Judge: Upinder S. Kalra, Case: 19STCV06482, Date: 2023-05-22 Tentative Ruling
1. If you wish to submit on the tentative ruling, please email the clerk at SMCdept51@lacourt.org (and “cc” all other parties in the same email) and notify all other parties in advance that you will not be appearing at the hearing. Include the word "SUBMISSION" in all caps in the subject line and include your name, contact information, the case number, and the party you represent in the body of the email. If you do not have access to the internet, you may call the clerk at (213) 633-0351.
If you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear and argue the motion, and the Court may decide not to adopt the tentative ruling. Please note that the tentative ruling is not an invitation, nor an opportunity, to file any further documents relative to the hearing in question which are not authorized by statute or Rule of Court.
2. For any motion where no parties submit to the tentative ruling in advance, and no parties appear at the motion hearing, the Court may elect to either adopt the tentative ruling or take the motion off calendar, in its discretion.
3. DO NOT USE THE ABOVE EMAIL FOR ANY PURPOSE OTHER THAN TO SUBMIT TO A TENTATIVE RULING. The Court will not read or respond to emails sent to this address for any other purpose.
Case Number: 19STCV06482 Hearing Date: May 22, 2023 Dept: 51
Tentative Ruling
Judge Upinder S. Kalra, Department 51
HEARING DATE: May 22, 2023
CASE NAME: Christopher Fenton v. DMG Entertainment, LLC, et al.
CASE NO.: 19STCV06482
MOVING PARTY: Defendants DMG Entertainment, LLC; DMG Entertainment Holding, LLC; DMG Management Services, Inc.
RESPONDING PARTY(S): Plaintiff Christopher Fenton
REQUESTED RELIEF:
1. An order quashing the deposition subpoena of Grace Clements Dupliesse.
TENTATIVE RULING:
1. Motion to Quash Deposition Subpoena is DENIED.
STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:
On February 25, 2019, Plaintiff Christopher Fenton (“Plaintiff”) filed a complaint against Defendants DMG Entertainment, LLC; DMG Entertainment Holding, LLC; DMG Management Services, Inc.; New Asia Success Partners Limited; Healthy Soar Investment Limited; Daniel Mintz, Bing Wu, and Peter Xiao (“Defendants.”) The complaint alleged seven causes of action for: (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) promissory estoppel; (4) promissory fraud; (5) constructive discharge; (6) retaliation in violation of Labor Code, § 1102.5; and (7) unfair business practices in violation of Business & Professions Code, §§ 17200, et seq. (the Unfair Competition Law, “UCL”).
Plaintiff alleges that he is the former President of DMG Entertainment Motion Picture Group and General Manager of DMG North America, and that he worked with the DMG entities in various senior level or representative capacities over the course of 17 years, until the end of his employment in or about February 2018. Plaintiff alleges that he originally began working with Defendants while working as a talent agent at William Morris, but that he left William Morris to establish his own entertainment company, H2F Entertainment, Inc. (“H2F”). According to Plaintiff, he continued to independently operate H2F with the DMG entities’ knowledge and approval, even after becoming the General Manager of DMG North America in January 2004.
Mintz allegedly approached Plaintiff about purchasing H2F in the summer of 2012 and hired Plaintiff to work full-time for DMG. During the purchase negotiations, Mintz and Wu allegedly promised to compensate Plaintiff with a bonus in the event the DMG entities made an initial public offering. Plaintiff specifically alleges that Mintz promised Plaintiff that DMG would “take care of him nicely in the event of an IPO” in consideration for Plaintiff’s agreement to sell H2F and to work full-time for the DMG entities.
The parties allegedly agreed to the terms of the purchase and the sale in two phases. First, Plaintiff allegedly entered into an “Agreement for Purchase of Sale and Stock” with the DMG entities through New Asia and DMG (Hong Kong) Group Ltd. (the “First Stock Purchase Agreement”) whereby the DMG entities allegedly agreed to purchase 49.9% of H2F from Plaintiff for $1,000,000. Second, Plaintiff allegedly entered into a second stock purchase agreement on November 18, 2013 through New Asia (the “Second Stock Purchase Agreement”) whereby he allegedly agreed to sell his remaining 50.1% interest in exchange for $4,020,000 to be paid over the course of five years. As part of the same transaction, Plaintiff also allegedly entered into a separate agreement with New Asia dated November 18, 2018 which set forth the terms of Plaintiff’s full-time employment with the DMG entities from 2003 to 2017 (the “Employment Agreement”).
