number.  [Depo., pp. 58, 61-66].  It is not clear from the motion whether plaintiff is seeking a further deposition of this witness once the invoice is located, or whether plaintiff is seeking that defendant X3 AST Consulting produce a different witness with greater knowledge concerning how much CAC paid X3 AST Consulting for the particular vehicle.  This issue will be discussed at the hearing. 

The opposition argues that the deposition here was 3 and a half hours, concluded with plaintiff’s counsel ending the deposition early, and stating that “That’s all the questions I have,” and that plaintiff’s counsel had a full opportunity to ask any and all questions at the deposition.  Defendant argues that there were no instructions not to answer, and defendant did not refuse to answer any substantive questions asked.   With respect to this issue, the opposition argues that the total amount obtained by defendants from the plaintiff in connection with the subject vehicle was addressed during the deposition, and in meet and confer letters.  

Specifically, defendant indicates that the amount paid was substantiated by defendant’s testimony in the deposition (Depo., pp. 57-58, 93-94), and by email correspondence on December 8, 2022, in which defendant stated, “Plaintiff paid the agreed-upon contract price of $91,639.72 and a separate subsequent payment of $8,237.79 for the 2020 Mercedes-Benz GL450. (VIN No. 4JGFF5KE1LA129289).” [Boniadi Decl., Ex. E].  

Defendant also indicates that printouts of wire transfers have been produced in this case confirming the precise amounts and verified discovery responses also affirm these payments.  [Boniadi Decl., Ex. K, Response to Form Interrogatory No. 50.1].  The responses to interrogatories were evidently served on March of 2022, well before the deposition.  It is not clear what more plaintiff seeks to clarify these numbers, but the plaintiff is entitled to depose defendant X3 AST Consulting through a person most knowledgeable limited to questions concerning the invoice reflecting the contract price and the amount of any separate subsequent payment.   

 

Question R is, “Okay.  From your recollection, is this the latest payment made to CAC?”  The response was “I don’t know. I have to go back and check.”  The question was asked from the deponent’s recollection, and the question was answered that the deponent had no personal recollection and would have to go back and check.  Plaintiff then argues that defendants have made a representation that this lawsuit was unnecessary because they were paying their debt to defendants, and plaintiff is entitled to depositions as a matter of right.  This showing does not establish that the question was not answered and does not appear to seek a further deposition once the witness has checked, or seek that a different witness with a direct recollection be designated.  The motion is denied. 

Question S is confusing, as the question designated is, “and by ‘help,’ what do you mean?  How did you help?”  The deponent indicates that “Whatever he needed to finish it, you know, I would do for him,” and after an objection as to form was made, the deponent said, “I mean, I could act as a runner if he needs a paper or something to reach the ultimate goal of exporting the car.  He wasn’t here.  I mean, as a friend and a client, I would help him, and we did with the other eight cars.”  This response answers the question.  The focus of the argument seems to be on the exchange which followed, during which defendant and the attorney engaged in some conference which was muted, but this involved the different question of whether such help or needs included making a payoff.  This question is not the subject of the motion.  There has been no failure to answer shown by plaintiff here, and the motion is denied. 

Question T is, “So did X3 conduct that auction?”  The separate statement notes that the following exchange then occurred:

“A      How can X3 --

MR. MARTIROSYAN:· Object- -- hold on.  Objection. Assumes facts--

THE WITNESS:· This is so ridiculous.

MR. MARTIROSYAN:· Objection.· Assumes facts not in evidence. It lacks foundation.  X3 does not conduct auctions, Mr. Kouprine.”

It would appear that this question was not answered by the deponent, but a review of the transcript itself shows that the next thing which occurred in the deposition is that the deponent stated, “Or anything similar to that.”  Plaintiff’s attorney then said, “All right.  So after paying about $48,000, X3 still had about 33,000 of the money paid by CAC? Does that check out?”  [Depo., p. 87:1-4].  It is evident in reviewing the entire exchange that the question was answered by the deponent, and that at the time of the deposition, counsel for plaintiff was satisfied with the answer, did not further pursue it, but moved to a different line of questioning.  The moving papers do not even argue that plaintiff needs a clearer answer to the question as to whether X3 AST Consulting conducted the auction, and how a clearer or different answer would advance plaintiff’s case. It does not appear the answer would have been different without the objection.  Instead, the motion as to this question is made to point out what plaintiff considers unprofessional behavior without a basis for claiming any substantive relief.  The motion is denied. 

Question V is, “Okay.  And you said that CAC agreed not to buy this vehicle, correct?”  The response is, by counsel for defendant, “Objection.  Misstates his testimony.”  The deponent then states, “Yes, he did.”  Defendant’s attorney then interjects, what “whether CAC agreed not to buy the vehicle or CEC decided not to buy the vehicle are two different things. That is the basis of my objection.  I’m not entirely sure the form of the question was appropriate.”   The question was answered by the deponent, although there is some ambiguity because the question is stated in the negative.  In fact, the moving papers conceding the question had “reverse nature.”   

