Judge Virginia Keeny, Case 20VECV00119 2023-04-26 Tentative Ruling

Judge: Virginia Keeny, Case: 20VECV00119, Date: 2023-04-26 Tentative Ruling

Case Number: 20VECV00119 Hearing Date: April 26, 2023 Dept: W

HSIU-FANG LAI, et al. v. PARADISE LODGE WINNETKA, INC.

defendants mulan and martin kuos’ motion for protective order and motion to compel further discovery

Date of Hearing: April 26, 2023 Trial Date: October 23, 2023

Department: W Case No.: 20VECV00119

Moving Party: Defendants Mulan Kuo and Martin Kuo

Responding Party: Plaintiff Hsiu-Fang Lai

Meet and Confer: Yes. (Lockhart Decl. ¶¶2-3.)

BACKGROUND

Plaintiffs allege they entered into a joint venture whereby Plaintiff Hsiu-Fang Lai, Defendant Pi Lien Fong, and Defendants Martin C. Kuo and Mulan Kuo each contributed $200,000 in exchange for a one-third ownership interest in the Motel. Plaintiffs further allege the Defendants managed the operations of the Motel to the exclusion of the Plaintiffs and as part of their misappropriation of the revenues generated by the business, the Defendants formed a number of business entities, including defendant entities Paradise Lodge Winnetka, Inc., 20128 Roscoe Boulevard, LLC, and Paradise Lodge General Partnership. Plaintiffs initiated this lawsuit on January 28, 2020.

On February 24, 2020, Plaintiffs Hsui-Fang Lai and Hsin-Hsiao (Scott) Wang filed a First Amended Complaint against Paradise Lodge Winnetka, Inc., 20128 Roscoe Boulevard, LLC, Paradise Lodge General Partnership, Pi Lien Fong, Ming-Hua Fong, Allison Baskett, and Mu-Lan Kuo Martin Kuo asserting causes of action for (1) Partition of Real Property; (2) Accounting; (3) Breach of Fiduciary Duty; (4) Breach of Partnership Agreement; (5) Declaratory Relief; and (6) Unjust Enrichment.

On April 20, 2020, default was entered against Defendants 20128 Roscoe Boulevard, LLC and Paradise Lodge Winnetka, Inc. On April 22, 2020 and April 23, 2020, default was entered against Defendants Paradise Lodge General Partnership and Pi Lien Fong respectively. The default was set aside on January 27, 2021.

On May 13, 2020, Defendants Paradise Lodge Winnetka, Inc.; 20128 Roscoe Boulevard, LLC; Paradise Lodge General Partnership; Pi Lien Fong; Minghua Fong; Ming-Hui Fong; Allison Baskett; Mu-Lan Kuo; and Martin Kuo filed an answer to the FAC.

[Tentative] Ruling

I. Defendants Mulan and Martin Kuo’s Motion for Protective Order is DENIED, in part.

II. Defendants Mulan and Martin Kou’s Motion to Compel Further Responses to Requests for Production of Documents and Request for Monetary Sanctions is DENIED.

DISCUSSION

I. DEFENDANTS MULAN AND MARTIN KUO’S MOTION FOR PROTECTIVE ORDER

Defendants Mulan Kuo and Martin Kuo move this court for a protective order pursuant to Code Civil Procedure section 2025.420, limiting the method of discovery regarding the transactions represented on the Kuo Personal Financial Documents to written interrogatories and if there is a second deposition ordered, the deposition be limited in time and scope.

“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.” (CCP § 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.)

Defendants Mulan and Martin Kuo argue good cause exists for the issuance of the requested protective order as it fairly balances the Plaintiffs’ right to gather facts to support its potential claim, on the one hand, and the Kuos’ constitutional right of privacy on the other. Defendants contend they have had several different businesses and streams of income that should not be subject to the invasion of inquiry by the Plaintiffs' counsel as they are wholly unrelated to the current business. Because it is anticipated by the Defendants that their response will include that each and every transaction from the Kuo Personal Financial Documents is unrelated to the Paradise Lodge Business, Defendants state the most prudent way forward is to require that the Plaintiffs first serve a set of interrogatories. Defendants also contend the Chinese community is a very close-knit community and privacy regarding one's financial dealings and associations is very important to continued dealings within said Chinese community.

