Judge Stephen P. Pfahler, Case 21CHCV00339 2022-08-01 Tentative Ruling

Between March 2019 and April 2021, Plaintiff Laysion, LLC alleges Defendants Guillermo Macias and Colt International Clothing, Inc. ordered one million dollars ($1,000,000) in certain lighting equipment. Defendants paid $210,000, and presented another $800,000 in checks, which were rejected for insufficient funds. Plaintiff alleges an outstanding balance of $790,000.

On April 30, 2021, Plaintiff filed its complaint for Breach of Contract, Common Counts, and Fraud. On August 19, 2021, Plaintiff filed a first amended complaint for Fraud – Civil Code section 1719, Fraud Civil Code section 1572(3), Conversion – Civil Code section 3336, Breach of Written Contract, Breach of Oral Contract, Account Stated –Sale and Delivery, Quantum Meruit, and Declaratory Relief – Constructive Trust.

On December 1, 2021, the court sustained the demurrer to the second and third causes of action for Fraud Civil Code section 1572(3), Conversion, and overruled the demurrer to the seventh cause of action for Quantum Meruit. The court found the motion to strike moot in part, and denied the remainder. Defendants answered the complaint on January 18, 2022.

On February 4, 2022, the court denied Defendants’ motion to disqualify Plaintiff’s counsel. Defendants filed a notice of appeal on March 16, 2022.[1] On July 21, 2022, the court granted Defendants leave to file an amended answer to the complaint.

Defendants Colt International Clothing, Inc. and Guillermo Macias move to compel the depositions of the person most qualified (PMQ) for Laysion, LLC and/or “sole manager” Yajun Zhang. Although the notice of motion potentially identifies two different persons, it appears that Zhang is the agreed upon PMQ.

The right of Defendants to take the deposition of the qualified person on behalf of a corporate entity remains undisputed. (Maldonado v. Superior Court (2002) 94 Cal.App.4th 1390, 1398.) Although a deposition of a person should take place within 75 miles of the deponent’s residence or within 150 miles of the county where the action is pending, the Court, in its discretion, may order the deposition of a party beyond the geographic limits pursuant to Code of Civil Procedure section 2025.260. In the instant case, however, it’s represented that Zhang is a citizen and resident of the Peoples Republic of China.

According to Plaintiff in opposition, the parties agree that the deposition cannot practically take place in the Peoples Republic of China, due to national laws barring depositions absent compliance requirements with the Hague Convention approved guidelines. Hong Kong presents the most logical alternative. Plaintiff indicates a willingness to present the PMQ in Hong Kong, but it’s not clear from the extensive reply whether this agreement remains in place. Plaintiff in opposition also represented the parties agreed to share expenses for travel associated with the deposition. Again, Defendants in reply now dispute this account and contend Plaintiff is responsible for all costs.

Additionally, defendants in reply now alternatively seek an order deeming Austin Feng the PMQ, and therefore the July 6, 2022 deposition constituted the required deposition. Defendants also request a bar against Plaintiff from designating any new PMQ, and any all deposition by Feng represents the entire basis of the claim(s). Finally, Defendants contend that Toyota only applies to individuals, rather than representatives of corporate entities.

The court rejects the alternative requested relief presented in the reply seeking to declare Feng the PMQ, and limiting testimony to the prior deposition. The alternative request in the reply is improper in that it constitutes a new form of relief not presented in the motion, thereby denying Plaintiff an opportunity to respond. The court declines to sua sponte consider the request as well.

The court also rejects the extensive argument in reply arguing that Toyota is inapposite and Glass remains good law. (Toyota Motor Corp. v. Superior Court (2011) 197 Cal.App.4th 1107, 1113; Glass v. Superior Court (1988) 204 Cal.App.3d 1048.).) The Toyota court specifically rejected the reasoning of the case relied upon by Defendants in support of the motion. The court also made a point of stating that no other court in the state of California embraced the reasoning of Glass. (Toyota Motor Corp. v. Superior Court, supra, 197 Cal.App.4th at p. 1123-1124.)[2] The court therefore declines to embrace the extensive argument of Defendants rejecting the opinions of countless courts considering the subject matter, in order to create a unique exception in hopes of garnering an advantage through aggressive procedural postures. Furthermore, because Toyota was decided in the Court of Appeal Second District and Glass was a Fourth District case, the court finds Toyota presents the binding law on this court. The court therefore finds it lacks jurisdiction and authority to order the deposition in California under section 2025.450. (Toyota Motor Corp. v. Superior Court, supra, 197 Cal.App.4th at p. 1125.)

Thus, disputed agreement or not for the deposition to take place in Hong Kong or some other agreed upon location, and argument over the sharing costs for the deposition or not, the court lacks any jurisdiction to order either the location of the deposition outside the state of California or allocation of costs. The motion is therefore DENIED on ALL requested relief.

On the flip side however, while the court cannot compel the deposition, nothing in the instant ruling in any way provides license for Plaintiff to evade discovery. The court can consider a noticed, properly cited, and legally supported motions (as well as arguments in opposition) regarding the impact of delays and/or prejudice to defending the claims or Plaintiff proving their claims in principal, as a result of the failure of Plaintiff to present a PMQ for deposition. Indeed, corporate parties that refuse to produce its PMQ witness may be precluded from introducing such evidence at trial. The court otherwise declines to make an advisory ruling on the retroactive designation of a PMQ and/or whether a second deposition of the “same” PMQ is warranted, justified or allowable. Any and all potential future disputes on this subject matter may also impact the trial date. The court reserves the right to appoint a referee for coordination of any potential deposition(s) should the matter require extensive court intervention.

Multiple motions beginning with a motion to quash, motion for summary adjudication and three writs of attachment, beginning on August 31, 2022. Again, the court reserves the right to continue any and all dates, due to court congestion, caused in part by continuous requests for relief from the court on the continuing discovery quibbles. February 6, 2023 trial date to stand.

[1]The court electronic filing system shows no request for a stay or order for stay.

[2]“We find Glass unpersuasive for several reasons. First, we believe the Glass court misconstrued the Supreme Court's language in Twin Lock. The Supreme Court had found the presence of the ‘[n]otwithstanding Section 1989’ language in the 1959 version of section 2019, subdivision (b)(2) to be ‘[o]f particular significance. (Citation.) Given that, we cannot accept the Glass court's conclusion that former section 2015, subdivision (e)(3), which lacks such language, ‘virtually identical’ to the 1959 version of section 2019, subdivision (b)(2).¹⁵ Second, we have before us the legislative history which was not before the Glass court; having reviewed that history at length, we have concluded that the omission of the “[n]otwithstanding Section 1989” language in 1986 was intentional, and must be given effect. Third, we disagree with the Glass court's supposition that the Legislature determined the ‘[n]otwithstanding Section 1989’ language was ‘superfluous in light of Twin Lock. Twin Lock found that language to be important to its analysis; removing the language removes one of the underpinnings of Twin Lock and renders its discussion of the 1959 version of section 2019, subdivision (b)(2) inapplicable.^[][¶] Glass has been on the books for 22 years and has not been cited in any published decision.¹⁷ We disagree with its analysis and decline to follow it.”