In any case, a review of the transcript shows that in response to the objection, counsel for plaintiff stated, “Okay.”  Counsel then asked “So I guess you stated that CAC decided not to buy the vehicle, is that correct?”  The response from the deponent was, “Yes.”  There then followed detailed questioning and answers regarding the basis for the decision and what was communicated and done, and when.  [Depo., pp. 91-92].  The question has been answered and the motion is denied. 

Question W is, “So I will ask you about the 8,237, which CAC paid to you.  You said it was a bill from Mercedes to Mr. Johnson.  What did CAC receive in return for that payment?” 

The separate statement sets forth the following exchange:

“A   They did their -- they did what they're supposed to do. They caused a problem, and they helped diffuse it.  And it's not – 

MR. MARTIROSYAN:· Excuse me. 

THE WITNESS:· -- fully diffused. 

MR. MARTIROSYAN:· Again, incomplete hypothetical. Assumes facts not in evidence.  What did they receive in return for that payment, Mr. Kouprine?  Was that the question? 

MR. KOUPRINE:· Yes.  It was the question. 

MR. MARTIROSYAN: Is there an assumption that they have to receive something in return for a payment? 

MR. KOUPRINE:   Well, usually when somebody pays money, they get something back in the world I live in. 

MR. MARTIROSYAN: Oh, oh. In the world you live in. So if you owe a debt and you pay it, what are you receiving in return? Less money that you owe? 

MR. KOUPRINE: You receive a clean slate and no debt. 

MR. MARTIROSYAN:  Oh, okay.”

The deponent did provide an answer to the question, that the payment was to diffuse a problem caused by plaintiff.  The objections that there was an incomplete hypothetical or the question assumes facts not in evidence are not appropriate to the subject question.  A review of the transcript shows that immediately after the exchange quoted in the separate statement, counsel for plaintiff stated, “but let’s not engage in a discussion.  Let’s—let’s just try to wrap this up,” and moved on to another question.   [Depo., pp. 98-99]. 

The motion argues that Timani omitted the sum of $8,237.00 from his previous testimony concerning the amount received and which plaintiff alleges was misappropriated in connection with the vehicle.  It is not clear why this is a reason that the response concerning what plaintiff was to receive for this additional sum paid was insufficient.  A review of the entire transcript shows that there was no follow-up question to this question concerning what services were provided or received to diffuse the problem.  As argued in the opposition, a motion to compel a further deposition is not intended to address a situation where counsel conducting the examination did not appropriately pursue responses which are later claimed to have been lacking.   

Defendant relies on California Practice Guide: Civil Procedure Before Trial  (The Rutter Group, 2022 rev.) in which Weil and Brown advise practitioners:

“[8.741].  Effect of incomplete answer? As long as a partial answer has been given, the witness has not “failed” to answer. It is up to the examiner to press for a complete answer at the time of deposition. Unless the examiner does so, there is no basis for a motion to compel (or ground for allowing a second deposition of the same witness). 

[8:741.1] Example: Examiner asks for “names and addresses of all doctors who treated you.” Deponent gives their names but not their addresses. But Examiner was inattentive and fails to follow up on this point. Later, on reading the transcript, Examiner realizes Deponent did not fully answer the question. Most judges would probably deny a motion to compel further discovery in such a case on the rationale that Deponent should not be required to submit to additional questioning because of Examiner's mental lapses at the deposition.”

Civil Procedure Before Trial, paras. 8.741, 8.741.1, italics in original].  

The papers have failed to show that there was a failure to answer other than as discussed in connection with Question O, and the motion is denied as to this question as well.   

The motion will be granted only as to Question O, to be limited to the sums reflected in the invoice to be produced to plaintiff, if it can be located, and the sum paid in the separate, subsequent payment.  As discussed in connection with the other motion below, if the invoice is not produced, at the deposition there may be further questioning concerning the efforts to locate the invoice, and whether it in fact existed.  

The motion is otherwise denied, as plaintiff has failed to establish, either by the moving papers and separate statement, or once the entire transcript was affirmatively reviewed by the court, that there has been a failure or refusal to answer the questions at issue.  The court notes that it should not have been required to review the transcript on so many occasions to discover that there were responses to the subject questions which had not been included in the separate statement.    

Under CCP §2025.480:

“(e)  If the court determines that the answer or production sought is subject to discovery, it shall order that the answer be given or the production be made on the resumption of the deposition.” 

Such an order is made here, limited to Question O. 

Monetary Sanctions 

Both sides seek sanctions.  

Under CCP § 2025.480 (j):

“(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.”

The results of the motion are mixed, and it has not been fully unsuccessfully made, or fully unsuccessfully opposed.   

