United Bakery Equipment, Inc. v. Prime Machining, LLC

DEFENDANTS’ MOTION FOR A PROTECTIVE ORDER REGARDING THE DEPOSITION OF PANJI BUDIMAN IN HIS INDIVIDUAL CAPACITY AND AS PMK OF PRIME MACHINING

 

MOVING PARTIES: Defendants Prime Machining LLC, Panji Budiman, and Joice Yuliani

RESPONDING PARTY(S): Plaintiff United Bakery Equipment Company, LLC

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiff United Bakery Equipment Company, LLC, (“UBE”) alleges that its former Director of Operations, Defendant Joice Yuliani, created the company Defendant Prime Machining, LLC, with her husband, Defendant Panji Budiman. Defendant Yuliani then used her position within UBE to fast-track the sale of equipment from Prime Machining to UBE, without UBE’s knowledge of Defendant’s interest in Prime Machining. 

Prime has cross-complained against UBE for the alleged failure to pay for goods received. 

Defendants now move for a protective order requiring that any deposition of Defendant Budiman first occur only in his capacity as Prime Machining’s person most knowledgeable. Plaintiff opposed. No reply was filed. 

TENTATIVE RULING:

Defendants’ Motion for a Protective Order is DENIED.  At the recommencement of the deposition of Budiman, as currently noticed, Plaintiff is free to ask any questions which are reasonably calculated to lead to the discovery of admissible evidence in this case.  The seven-hour maximum shall start anew.  Whether Plaintiff chooses to take a PMK deposition in the future remains to be seen, and if that PMK’s designation is Budiman, Plaintiff will not be allowed to unreasonably re-ask the same questions that was already asked and answered by Budiman in his previous depositions.

Plaintiff’s request for sanctions is GRANTED IN PART.  An award of monetary sanctions is issued in favor of Plaintiff, and against Defendant’s counsel, Adli Law Group, P.C, in the total amount of $5,883.50, as explained infra.  That is to be paid within 60 days to Plaintiff’s counsel.

Last, all attorneys of record in this case are hereby ORDERED to read the recently published case of Masimo Corporation v. The Vanderpool Law Firm, Inc. (G061829) (5th Dist, Div 3) (May 2, 2024).  [FN 1]  Each counsel is also ordered to file and serve a declaration within 10 days of today’s date, attesting to compliance with this order.

Plaintiff is ordered to give notice, unless waived.

DISCUSSION:

Defendants’ Motion for Protective Order

A. Legal Standard

Where good cause is shown, courts may enter protective orders limiting depositions. “The court, for good cause shown, may make any order that justice requires to protect any party, deponent, or other natural person or organization from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense.” (Code Civ. Proc., § 2025.420(b).) Courts have considerable discretion in granting and crafting protective orders. (Raymond Handling Concepts Corp. v. Superior Court (1995) 39 Cal.App.4th 584, 588.) A court may quash a subpoena entirely or partially and issue an order to protect parties, witnesses, or consumers from unreasonable or oppressive demands, including violations of privacy. (Code Civ. Proc., §1987.1; Weil & Brown, Civ. Pro. Before Trial (The Rutter Group 2008) ¶ 8:598. See also generally Cal. Prac. Guide: Civ. Trials & Ev. (The Rutter Group 2008) ¶1:91.) The burden of proof is generally on the party seeking the protective order to show good cause for whatever order is sought.  (Fairmont Ins. Co. v. Superior Court (2000) 22 Cal.4th 245, 255.)

B. Analysis

Defendants seek a protective order requiring that any deposition of Budiman in his capacity as Defendant Prime’s person most knowledgeable occur prior to—and separately from—his deposition in his individual capacity.

Plaintiff initially noticed Budiman’s deposition for February 12, 2024. At the deposition, a dispute arose over whether Budiman was being deposed in his individual capacity or PMK capacity. The deposition was terminated, and after meeting and conferring, this motion for a protective order followed. 