In opposition, Plaintiff argue the Kuo Defendants’ motion for protective order is a premature, unnecessary and unwarranted obstruction of Plaintiff’s discovery rights that relies on mischaracterizing the discovery history in this case and the Kuo Defendants’ own testimony. Plaintiff further contends that the court has previously ordered the Kuo Defendants to be made available for a short, half day, focused deposition. [1] (See Woo Decl., Exh. A.) Plaintiff contends it is not their intention to ask repetitive questions already posed to the Kuo Defendants but to probe and test the Kuo’s credibility and ability to testify unequivocally about issues around such financial transactions.

The court is not persuaded that there is good cause for a protective order. At the prior depositions, the Kuo Defendants had not testified to the documents recently produced and as noted by Plaintiff’s counsel, depositions allow for much more information to be extracted than interrogatories. Plaintiff is allowed to inquire into the cash and credit card payments and any contradictory statements between the documents and the Kuos’ prior testimony. The court does agree, however, to limit each deposition to no more than three hours and limit the inquiry to cash deposits and/or credit card payments relating to the hotel operations, or to payments reasonably believed by plaintiff to have originated with the hotel business.

Accordingly, the Kuo Defendants’ Motion for Protective Order is DENIED, in part.

II. DEFENDANTS MULAN AND MARTIN KUO’S MOTION TO COMPEL FURTHER RESPONSES TO REQUESTS FOR PRODUCTION OF DOCUMENTS AND REQUEST FOR MONETARY SANCTIONS

Defendants Mulan and Martin Kuo move this court for an order compelling Plaintiff Hsiu-Fang Lai to further respond and produce documents pursuant to the Kuos’ Request for Production of Documents, Set One and Two. Defendants contend Plaintiff refuses to produce the same financial documents the Kuos were required to produce in the matter even though the requested documents are critical to the Kuos’ defense in this action.

The propounding party may bring a motion to compel further responses to requests for production if it believes the statement of compliance is incomplete, the representation of an inability to comply is inadequate, incomplete, or evasive, or if an objection is without merit or too general. (CCP § 2031.310.) The motion must be accompanied by a meet and confer declaration, (CCP §§ 2016.040; 2031.310(b)(2)), and a separate statement. (CRC 3.1345.)

As an additional requirement only as to requests for production, the motion must set forth specific facts showing good cause justifying the discovery sought. (CCP § 2031.310(b)(1).) “[T]hat burden is met simply by a fact-specific showing of relevance.” (TBG Ins. Services Corp. v. Superior Court (2002) 96 Cal. App. 4th 443, 447.) The opposing party bears the burden of justifying any objections. (Fairmont Ins. Co. v. Superior Court (2000) 22 Cal.4th 245, 255; Kirkland v. Superior Court (2002) 95 Cal.App.4th 92, 97-98.)

The Kuo Defendants argue good cause exists for the production of the requested information because: (1) the discovery requested is relevant to the present action and crucial to defend against the Plaintiffs unfounded allegations against defenses the Kuos; and (2) the documents requested are necessary to establish the Kuos’ affirmative defenses.

The court disagrees. The court finds the Kuo Defendants have not established good cause for the discovery of Plaintiff’s cash deposits and credit card payments over the past ten years. The Kuo Defendants’ contention that if Plaintiffs are able to present evidence of their cash payments/credit card payments in an attempt to cause the jury to infer culpability, the Kuos should be able to point to similar cash transactions or credit card payment on Plaintiff Lai's accounts as evidence of the same — or, in other words, evidence of nothing. This argument does not support the Kuo Defendants’ affirmative defenses. The Plaintiff’s cash and/or credit card payments does not go to the‘no damages’ claim, failure to mitigate, set off, or unclean hands affirmative defenses just to name a few. As argued, the Kuo Defendants have not established how such discovery would prove they did not conspire with the Fongs to steal money from the Paradise Lodge Hotel.

Based on the foregoing, the court also denies Defendants’ request for monetary sanctions. The court finds Plaintiff has acted with substantial justification in opposing the motion.

Accordingly, Defendants Mulan and Martin Kou’s Motion to Compel Further Responses to Requests for Production of Documents and Request for Monetary Sanctions is DENIED.