However, the court finds that the motion was unsuccessfully made as to 22 of the 23 requests on which it was based, several of the requests which were represented as not having been answered when it was clear from the separate statement that answers had been provided, and several of the requests which were represented as having not been answered based on a separate statement which selectively presented the deposition exchanges, and review of the transcripts revealed that answers had been provided.  The court accordingly awards reasonable fees to the opposing party for having successfully opposed the motion as to 22 of the requests in the reasonable sum of just under half an hour to oppose each such request, $200 per request, or $4,400.  

The court would ordinarily award reasonable fees to the moving party for having successfully made the motion as to Question O.  However, the notice of motion does not specify the type of sanction sought. 

CCP § 2023.040 clearly requires that

 “A request for a sanction shall, in the notice of motion, identify every person, party and attorney against whom the sanction is sought and specify the type of sanction sought.”

[Emphasis added].

The notice of motion seeks “sanctions,” without specifying the type of sanction sought, and the memorandum appears to seek monetary, evidentiary, issue or terminating sanctions, without having given proper notice concerning such sanctions.  No sanctions are awarded to moving party.  

 

Motion to Compel Further Responses to Document Demands in Deposition Notice

Plaintiff argues that defendant X3 AST Consulting failed to produce documents requested within the Notice of Deposition served in this matter but made objections which plaintiff argues are frivolous and untimely amended the objections, when the documents are relevant to the fundamental issues in this case.  

CCP § 2025.450 (a) provides, in pertinent part:

“(a) 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..., 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.”

The moving papers sufficiently establish that the deponent X3 AST Consulting, which is a party the action, was served with a deposition notice which requested production of certain documents.  Defendant served objections to the demands, and amended objections, and it is argued by plaintiff, failed to produce for inspection all of the documents described in the deposition notice.   [Kouprine Decl., paras. 2-4, 10]. 

  Under CCP § 2025.450 (b):

“(b) A motion under subdivision (a) shall comply with both of the following:

(1) The motion shall set forth specific facts showing good cause justifying the production for inspection of any document, electronically stored information, or tangible thing described in the deposition notice.

(2) The motion shall be accompanied by a meet and confer declaration under Section 2016.040, or, when the deponent fails to attend the deposition and produce the documents, electronically stored information, or things described in the deposition notice, by a declaration stating that the petitioner has contacted the deponent to inquire about the nonappearance.”

The burden is on the moving party to show both relevance to the subject matter and specific facts justifying discovery.   Glenfed Develop. Corp. v. Superior Court (1997, 2nd Dist.) 53 Cal.App.4th 1113, 1117.   Once good cause is established by the moving party, the burden then shifts to the responding party to justify any objections made to document disclosure.   See Hartbrodt v. Burke (1996, 2nd Dist.) 42 Cal.App.4th 168, 172-174.

Good cause is shown when a moving party provides a fact-specific showing of relevance.  Kirkland v. Superior Court (2002, 2nd Dist.) 95 Cal.App.4th 92, 98.

Here, the motion seeks the production of documents responsive to demands Nos. 1, 4, 5, 7, 8, and 10.   

Request No. 1

This request seeks business records related to each of nine specified vehicles, in connection with transactions in which X3 AST Consulting was involved. 

As an initial matter, the separate statement submitted in support of the motion is incomplete.  The separate statement sets forth the text of the request, the text of the initial objection, and then acknowledges that an amended objection was filed, but states, “Amended Objection is substantially identical to the objection.  (Exhibit Y).”

CRC Rule 3.1345(c) provides that a separate statement is a “separate document filed and served with the discovery motion that provides all the information necessary to understand each discovery request and all the responses to it that are at issue.”   The section requires that a separate statement “must be full and complete so that no person is required to review any other document in order to determine the full request and the full response.” The rule requires the statement “must include” for each discovery request to which a further response “(1) The text of the request, interrogatory, question or inspection demand” in addition to “(2) The text of each response, answer or objection, and any further responses or answers, ...” (emphasis added).  

The separate statement here does not include the text of the amended objection for this request.

This situation requires the court to consult another document, specifically, Exhibit Y, to locate the language of the operative objection.  This presentation is improper.   The court reluctantly has reviewed Exhibit Y to locate the omitted information, but plaintiff is cautioned that in the future the court may refuse to consider the merits of a motion which is not supported by a code compliant separate statement or other documentation.   

The amended objection states:

“Defendant hereby specifically objects to this request based on the following grounds: 

On the grounds that this request is overbroad, not reasonably limited in scope, and vague and ambiguous. 

Subject to, and without waiving said objections, Defendant responds as follows: Defendant will produce nonprivileged and relevant documents in its possession, custody, or control, located in the course of a reasonably diligent search which may be responsive to this Request.”

Plaintiff argues that good cause exists for compelling production of these documents because plaintiff needs business records to compare to bank records to confirm the terms of the various transactions and defendant’s mode of operation, including to support plaintiff’s allegations that the individual defendants treat the corporation as their alter ego. 

In addition, as discussed above, in the PMK deposition, the deponent indicated that there was an invoice for the subject vehicle which had been produced, or for which plaintiff would further search, conceding the relevance to this matter of any such invoice, and certainly its discoverability.  [See Depo., pp. 53-56].  

