Judge: Richard Y. Lee, Case: 30-2019-01117436, Date: 2022-11-17 Tentative Ruling

Defendant, Hao Chin Ho (“Ho”) moves for an order quashing Plaintiff David Yang’s (“Plaintiff”) ten (10) deposition subpoenas for business records held in the possession of (1) Ben's Ornamental Iron Craft; (2) College Glass and Mirror, Inc.; (3) Eric Liu; (4) Le Design Woodworks & Custom Cabinetry; (5) Jane Adams; (6) Pacific Shores Windows & Doors; (7) Pacific Stone Design Center; (8) Stone Age Tile, Inc.; (9) Stoneware Enterprises; and (10) Vicomptel Inc, Inc. Alternatively, Ho moves for an order modifying the subpoenas by limiting the scope to “business records associated with Plaintiff and Plaintiff’s property located at 67 Interstellar, Irvine, CA 92618” and narrow the request for tax records to “invoices and receipts associated with Plaintiff and his 67 Interstellar, Irvine, CA 92618 property.” Ho also moves for monetary sanctions against Plaintiff and its attorney of record, Bin Li, Esq. of the Law Offices of Bin Li, PLC, in the amount of $2,800.

Ho contends that the 10 deposition subpoenas consist of the same single request which is overbroad in scope and time as the request seeks any and all business records that each witness has ever had with Ho; improperly seeks privileged, tax, and financial records; improperly seeks the production of protected private records of both Ho and that of third parties; seek production of irrelevant documents relating to the business records of Ho, subpoenaed companies and that of third-parties, who have nothing to do with Plaintiff or Plaintiff’s 67 Interstellar, Irvine, CA 92618 property; and seeks inadmissible character evidence of Ho’s prior purchases and dealings with the subpoenaed witnesses and with third parties who have nothing to do with Plaintiff or Plaintiff’s property. Ho asserts that monetary sanctions in the amount of $2,800 against Plaintiff and his counsel for the misuse of the discovery process in seeking private, irrelevant, privileged, improper and inadmissible documents is warranted as the request in the 10 deposition subpoenas is without justification as it seeks irrelevant documents and improperly intrudes upon Ho’s and third parties’ right to privacy.

Plaintiff contends that the Court must deny the motion because Defendant’s counsel failed to meet and confer prior to filing the motion; that the notice for the motion is defective as it fails to state which subpoenas the motion is seeking to quash; that the requests describe the documents to be produced with the required particularity; that the requested records are necessary to investigate and prove the financial transactions, or lack thereof, between the Defendants, and between the Defendants and the contractor used on the project; and that the documents sought are relevant, necessary and discoverable as the lawsuit asserts claims of alter ego and breaches of fiduciary duty owed by the Defendants, and the financial records sought will aid Plaintiff in establishing and evaluating the case and the Complaint’s allegation of un-disclosed financial transactions and relations between the Defendants. Plaintiff also argues that the motion to quash directly contradicts Ho’s own discovery responses which provide that no financial transactions ever occurred between him and any of the companies subpoenaed, and that he has never received the payments alleged. Plaintiff additionally argues that the W-2 and 1099 documents sought by the subpoenas are not privileged, that the tax privilege only covers tax returns, that privacy protections are not absolute, and that Ho improperly raises “character issue” objections which are not grounds for denying discovery. Plaintiff further argues that sanctions are not warranted because there is no substantial justification for this motion, no sincere effort to meet and confer, and that the claimed 10 hours is excessive, as well as argues that the Court should impose monetary sanctions in the amount of $1,680 against Defendant and his counsel for abuse of the discovery process.

Notice of Motion

Even though a notice of motion fails to state a particular ground for the motion, where the notice states that the motion is being made upon the notice of motion and accompanying papers and the record, and these papers and the record support that particular ground, the matter is properly before the court and the defect in the notice of motion should be disregarded. (Carrasco v. Craft (1985) 164 Cal.App.3d 796, 808.)

In addition, “[a] party objecting on grounds of lack of notice forfeits the objection by appearing at a hearing to tender a substantive argument on the issue for which the lack of notice is asserted.” (Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486, 492.)