In or around April 2014, The DMG entities allegedly announced they were planning a “back-door” IPO through a reverse merger agreement with an entity named Sichuan Gaojin Food (“SGF”). The DMG entities allegedly completed the IPO on or about November 14, 2014, when SGO issued 897.5 million shares to the owners of DMG, and the DMG entities’ shares allegedly closed with a first day value of roughly $3 billion United States dollars. Defendants allegedly did not compensate Plaintiff in connection with the IPO despite allegedly stating that they would on numerous occasions between 2015 and 2017.
According to Plaintiff, Defendants engaged in financially questionable activity after the IPO and he voiced his concerns to Mintz regarding the stock activity. Plaintiff further alleges that he demanded that Mintz honor the terms of the Employment Agreement and compensate him following the successful launch of the IPO, toward the end of 2017 when he was due to negotiate the terms of his ongoing employment with the DMG entities. Plaintiff’s negotiations with the DMG entities and Mintz allegedly made clear that the DMG entities would not pay Plaintiff bonuses for the IPO or his performance bonus, and Plaintiff alleges that he was compelled to resign on February 23, 2018.
On April 2, 2019, Defendants DMG Entertainment, LLC; DMG Entertainment Holding, LLC; DMG Management Services, Inc. filed a Demurrer with Motion to Strike.
On April 11, 2019, Defendants DMG Entertainment, LLC; DMG Entertainment Holding, LLC; DMG Management Services, Inc. filed a Cross-Complaint against Christopher Felton.
On May 24, 2019, Defendant Daniel Mintz filed an Answer.
On May 24, 2019, Defendants DMG Entertainment, LLC; DMG Entertainment Holding, LLC; DMG Management Services, Inc. filed an Answer.
On May 24, 2019, Defendant Bing Wu filed an Answer.
On June 5, 2019, Defendants DMG Entertainment, LLC; DMG Entertainment Holding, LLC; DMG Management Services, Inc. filed a First Amended Cross-Complaint against Christopher Felton.
On December 10, 2019, Cross-Defendant Christopher Felton filed an Answer.
On June 12, 2020, Defendant Healthy Soar Investment Limited filed an Answer.
On February 22, 2023, Defendants DMG Entertainment, LLC; DMG Entertainment Holding, LLC; DMG Management Services, Inc., Bing Wu, and Daniel Mintz filed a Motion to Sever.
On February 22, 2023, Defendants DMG Entertainment, LLC; DMG Entertainment Holding, LLC; DMG Management Services, Inc. filed a Motion to Quash Subpoena.
LEGAL STANDARD:
CCP § 1987.1(a) states, “[i]f a subpoena requires the attendance of a witness or the production of books, documents, or other things before a court, or at the trial of an issue therein, or at the taking of a deposition, the court, upon motion reasonably made by any person described in subdivision (b), or upon the court’s own motion after giving counsel notice and an opportunity to be heard, 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.”
“[U]pon motion reasonably made by the party, judges may rule upon motions for quashing, modifying or compelling compliance with, subpoenas.” Lee v. Swansboro Country Property Owners Ass’n (2007) 151 Cal. App. 4th 575, 582-83. Either the nonparty witness who has been subpoenaed or any party to the action may challenge the deposition subpoena. Weil & Brown, Civ. Proc. Before Trial, ¶ 8:597.
A deposition subpoena may be quashed for: (1) defects in form or content of the subpoena (e.g., inadequate description of requested records); (2) defects in service of the subpoena (e.g., failure to satisfy the requirements of providing notice to consumer; (3) requesting production of records not within the permissible scope of discovery; and (4) being unjustly burdensome or oppressive. Weil & Brown, Civ. Proc. Before Trial, ¶ 8:598.