The opposition argues that all documents which plaintiff has have been produced, and any deposition testimony to the effect that there was an invoice for the subject vehicle was a mistake, or misunderstanding. 

The motion seems to focus on the invoice for the subject vehicle, and it appears from the moving papers that several documents otherwise responsive to this request have in fact been produced.  [See Kouprine Decl., Ex. M (Ex. M filed separately)].

However, the invoice for the vehicle which is the subject of this action would be highly relevant, and there is some confusion with respect to whether such an invoice exists.  The moving papers establish good cause for the production of this document, or a further response from defendant which represents under oath that such a document cannot be located and describes the efforts to locate it.  

Defendant in opposition argues that the invoice does not exist or is not in defendant’s possession, and that defendant has informed plaintiff of this fact through several meet and confer efforts.  Defendant makes no effort to justify any of the objections asserted, such as overbreadth or vagueness, as is defendant’s burden to do once good cause is established.  The court overrules all objections.   

The objections and amended objections here are not verified, so any of the statements of compliance are not binding of defendant, and the representations made by counsel in meet and confer letters are not representations by defendant under oath concerning the existence of documents.  This situation leaves plaintiff in a position where it does not currently have a verified response from defendant or deposition testimony under oath which would foreclose defendant from relying on further responsive documents should they surface later in the litigation, or permit plaintiff to exclude such documents, or present a verified statement or deposition testimony under oath for purposes of arguing to the trier of fact the import of such a document not being produced.   

While the court recognizes that the statutory scheme with respect to document demands in deposition notices does not require the type of written verified response required when responding to standard document demands, the court in this instance finds good cause to require that defendant serve a further response to the demand for documents which fully complies with the requirements for a statement of compliance and a statement of inability to comply as set forth in  CCP sections 2031.220 and 2031.230, that is, a statement which is verified, which traces the statutory language (not limited to producing “relevant” documents), which statement is made after defendant has exercised diligence to locate all responsive documents, and which statement includes for any missing document the statutorily required details. 

With respect to a statement of compliance, CCP section 2031.220 requires:

“A statement that a party to whom an inspection demand has been directed will comply with the particular demand shall state that the production, inspection, and related activity demanded will be allowed either in whole or in part, and that all documents or things in the demanded category that are in the possession, custody, or control of that party and to which no objection is being make will be included in the production.”

With respect to a statement of inability to comply, CCP section 2031.230 requires:

“A representation of inability to comply with the particular demand for inspection shall affirm that a diligent search and a reasonably inquiry has been made in an effort to comply with that demand.   This statement shall also specify whether the inability to comply is because the particular item or category has never existed, has been destroyed, has been lost, misplaced, or stolen, or has never been, or is no longer, in the possession, custody, or control of the responding party.   The statement shall set forth the name and address of any natural person or organization known or believed by that party to have possession, custody, or control of that item or category of item.”

The court further requires that the statement of inability to comply describe the efforts made to locate the subject invoice, which was identified in the PMK deposition as existing, the deponent stating, “100 percent there should be an invoice.”  [Depo., p. 53: 22-23].   

Once this response is served, the PMK deposition will reconvene, as discussed above, and plaintiff may pose the outstanding question regarding the transaction concerning the subject vehicle, and may also ask follow up questions concerning the existence or non-existence of the subject invoice and efforts made to locate it. 

Request No. 4

The request seeks:

“Print out of each record of the Quick Book software or any other accounting software used to record the transaction, related to each vehicle referenced above.”

The amended objection states:

“Defendant hereby specifically objects to this request based on the following grounds: 

On the grounds that this request is overbroad, not reasonably limited in scope, and vague and ambiguous. 

Subject to, and without waiving said objections, Defendant responds as follows: Defendant will produce nonprivileged and relevant documents in its possession, custody, or control, located in the course of a reasonably diligent search which may be responsive to this Request.