Here, although the notice of motion does not identify the witnesses for the 10 deposition subpoenas, the notice provides that the motion is based on the motion, “the attached memorandum of points and authorities, declarations and exhibits, and such further evidence and argument as may be presented on reply and at the time of the hearing,” the memorandum of points and authorities identifies the 10 deposition subpoenas at issue, and Plaintiff has filed an opposition which includes substantive arguments on the issues raised in the motion. Thus, the instant motion to quash the 10 deposition subpoenas is properly before the Court and Plaintiff has forfeited the argument of lack of notice.

Meet and Confer

Code of Civil Procedure section 1987.1 provides, in pertinent part: “[T]he court, upon motion reasonably made by [a party, witness, consumer, or employee] … may make an order quashing the subpoena entirely, modifying it, or directing compliance with it upon those terms or conditions as the court shall declare, including protective orders. In addition, the court may make any other order as may be appropriate to protect the person from unreasonable or oppressive demands, including unreasonable violations of the right of privacy of the person.” (Code Civ. Proc. § 1987.1, subds. (a)-(b).)  

Plaintiff cites to Code of Civil Procedure sections 2016.040, 2017.020(a), and 2019.030, but these sections do not support that an objecting party must make a reasonable and good faith attempt at informal resolution of the discovery issues before filing a motion to quash a deposition subpoena. Ho moves under Code of Civil Procedure section 1987.1, which does not have a meet and confer requirement, but provides that a motion be “reasonably made.”

The evidence submitted with the moving papers indicate that Defendant Ho’s counsel emailed a letter dated August 15, 2022, concerning his objections to the 10 subpoenas, requesting a response by the end of business on August 16, 2022, the next day, and expressing the intent to file a Motion to Quash by August 17, 2022 for all 10 subpoenas. (Declaration of Genicis Aguilar, ¶¶ 4-5; Exs. B-C.) Ho’s counsel explained the reason for the short turnaround time was due to the production date for the deposition subpoena to Eric Liu, and on August 17, 2022, Plaintiff’s counsel responded by email. (Aguilar Decl., ¶¶  5-6; Exs. D-F.)

The foregoing does not support that the motion was reasonably made. Although the foregoing does not support that the motion was reasonably made, the Court will address the merits of the motion.

Merits

On or about August 3, 2022, Plaintiff issued ten (10) deposition business record subpoenas to (1) Ben's Ornamental Iron Craft; (2) College Glass and Mirror, Inc.; (3) Eric Liu; (4) Le Design Woodworks & Custom Cabinetry; (5) Jane Adams; (6) Pacific Shores Windows & Doors; (7) Pacific Stone Design Center; (8) Stone Age Tile, Inc.; (9) StoneWare Enterprises; and (10) Vicomptel Inc, Inc. [sic] which contained the same single request:

“All records REGARDING or RELATED TO any payment of monies or other items of value paid or given by YOU to any of the following: 

“Shenzhen Beautiful Garden Landscape & Construction, Inc.,

“Qinghug Feng;

“Bowen Chen;

“Hao Chin Ho, also known as David Ho

“These records include but are not limited to contracts, checks, money orders, invoices, receipts, tax forms (W2, 1099, etc.).”

(Declaration of Genicis Aguilar, ¶ 2; Ex. A)

Overbreadth

The document demand is without limitation in time or scope as to records relating to “any payment of monies or other items of value paid or given by Ho to Shenzhen Beautiful Garden Landscape & Construction, Inc.; Qinghug Feng; Bowen Chen; and Hao Chin Ho, also known as David Ho. Thus, the demand, as phrased, is patently overbroad.

Relevance

“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.)

“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.)

Plaintiff contends that the request seeks relevant information as the lawsuit asserts claims of alter ego and breaches of fiduciary duty owed by the Defendants, and that the financial records sought will aid Plaintiff in establishing and evaluating the case and the allegation of un-disclosed financial transactions and relations between the Defendants, but cites to no part of the operative Third Amended Complaint in support of this argument.

