Judge: William A. Crowfoot, Case: BC680186, Date: 2023-02-15 Tentative Ruling

Case Number: BC680186    Hearing Date: February 15, 2023    Dept: 3

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES – NORTHEAST DISTRICT

I.         BACKGROUND

On October 18, 2017, plaintiff Liwen Hsu Togi (“Plaintiff”) filed this premises liability action against the City of South Pasadena (“the City”). Plaintiff alleges she was crossing a parkway from the street when she tripped on a sidewalk that had been uplifted higher than the parkway surface. Supposedly a root from a tree in the parkway had lifted the sidewalk. On September 6, 2018, Plaintiff added West Coast Arborists (“WCA”) as a doe defendant. WCA was the vegetation vendor who contracted with the City to trim the City’s trees.

On July 3, 2019, the Court denied the City’s motion for summary judgment against Plaintiff. But on August 24, 2020, the Court granted WCA’s motion for summary judgment against Plaintiff.

On August 22, 2018, the City cross-complained against WCA, seeking indemnification, apportionment of fault, declaratory relief, and damages for breach of contract. The breach of contract cause of action sounds in express indemnity and alleges that WCA breached its contract with the City for failing to defend and indemnify it. WCA cross-complained against the City on October 16, 2018.

On July 29, 2022, the Court denied WCA’s motion for summary judgment against the City, finding WCA had not met its burden of showing the City could not establish that WCA breached its express agreement to defend and indemnify the City.

On November 9, 2022, the City served a Second Amended Notice of Taking Oral Deposition and For Production of Documents and Things on WCA’s corporate president, Patrick Mahoney (“Mahoney”). On November 30, 2022, WCA filed this motion for a protective order regarding the deposition of Mahoney. On January 27, 2023, the City filed an opposition. On February 7, 2023, WCA filed a reply.

II.        LEGAL STANDARD

“Before, during, or after a deposition, any party, any deponent, or any other affected natural person or organization may promptly move for a protective order. The motion shall be accompanied by a meet and confer declaration under Section 2016.040.” (Code Civ. Proc. § 2025.420, subd. (a).)

“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. This protective order may include, but is not limited to, one or more of the following directions:

(1) That the deposition not be taken at all.

(2) That the deposition be taken at a different time.

…

(5) That the deposition be taken only on certain specified terms and conditions.

…

(9) That certain matters not be inquired into.

(10) That the scope of the examination be limited to certain matters.

…

(Code Civ. Proc., § 2025.420, subd. (b))

“Where a party must resort to the courts, ‘the burden is on the party seeking the protective order to show good cause for whatever order is sought.’ [Citation.]” (Nativi v. Deutsche Bank National Trust Co. (2014) 223 Cal.App.4th 261, 318.)

III.      DISCUSSION

          WCA moves for a protective order seeking to preclude the City from depositing its president and CEO, Patrick Mahoney. WCA argues Mahoney’s testimony would speak to factual issues that have already been litigated, and Mahoney is protected by the Apex Doctrine.

          WCA first argues there are no factual issues to litigate—that the only remaining issue involves the Court’s interpretation of a fully integrated and unambiguous indemnification agreement. WCA is mistaken. In denying WCA’s motion for summary judgment against the City, the Court stated the following:

First, the court notes that WCA offers no analysis of or support for its first contention—that "services" (as the term is used in the indemnification provision) is limited to those expressly contained in the Agreement. Presumably, WCA is arguing that "services" is equivalent to the defined term "Services" as set forth in paragraph 1 of the Agreement. That paragraph provides that "Services" are "the tasks, obligations, and services set forth in the 'Scope of Services' attached to and incorporated into [the] Agreement as Exhibit A." (Cross-Compl., Ex. A, para. 1.) It is essentially undisputed that the Scope of Services does not explicitly include inspecting and reporting sidewalk damage. (See UMF 4.) But because the defined term "Services" is not used in the indemnification provision, it is ambiguous whether "services" is, in fact, limited to those expressly contained in the Agreement.

In other words, the Court found that the word “services” in the indemnification provision of the Agreement is ambiguous. As an ambiguous term, the Court looks to extrinsic evidence to discern its meaning.