Defendant hereby specifically objects to this request based on the following grounds: To the extent that it is overly broad and remote and as such is not calculated to lead to the discovery of information relevant to the subject matter of this action nor is it calculated to lead to the discovery of admissible evidence. To the extent that it is protected by Responding Party’s constitutional right to privacy in financial information and is not subject to discovery in this action. The request is burdensome and harassing and is not calculated to lead to the discovery of admissible evidence. This is not a debtor’s examination, nor is discovery permitted regarding the financial wellbeing of the Defendant, unless and until Defendant requests and obtains a prior Court order. See Cobb v. Sup.Ct. (1979) 99 Cal.App.3d 543, 550 (a right of privacy exists as to a party's confidential financial affairs, even when the information sought is admittedly relevant to the litigation); Cal. Civ. Code §3295(c). The California Supreme Court has concluded that discovery of tax returns and any incidental documents are privileged, consistent with the legislative purpose behind Revenue and Taxation Code §19282. See Webb v. Standard Oil Co. of Cal. (1957) 49 Cal.2d 509, 512-513 (the purpose of the privilege is “to facilitate tax enforcement by encouraging a taxpayer to make full and truthful declarations in his return, without fear that his statements will be revealed or used against him for other purposes.”); see also, Aday v. Superior Court of Alameda County (1961) 55 Cal.2d 789. This privilege is to be broadly construed. Sav-On Drugs, Inc. v. Superior Court (1975) 15 Cal.3d 1, 6-7. The privilege covers far more than the return itself; it includes “indirect” disclosure of its contents by any procedure. Schnabel v. Superior Court (1993) 5 Cal.4th 704, op. cit. at 719. QuickBooks is an accounting software used to track the books of a company for purposes of generating profit and loss statements and tax returns. In fact, there is a pending Motion to Quash that was filed by X3 AST Consulting, Inc. precisely related to the same issue, i.e., whether discovery can be had into the financial wellbeing of said defendant and whether X3 AST Consulting, Inc.’s objections are valid or not.”

Plaintiff argues that the amended objection should be disregarded as untimely, but it appears that the parties agreed to continue the deposition date, and continued to meet and confer, and the amended objection was served well within the deadline to object in connection with the continued hearing date.  The amended objections are considered the operative objections. 

Plaintiff in the separate statement seems to argue that this information is not protected by financial privacy and tax return privilege without defendant having obtained a protective order and seems to argue that these records are needed to support plaintiff’s allegation that plaintiff is entitled to reimbursement of the money paid to defendants because plaintiff received nothing of value in return for his payment.  Plaintiff seems to argue that the information would also be relevant to defend against defendant’s position that plaintiff cannot pursue this matter because plaintiff has accepted a total payment of $40,000 from defendant as full resolution of this dispute, and a purported claim that the transaction was terminated by agreement to reimburse $81,025, which payments plaintiff alleges were never received, and defendant has indicated in deposition such payments would be found in X3 AST Consulting’s QuickBooks.   

This showing appears sufficient to establish good cause for the production of QuickBooks information as to the subject vehicle.

However, the argument does not appear sufficient to meet plaintiff’s initial burden to show good cause for the production of such documents in connection with the other transactions.   This issue will be discussed at the hearing, as it is not clear from the moving papers or the meet and confer correspondence that plaintiff is continuing to seek the QuickBooks information with respect to other transactions.  The moving papers do not argue, for example, that these documents are discoverable based on plaintiff’s alter ego theory.  

Defendant in opposition argues that it is not clear why plaintiff is making a motion concerning this request when plaintiff in meet and confer correspondence confirmed that plaintiff was not further pursuing QuickBooks records.  Defendant submits a letter dated October 31, 2022, in which counsel for plaintiff stated:

“At his deposition, your client stated that he had records showing all payments associated with the subject vehicles made to third parties. While our client does not insist on the Quickbooks records of your client, our client is entitled to the business records reflecting those payments, especially in light of Timani’s admission that he had those records.”

[Boniadi Decl., para. 8, Ex. G] (emphasis added).   

The court will hear argument with respect to whether plaintiff is seeking such records, particularly in light of the court’s anticipated ruling concerning Request No. 1, with respect to the subject business records, and, if so, whether the parties should be ordered to further meet and confer on the issues related to this request only.   

Overall, plaintiff has met the initial burden of good cause only as to the records concerning the subject vehicle and transaction, shifting the burden to defendant to justify any objections or failure to produce responsive documents.  

Defendant in opposition merely states:

“With respect to Request for Production No. 4 seeking X3’s QuickBooks records, X3 objects to its disclosure. In fact, Plaintiff’s meet and confer letter dated October 31, 2022 letter confirms that Plaintiff “does not insist on the QuickBooks records of your client.” (Boniadi Decl., Exhibit G). Plaintiff filed a motion for this request anyway.”

[Opposition, 12:23-26].    

This argument fails to meet defendant’s burden to justify defendant’s objections, and the court overrules the objections.   Specifically with respect to the financial privacy objection, the objection itself indicates that the court would be addressing such an objection in connection with a motion to quash a subpoena for defendant’s bank records.  The court has since that time ruled on that motion, and essentially denied the request to quash the subpoena.  Defendant has in fact submitted that previous minute order with the opposition.  [Boniadi Decl., para. 2, Ex. A].  The financial privacy objection was found to not bar the subpoenas in connection with the previous motion, based in part on the limited privacy protections afforded a corporate entity under Roberts v. Gulf Oil Corp. (1983) 147 Cal.App.3d 770, 796 (“…corporations have a lesser right to privacy than human beings and are not entitled to claim a right to privacy in terms of a fundamental right…”).  This court in connection with that motion also noted that the initial burden of establishing the applicability of such a privacy right to justify withholding discovery is on the party seeking the protection.  See Williams v. Superior Court (2017) 3 Cal.5th 531, 557.  Here, defendant has submitted no showing to support its claim of financial privacy in the records in opposition to this motion.   Similarly, defendant has submitted no showing to meet its burden to establish the tax return exception.  The objection itself concedes that the QuickBook records are kept not only for tax preparation purposes, but “for purposes of generating profit and loss statements.”   The objections are overruled. 