CCP § 2017.020(a) states “the court shall limit the scope of discovery if it determines that the burden, expense, or intrusiveness of that discovery clearly outweighs the likelihood that the information sought will lead to the discovery of admissible evidence. The court may make this determination pursuant to a motion for protective order by a party or other affected person. This motion shall be accompanied by a meet and confer declaration under Section 2016.040.”
ANALYSIS:
Defendants DMG Entertainment, LLC; DMG Entertainment Holding, LLC; DMG Management Services, Inc., move to quash the deposition subpoena as to non-party Grace Clements Dupliessea, DMG’s former in-house counsel.
Defendants argue that Plaintiff cannot overcome the presumption that “taking the deposition of a litigation adversary’s counsel is improper, and cannot show the ‘extremely good cause’ required to do so.” (Motion 1: 7-9.) Moreover, based on the only relevant topics, the topics relating to DMG’s Cross-Complaint about Fenton’s fraudulent conduct, Plaintiff has failed to demonstrate that Ms. Clements is the only person with this information. Plaintiff has already deposed DMG’s PMK and chief executive and current DMG officer.
Plaintiff argues that the deposition subpoena is proper because Defendants identify Ms. Clements as a representative and employee with knowledge of the allegations in this case in their response to Form Interrogatory 12.1. Moreover, Ms. Clements is uniquely positioned “to testify concerning many of the allegations made against Fenton in the FACC. She performed accounting functions and set up accounts, oversaw wire transfers and “loans,” knew who was responsible for such tasks as chain-of-title searches and contract preparation/procurement, and would be familiar with non-protected aspects of DMG’s business practices.” (Opp. 4: 2-5.) Lastly, not everything counsel knows is privileged.
The Court finds that the deposition subpoena of Ms. Clements is appropriate. First, Defendants’ reliance on Carehouse Convalescent Hospital for the contention that deposing opposing counsel is improper is misplaced. Specifically, Defendant provides a block quote which states that attorney depositions are disruptive. However, while Defendants used ellipses in that quote, the part that was not quoted is as follows: “Rather than preparing the clients' case for trial, counsel must be prepared (often by retaining additional counsel) to place himself or herself in the witness box, being a responsive witness while remaining a partisan advocate.” (Carehouse Convalescent Hospital v. Superior Court (2006) 143 Cal.App.4th 1558, 1562.) Unlike in Carehouse, Plaintiff is not seeking opposing counsel’s deposition, but rather Defendants’ former in-house counsel. Ms. Clements is not helping to prepare Defendants’ case, as she is not opposing counsel.
Second, even still, based on the three-prong test in Carehouse, the Court finds that a deposition is permitted. “To effectuate these policy concerns, California applies a three-prong test in considering the propriety of attorney depositions. First, does the proponent have other practicable means to obtain the information? Second, is the information crucial to the preparation of the case? Third, is the information subject to a privilege?” (Carehouse Convalescent Hospital v. Superior Court (2006) 143 Cal.App.4th 1558, 1563.) First, as Plaintiff states, the information from Ms. Clements is solely with her, especially given her multitude of tasks. (Dec. Fenton ¶ 4.) Second, as demonstrated by the discovery responses, Ms. Clements is a witness to certain conduct. (Dec. Courtney, Ex. B.) Lastly, some of the information sought concerns tasks that would not be privileged, such as payroll, loan paperwork, tax notices, etc. Thus, considering Ms. Clements is not opposing counsel in the sense that she will not have to take time away from preparing a case for Defendants, coupled with the fact that Plaintiff has satisfied the three-prong test in Carehouse, Ms. Clements can be deposed.
Therefore, the Motion to Quash Deposition Subpoena is DENIED.
Conclusion:
For the foregoing reasons, the Court decides the pending motion as follows:
Motion to Quash Deposition Subpoena is DENIED.
Moving party is to give notice.
IT IS SO ORDERED.
Dated: May 22, 2023 __________________________________ Upinder S. Kalra
Judge of the Superior Court