WCA next argues that Mahoney is protected by the Apex Doctrine. Under the Apex Doctrine, to depose a corporate president or other official “at the highest level of corporate management” a party seeking the deposition must show that the corporate officer “has unique or superior personal knowledge of discoverable information.”  (Liberty Mutual Ins. Co. v. Superior Court (1992) 10 Cal.App.4th 1282, 1289.) “We conclude it amounts to an abuse of discretion to withhold a protective order when a plaintiff seeks to depose a corporate president, or corporate officer at the apex of the corporate hierarchy, absent a reasonable indication of the officer's personal knowledge of the case and absent exhaustion of less intrusive discovery methods.” (Id. at 1287.)

Here, WCA provides good cause for the protective order. The City has not shown that Mahoney has unique or superior personal knowledge about the issues still in dispute, and thus the Apex Doctrine applies. As the City correctly maintains, there is still a dispute as to the meaning of “services” within the indemnification provision of the Agreement between the City and WCA. The City argues that the Agreement covers services that are not explicitly listed in the agreement. In support, the City points to a variety of services WCA has provided over the years that are not listed in the Agreement—such as measuring the height and width of trees and inspecting their root collar.

Ostensibly, the City is arguing that reporting the type of sidewalk damage that allegedly caused Plaintiff’s injury was implicitly included in the type of “services” covered by the Indemnification Agreement. (See Ex. 9, RFA No. 8.) Indeed, determining whether WCA regularly reported root damage to sidewalks as part of their services to the City is highly relevant. The problem, however, is the City has not shown that Mahoney has “unique or superior knowledge” of the precise services completed by line-level employees and lower management. As the President and CEO, Mahoney would presumably be able to speak to the high-level contractual negotiations between WCA and the City. On the other hand, mid and low-level supervisors would be best suited to speak to the exact services that WCA customarily provides to the City.

The City points out that it already deposed two persons designated by WCA as most knowledgeable—Ernesto Macias and Victor Gonzalez. In its opposition to this motion, the City cites its dissatisfaction with Macias’s and Gonzalez’s answers as justification for deposing Mahoney. The City offers the following exchange from Gonzalez’s deposition:

Q: Since you did not sign the contract, you did not participate in drafting this contractual provision, what, in your understanding, makes you the person most knowledgeable to testify to testify about these contractual provisions?

A: In my position, I oversee the contracts as far as entering into the contracts with customers to perform the tree maintenance. I did not draft this agreement and I'm not authorized to sign on behalf of West Coast Arborists. (Gonzalez depo: p. 18, ll. 7-18.)

Q: Well, generally speaking, all of the contractual provisions, but I'll be focusing today on a number of them. So I want to make sure that you are familiar with what certain provisions of this contract call you organization to do, what services are required of your organization.

A: I am familiar with some, but not all. (Id., p. 20, ll. 13-19.)

Q: Do you know what factors are considered by WCA when they decide whether or not to enter into a contract with a given municipal, including my client, the City of South Pasadena?

A: I don't know. (Id., p. 24, ll. 15-21.)

A: I provide information to my upper management team.

Q: An who does your upper management team consist of?

A: Patrick Mahoney, Richard Mahoney, Rose Epperson, Any Trotter, Chriss Crippen and Debbie DePasquale.

Q: And all those people that you just named carry the final responsibility as to decisions making whether or not to enter into the contract with the City?

A: I don't know. (Id., p. 22, ll. 22-25, emphasis added.) (See Exhibit 17.)

Not only are these excerpts taken out of context, the Court fails to see how they establish that Mahoney has unique and superior knowledge of what services WCA customarily provide the City—i.e. what services are implicitly included in the Agreement. These excerpts merely establish that Mahoney makes the final determination as to whether to enter into a contract with the City, which as the CEO is not surprising. Conversely, these excerpts support WCA’s assertion that the City is the one who drafted the Agreement.

More importantly, if the City was unsatisfied with Macias or Gonzalez’s unwillingness or inability to answer certain questions, the proper remedy was to file a motion to compel under Code of Civil Procedure section 2025.480. The City, however, chose not to. Pursuant to the Apex Doctrine, the City does not get to skip straight to deposing WCA’s CEO without first showing that Mahoney has “unique or superior knowledge” that would help define the word “services” as its used in the Indemnity Agreement.

Accordingly, the Court issues an order protecting Patrick Mahoney from the notice of deposition issued by the City of South Pasadena. (See Code Civ. Proc. § 2025.420, subd. (a).)

IV.      CONCLUSION

WCA’s motion for a protective order regarding the deposition of Patrick Mahoney is GRANTED.

Moving party to give notice. 

            Parties who intend to submit on this tentative must send an email to the Court at alhdept3@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org.  Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter.  Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue.  If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.