The court grants the motion as to the QuickBook records only in connection with the subject vehicle and transaction.  Defendant will be ordered to serve a written verified response, without objection, complying with CCP sections 2031.220 and 2031.230, as discussed above, and to produce all responsive documents.   

Requests Nos. 5, 7, and 8

These requests seek bank statements for each account at each financial institution held in the name of X3 AST Consulting from January 1, 2019, each account from which a payment, reimbursement or withdrawal related to the transaction was made, and each account from which any payment, reimbursement or credit related to a transaction transacted by defendant was made. 

The amended objections state:

“Defendant hereby specifically objects to this request based on the following grounds: 

To the extent that it is overly broad and remote and as such is not calculated to lead to the discovery of information relevant to the subject matter of this action nor is it calculated to lead to the discovery of admissible evidence. To the extent that it is protected by Responding Party’s constitutional right to privacy in financial information and is not subject to discovery in this action.

The request is burdensome and harassing and is not calculated to lead to the discovery of admissible evidence. This is not a debtor’s examination, nor is discovery permitted regarding the financial wellbeing of the Defendant, unless and until Defendant requests and obtains a prior Court order. See Cobb v. Sup.Ct. (1979) 99 Cal.App.3d 543, 550 (a right of privacy exists as to a party's confidential financial affairs, even when the information sought is admittedly relevant to the litigation); Cal. Civ. Code §3295(c). 

In fact, there is a pending Motion to Quash that was filed by X3 AST Consulting, Inc. precisely related to the same issue, i.e., whether or not discovery can be had into the financial wellbeing of said defendant and whether X3 AST Consulting, Inc.’s objections are valid or not.”

Plaintiff argues that these bank records are relevant to plaintiff’s alter ego allegations.  

Defendant in opposition argues that X3 AST Consulting has confirmed under penalty of perjury at its deposition, and its counsel has reaffirmed through subsequent meet and confer exchanges, that X3 AST Consulting does not retain bank records dating back to January of 2019, has only the one Bank of America account, and in fact produced bank statements previous identified in response to form interrogatories by a letter of November 2, 2022.  Defendant has not made any attempt to justify the objections made, and the objections are overruled. 

The court also notes that on October 14, 2022, the court ordered, “The deponent Bank of America N.A. CT Corporation System will be ordered to comply with the subpoena issued on August 29, 2022 within 30 days of the entry by the Court of the Stipulated Confidentiality Order.”  [Ex. A, Minute Order, p. 11 of 12].  The file shows that the Stipulated Protective Order was signed and filed on October 26, 2022.  More than thirty days have passed.  Plaintiff may accordingly pursue the bank records directly from Bank of America. 

However, as discussed above, this representation that defendant does not retain these records, and does not have them, so cannot produce them, has not been clearly verified, and evidently there are some records which have been produced, and should be produced again in connection with a representation that the production includes all responsive documents.  The opposition does not point to any exchange in the deposition where defendant testified under oath that there were no documents retained by defendants.  Representations by counsel in meet and confer letters are not binding for discovery verification purposes.  

The court accordingly enters an order requiring defendant to serve a verified writing confirming the representation that there are no documents in the custody, possession, or control of defendant responsive to the requests, without objection, and which complies with the requirements for a statement of inability to comply, as discussed above, as well as a statement of compliance with respect to any responsive documents.  

Request No. 10

The request seeks, “Dealer license associated with the Membership Credentials used by you to access www.manhaime.com web site.”  

The amended objection states:

“Despite conducting a diligent search and a reasonable inquiry in an effort to comply with discovery request, no responsive documents exist in Responding Party’s current possession, custody, or control.”

Plaintiff argues that in this matter, once the vehicle was repossessed, defendants obtained additional funds from plaintiff to re-purchase the vehicle from auction, purportedly for further return to plaintiff, and that through use of a dealer’s license, defendants were able to access Manheim Riverside, aka Riverside Auto Auction, which is restricted to dealers only, and to obtain data pertaining to the upcoming sale of the vehicle.  Plaintiff argues that defendant has admitted in response to requests for admissions that it knew details concerning the location of the vehicle after repossession, and that it was scheduled to be sold at Manheim Riverside.  Plaintiff argues that using that data, defendants misled plaintiff into making a final transfer of more than $8,000 to defendants.  

Plaintiff indicates that it repeatedly observed defendant’s principal operating an automobile with a California special plate, a “dealer plate,” attached to it, further suggesting that defendant’s principal was associated with a dealer licensed under the California Vehicle Code, which would have been required to be bonded against fraud.  Plaintiff argues that defendant has admitted to having no dealer’s license from any state, so that the document request is intended to support theories that defendant willfully refused to apply for a dealer’s license and bond to prevent plaintiff from recovering for his losses, and that there are co-conspirators with defendant who permitted use of their dealer’s license, which co-conspirators may be liable for losses caused to plaintiff through use of their dealer’s license.  