Any party may obtain discovery by taking the oral deposition of “any party to the action.” (CCP § 2025.010.) Generally, absent a court order or stipulation of the parties, a person may only be deposed once. (CCP § 2025.610.) However, that rule “does not preclude taking one subsequent deposition of a natural person who has previously been examined…as a result of that person’s designation to testify on behalf of an organization under Section 2025.230.” (§ 2025.610(c).) Section 2025.230 allows for the deposition of a person who is “most qualified to testify” on an entity’s behalf.

Defendant Budiman is a party to the action and Defendant Prime’s PMK. Thus, there can be no reasonable dispute that Plaintiff has the right to depose him in each capacity. 

But Defendants read these code sections to mean that the PMK deposition must precede any individual deposition. That argument is unconvincing. This court does not read section 2025.610 as setting the order for depositions. Instead, the code section is only meant to prevent a PMK from arguing that they can only be deposed once—nothing more, nothing less. (See People v. McHenry (2000) 77 Cal. App. 4th 730, 732 [“When interpreting a statute [the court’s] primary task is to determine the Legislature’s intent”].) This court is unaware of any authority interpreting section 2025.610 in a manner that requires a PMK deposition precede an individual deposition. Indeed, Defendants cite no authority that dictates the order in which depositions must proceed. 

The point is this: Plaintiff has a right to depose Defendant Budiman, who is a defendant to this lawsuit in his individual capacity. Plaintiff also has the right to depose Budiman in his capacity of PMK for Defendant Prime. So long as those depositions proceed per Code, Defendants’ attempts to avoid the depositions or dictate their order is unjustified.  

Accordingly, Defendants’ Motion for a Protective Order is DENIED.

C. Sanctions

Under CCP 2025.420(h), “the court shall impose a monetary sanction…against any party, person, or attorney who unsuccessfully makes or opposes a motion for a protective order, 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.”

Thus, the award of monetary sanctions in connection with the motion for a protective order is mandatory upon the denial of same, absent two exceptions, to wit, (1) “substantial justification” by the opposing party; and/or (2) the imposition of sanctions would be “unjust” under the totality of the circumstances.

To the Defendants’ credit, as the moving parties they did not request any award of sanctions.

Be that as it may, though, there was no substantial justification for this motion in the first place, as Defendants failed to provide any reasonable legal basis for preventing the deposition. Second, considering the totality of the circumstances, this court sees no reason why the award of a reasonable sanction would be unjust. In fact, requiring Plaintiff’s counsel to attend a fruitless deposition based on faulty legal grounds—and without any objection made beforehand—would itself be unjust without appropriate compensation for the lost time.

Plaintiff seeks sanctions against Defendants in the amount of $9,776.00, which consists of the time spent at the first deposition and the time spent opposing the motion.  This Court agrees and acknowledges that the monetary sanctions to be award under CCP § 2025.420(h)—vis-à-vis CCP § 2023.030 (a)—is not limited to the mere filing and argument of the motion.  Instead, it is expressly also includes the “reasonable expenses, including attorney’s fees, incurred by anyone as a result of that conduct.”  (CCP § 2023.030(a) (Emphasis added.)

Here, “as a result of” Defendant’s position, Plaintiff incurred fees for a court reporter, videographer, and for its counsel to appear at a deposition that ended before it started. It also incurred additional fees to defend against this motion.

This court agrees that the reasonable hourly rate for Plaintiff’s counsel is $865.00 per hour, as requested. (Thakor Decl. ¶ 6.) However, by utilizing a lodestar methodology, this Court finds that a total of only 3.5 hours was the reasonable amount incurred by the Plaintiff’s counsel “as a result” of Defendants’ conduct. 

Additionally, the actual costs which were reasonably incurred were the court reporter fee of $1,523.00 and videographer fee of $1,333.00. (Id. ¶¶ 4, & 5, Exhs. B & C.)

Accordingly, an award of monetary sanctions is issued in favor of Plaintiff, and against Defendant’s counsel, Adli Law Group, P.C, in the total amount of $5,883.50.  That is to be paid within 60 days to Plaintiff’s counsel.

IT IS SO ORDERED.

Dated:   May 09, 2024 ___________________________________