The Third Amended Complaint alleges that Ho was an employee of Plaintiff, and allege under the “Alter Ego” section, that “[t]here is such a unity of interest and ownership that the separate personalities between defendant corporation SBGLC and the individually named defendant Feng and the individual DOE defendants no longer exists, . . . .” (Third Amended Complaint, ¶¶ 7, 9.) There is no mention of Ho. Of the seven causes of action alleged in the Third Amended Complaint, only the Sixth Cause of Action for Tortious Interference with Contract and Seventh Cause of Action for Conversion are alleged against Ho. As to the Sixth Cause of Action, the Third Amended Complaint alleges that Plaintiff dismissed Ho on or around January 16, 2019, and that upon information and belief and in retaliation for being dismissed, Ho “has undertaken a systematic effort to interfere with Yang’s project [landscape improvement on property located at 67 Interstellar, Irvine, CA 92618] including, without limitation, approaching other defendants and persuading them to breach their agreements with YANG, thus disrupting the landscaping work to be done on Yang’s property.” (Third Amended Complaint, ¶ 57.) Plaintiff additionally alleges that “Defendant Ho knew of the contractual arrangements between plaintiff Yang and defendants SBGLC and Feng, and intended to disrupt these arrangements to gain benefits for himself and to damage plaintiff Yang.” (Ibid.) Plaintiff’s Seventh Cause of Action alleges that Plaintiff owned building material used in the construction project that is the subject of this action, and that without any right to the materials, “Ho took possession of certain building materials for his own use from the jobsite and resold them to third parties, materially interfering with Plaintiff’s ownership rights.” (Third Amended Complaint, ¶¶ 62-63.)

In addition, Plaintiff presents no explanation, argument or evidence showing how any of the witnesses identified in the deposition subpoenas, i.e., (1) Ben's Ornamental Iron Craft; (2) College Glass and Mirror, Inc.; (3) Eric Liu; (4) Le Design Woodworks & Custom Cabinetry; (5) Jane Adams; (6) Pacific Shores Windows & Doors; (7) Pacific Stone Design Center; (8) Stone Age Tile, Inc.; (9) StoneWare Enterprises; and (10) Vicomptel Inc, Inc. [sic] is relevant to or related in any way to Plaintiff’s claims against Ho or any other claims in this action which concern a landscape improvement on property located at 67 Interstellar, Irvine, CA 92618.

Based on the foregoing, the Court GRANTS the motion to quash the 10 deposition subpoenas in their entirety.

Monetary Sanctions

The court may impose monetary sanctions against anyone engaging in conduct that is a misuse of the discovery process. (Code Civ. Proc. § 2023.030(a).) Misuse of the discovery process includes “[p]ersisting, over objection and without substantial justification, in an attempt to obtain information or materials that are outside the scope of permissible discovery.” (Code Civ. Proc. § 2023.010(a).)

In addition, Code of Civil Procedure section 1987.2 provides that “the court may in its discretion award the amount of the reasonable expenses incurred in making or opposing [a motion to quash subpoena brought under section 1987.1], including reasonable attorney’s fees, if the court finds the motion was made or opposed in bad faith or without substantial justification or that one or more of the requirements of the subpoena was oppressive.” (Code Civ. Proc., § 1987.2, subd. (a).) An order imposing sanctions pursuant to this section must state the specific conduct or circumstances justifying sanctions. (First City Properties, Inc. v. MacAdam (1996) 49 Cal.App.4th 507, 516.)  

Here, Ho also moves for monetary sanctions against Plaintiff and its attorney of record, Bin Li, Esq. of the Law Offices of Bin Li, PLC, in the amount of $2,800 for four (4) hours drafting the motion and separate statement, three (3) hours to review the opposition and prepare the reply, and one (1) hour to appear at the  hearing for a total of eight (8) hours, at an hourly rate of $350, plus a $60 filing fee. (Aguilar Declaration, ¶ 8.) The Court notes that this totals $2,860, but as the notice, the memorandum of points and authorities, and the declaration request sanctions in the amount of $2,800, that is the amount at issue.

Although Plaintiff makes general arguments of relevance, Plaintiff does not cite to or tie those arguments or the witnesses subpoenaed with claims alleged in the Third Amended Complaint. As a result, the Court finds that the motion was opposed without substantial justification.

The Court GRANTS Ho’s request for monetary sanctions in the amount of $2,800 against Plaintiff, David Yang and his counsel of record, Bin Li, Esq. of the Law Offices of Bin Li, PLC to be paid within 30 days of the notice of ruling.

The Court DENIES Plaintiff’s request for monetary sanctions in the amount of $1,680.

Ho to give notice.