Defendant in opposition argues that defendant has stated that it does not have documents in response to this request, and that defendant has attempted to clarify plaintiff’s misunderstanding of the auction business.  Defendant argues that after the vehicle was seized, it was sent to Manheim Auction by Mercedes Benz, and while plaintiff presumably believes that it was X3 AST Consulting that auctioned the vehicle, it was not, and X3 AST Consulting does not have login credentials to Manheim because it had no involvement in the auctioning of the subject vehicle. 

This response is not even a clear statement that defendant did not access the subject website to obtain the information concerning the auction and did not do so using the login credentials of another dealer.  However, it is possible that there is no dealer license in defendant’s possession, custody, or control pursuant to which this was accomplished. 

This situation appears to be another situation where there is good cause established to require a verified statement of inability to comply which complies with the Code, as discussed above, which will require the disclosure of details concerning responsive documents in the possession, custody, or control of third parties.      

Sanctions

Both sides seek monetary sanctions. 

Under CCP § 2025.480 (j):

“(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.”

The motion presents a somewhat unique situation, where the motion is technically granted requiring the submission of further responses which are not statutorily required with respect to a notice of deposition, but will be required by this court based on good cause shown under the circumstances.  The motion overall has not been unsuccessfully brought, and no sanctions are awarded to the opposing party. 

With respect to whether the motion has been unsuccessfully opposed, the court is ordering further responses/production with respect to Request No. 1 with respect to business records, further responses/production with respect to Request No. 4 only in connection with the subject vehicle, and further responses to the remaining four requests primarily in an effort to create a verified record of defendant’s position that it has no such documents it is withholding which defendant  has asserted throughout the discovery process and in meet and confer, which record is not technically required by the Code. 

The court accordingly awards monetary sanctions in favor of moving party only in connection with the fees and costs required to pursue further responses to the two requests, as it appears that defendant was otherwise substantially justified in maintaining through repeated representations that defendant did not have in its custody, possession, or control further responsive documents. 

The sanctions requested are $14,060.  This includes 15 hours @ $500 per hour to conduct the deposition itself, which will not be awarded, as the deposition itself was not wasted due to any alleged discovery lapses on the part of defendant.   Two hours of time is sought to attend the hearing, when this motion will be heard with another motion, and likely attended remotely.  The fees will be adjusted accordingly, as follows: 10.5 attorney hours at $500.00 per hour for a total of $5,250.00 broken down as 2.0 hours for the meet and confer, 6.0 hours to prepare the motion and separate statement and 2.0 hours to prepare the reply.

The moving papers also request evidence, issue, and terminating sanctions, which request the court finds premature, given that there has as yet been no failure on the part of defendant to comply with any court order ordering further responses or production, and granting such a request would not further the purpose of facilitating discovery with the view toward conducting trial on the merits.  See Caryl Richards, Inc. v. Superior Court (1961, 2nd Dist.) 188 Cal.App.2d 300, 303.  The request for such non-monetary sanctions accordingly is DENIED WITHOUT PREJUDICE. 

RULING:

Motion for Order to Compel the Deposition is GRANTED in part and DENIED in part. 

Motion is GRANTED as to Question O.  The deponent, X3 AST Consulting, Inc. through its person most knowledgeable is ordered to give answers to the question, “And how much did CAC pay to X3 for this particular vehicle?” based on information obtained from the invoice for the subject vehicle, and to answer follow up questions concerning the invoice. The deponent will also answer questions concerning the subsequent payment of additional funds for the subject vehicle not included in the contract or invoice.  If there is no invoice produced, the deponent is ordered to answer follow up questions concerning whether such an invoice existed, and the efforts made to locate such an invoice.  Said answers are to be given on the resumption of the deposition, to take place before March 15, 2023.

Motion is otherwise DENIED.    

Monetary sanctions requested by moving party:

Sanctions are DENIED.  Moving party has failed to specify the type of sanction sought in the notice of motion, as required under CCP § 2023.040. 

Monetary sanction sought by defendant: Utilizing a lodestar approach, and in view of the totality of the circumstances, the Court finds that the total and reasonable amount of attorney’s fees and costs incurred for the work performed in opposing the portion of the pending motion on which moving party was unsuccessful, that is 22 out of 23 questions, is $4,400.00 (7.3 hours @ $595/hour) [9 hours requested] [Amount Requested $5,355], which sum is to be awarded in favor of defendant X3 AST Consulting, Inc. and against plaintiff CAC Motors dba ZR Investment, payable within 30 days.  CCP §§ 2025.450 (g)(1), 2023.010 (d) and 2023.030 (a). 

Motion to Compel Production of Documents Requested in Plaintiff’s Notice of Deposition:

The Court notes it has considered the motion as to Request No. 1, despite moving party’s failure to submit an appropriate separate statement.  See CRC Rule 3.1345(c) (requiring that a separate statement “must include” for each discovery request to which a further response is requested, the text of the request, in addition to “(2) The text of each response, answer or objection, and any further responses or answers, ...”)  

Motion is GRANTED in part. 

While the Court recognizes that the statutory scheme with respect to document demands in deposition notices does not require the type of written verified response required when responding to standard document demands, the Court in this instance finds good cause has been established to require that defendant serve further responses to the demand for documents in the Notice of Deposition in connection with the subject requests which fully comply with the requirements for a statement of compliance and a statement of inability to comply as set forth in  CCP sections 2031.220 and 2031.230, that is, which is verified, which traces the statutory language (not limited to producing “relevant” documents), which statement is made after defendant has exercised diligence to locate all responsive documents, and which statement includes for any missing document the statutorily required details. 

Specifically, good cause appearing, defendant X3 AST Consulting, Inc. is ordered to serve verified responses to Notice of Deposition of the Person Most Knowledgeable from Defendant X3 AST Consulting, Inc. and Notice to Produce Documents and Materials at Deposition, Requests Nos. 1, 4, 5, 7, 8 and 10, without objection, which fully comply with CCP §§  2031.220 and 2031.230, including for each request either 1) a statement that the responding party will comply with the particular demand, including a statement that the production, inspection, and related activity demanded will be allowed either in whole or in part, and that all documents or things in the demanded category that are in the possession, custody, or control of responding party and to which no objection is being make will be included in the production, or 2) a statement of inability to comply, which statement shall specify whether any inability to comply is because the particular item or category has never existed, has been destroyed, has been lost, misplaced, or stolen, or has never been, or is no longer, in the possession, custody, or control of the responding party, and which sets forth the name and address of any natural person or organization known or believed by that party to have possession, custody, or control of that item or category of item.  With respect to a statement of compliance, the responsive documents, including those already produced, must again be produced or inspection and copying be permitted, in connection with the Request to which they respond.  

   

Response to Request No. 1 is also to include a description of all efforts made with respect to diligence in locating responsive documents, including specifically the invoice for the subject vehicle. 

Response to Request No. 4 is to be limited to the subject vehicle, identified by plaintiff in the complaint as “a 2020 Mercedes-Benz GL450 VIN 4JGFF5KE1LA129289.”  [Complaint, para. 29].  

Responses are not to include any limitation to “relevant” or “non-privileged” responsive documents but follow the language and requirements of the Code sections indicated.   

The Court has considered the objections asserted and finds that defendant has failed to justify them, and the objections are without merit, so objections are OVERRULED.  All further responses are to be without objections.

Further responses to be served within thirty days. 

If any further documents are produced, other than the invoice for the subject vehicle, and plaintiff deems such documentation to warrant questions at the reconvened deposition, plaintiff may bring an ex parte application to pursue specifically defined questions at deposition, set forth verbatim, supported by a showing of a good faith attempt to meet and confer prior to filing of the application.  

Monetary sanctions requested by moving party: Utilizing a lodestar approach, and in view of the totality of the circumstances, the Court finds that the total and reasonable amount of attorney’s fees and costs incurred for the work performed in connection with the pending motion on which plaintiff prevailed is $5,250.00 (10.5 hours @ $500/hour) [34 hours requested] plus costs of $60 filing costs [Amount Requested in notice $14,060], which sum is to be awarded in favor of plaintiff CAC Motors dba ZR Investment, and against defendant X3 AST Consulting, Inc., payable within 30 days.  CCP § 2025.480 (j).

Monetary sanctions requested in the opposition are DENIED. 

 GIVEN THE CORONAVIRUS CRISIS, AND TO ADHERE TO HEALTH GUIDANCE THAT DICTATES SAFETY MEASURES, DEPARTMENT D IS ENCOURAGING AUDIO OR VIDEO APPEARANCES

Please make arrangement in advance if you wish to appear via LACourtConnect/Microsoft Teams by visiting www.lacourt.org to schedule a remote appearance.  Please note that LACourtConnect/Microsoft Teams offers free audio and video appearance. Counsel and parties (including self-represented litigants) are encouraged not to personally appear.  With respect to the wearing of face masks, Department D recognizes that currently, the Los Angeles Department of Public Health strongly recommends masks indoors, especially when interacting with individuals whose vaccination status is unknown; for individuals who have a health condition that puts them at higher risk for severe illness; individuals who live with someone who is at higher risk; and for individuals who are around children who are not yet eligible for vaccines.  In accordance with this guidance, it is strongly recommended that anyone personally appearing in Department D wear a face mask.  The Department D Judge and court staff will continue to wear face masks.  If no appearance is set up through LACourtConnect/Microsoft Teams, or otherwise, then the Court will assume the parties are submitting on the tentative.