1. law, govt and politics

SUPERIOR COURT, STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
Department 8, Honorable Maureen A. Folan, Presiding
Lorna Delacruz, Courtroom Clerk
Keith Rowan, Court Reporter
191 North First Street, San Jose, CA 95113
Telephone: 408.882.2180
To contest the ruling, call (408) 808-6856 before 4:00 P.M.
LAW AND MOTION TENTATIVE RULINGS
DATE:
FEBRUARY 19, 2015
TIME: 9 A.M.
PREVAILING PARTY SHALL PREPARE THE ORDER
(SEE RULE OF COURT 3.1312)
TROUBLESHOOTING TENTATIVE RULINGS
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LINE #
CASE #
CASE TITLE
RULING
LINE 1
113CV257974 S. Cooper vs. G. Cooper,
et al
Order of Exam
LINE 2
114CV263590 K. Vu, et al vs. America’s Click Control Line 2 for Tentative Ruling
Wholesale Lender, et al
LINE 3
114CV269610 .J Herrera, et al vs. Wells Defendant Wells Fargo Bank N.A’s
Fargo Bank, NA, et al
Demurrer to the Second and Fifth Causes of
Action of the First Amended Complaint is
SUSTAINED WITHOUT LEAVE TO
AMEND. Defendant Wells Fargo Bank
N.A.’s Request for Judicial Notice is
GRANTED. Plaintiff submitted an untimely
opposition which the Court will not consider.
The opposition was due on February 4th and
was not filed until February 17th. This is
UNACCEPTABLE. The Court sustains
defendant’s demurrer without leave to amend
based on all of the arguments asserted in the
moving papers.
LINE 4
114CV272449 L. Bustamante vs. Draper- Off calendar as First Amended Complaint
Harrington Automotive, was filed, mooting the demurrer.
Inc., et al
LINE 5
Click Control Line 5 for Tentative Ruling
114CV263774 State Farm General
Insurance Co. vs. Borges
Security Systems, Inc., et
al
LINE 6
112CV236494 M. Pacheco, et al vs. U.S. Click Control Line 6 for Tentative Ruling
– Sino Investment, Inc., et
al
SUPERIOR COURT, STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
Department 8, Honorable Maureen A. Folan, Presiding
Lorna Delacruz, Courtroom Clerk
Keith Rowan, Court Reporter
191 North First Street, San Jose, CA 95113
Telephone: 408.882.2180
To contest the ruling, call (408) 808-6856 before 4:00 P.M.
LAW AND MOTION TENTATIVE RULINGS
LINE 7
112CV218786 E. Jung, et al vs. Y. Kim
Continued by stipulation to March 3, 2015 at
9 am
LINE 8
113CV252171 L. Cheung vs. K. Tse
Click Control Line 8 for Tentative Ruling
LINE 9
113CV258237 F. Zewoldemariam vs.
City of San Jose
Plaintiff’s counsel’s Motion to be Relieved as
Counsel is UNOPPOSED and GRANTED,
good cause having been shown under CCP
284(2) and CRC 3.1362. The Court will sign
the order submitted by moving party.
LINE 10 114CV261280 V. Lumba vs. M. Miroyan, Click Control Line 10 for Tentative Ruling
et al
LINE 11 114CV262944 L. Santiago, et al vs.
Woodland Park
Apartments, et al
Defendant Equity Residential Properties
Management, Corp., Sandra Bonds and EQR
–Woodland Park, A Limited Partnership’s
Motion for Leave to File a Cross-Complaint
is UNOPPOSED and GRANTED, good
cause having been shown. The proposed
cross-complaint attached as Exhibit A will be
deemed as filed before the Court. Moving
parties are ordered to file and serve the crosscomplaint within 10 days of this order. The
Court will sign the order submitted by
moving parties.
LINE 12 115CV275168 In Re: G. Luevano
Petitioner’s Petition for Approval of Transfer
of Structured Settlement Payment Rights is
UNOPPOSED and GRANTED. Petitioner
has complied with the requisite Insurance
Code mandates. The Court is satisfied Ms.
Luevano’s best interests are served by this
arrangement as she is using the money for
nursing school, yet will still receive $15,000
a year as well as additional sizeable lump
sums in 2020 and 2025.
LINE 13 104CV014918 Retailers National Bank
vs. E. Nelson
The Court does not have a filed claim of
exemption. Plaintiff must appear at the
hearing and provide her claim of exemption
and proof of her denoted expenses as well as
her income.
SUPERIOR COURT, STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
Department 8, Honorable Maureen A. Folan, Presiding
Lorna Delacruz, Courtroom Clerk
Keith Rowan, Court Reporter
191 North First Street, San Jose, CA 95113
Telephone: 408.882.2180
To contest the ruling, call (408) 808-6856 before 4:00 P.M.
LAW AND MOTION TENTATIVE RULINGS
LINE 14 113CV258365 NCEP, LLC vs. D.
Butkovic
The Court has reviewed the claim of
exemption. It appears Judgment Debtor has
about $20 a month taken out of her check for
a charity, United Way. Utilities and
telephone expenses of over $750 a month is
high. The Court feels Judgment debtor can
afford to have $35 a month garnished to help
pay off the Judgment against her in the within
matter.
LINE 15 114CV267897 Mount Vernon Court
Defendant’s Motion to Vacate the Default
Homeowners Association and Permit her to File an Answer is
vs. D. Davis
GRANTED. Defendant, in her declaration,
has demonstrated the requisite mistake,
inadvertence or excusable neglect under CCP
473(a) 2. Shapiro v Clark (2008) 164 Cal
App 4th 1128,1139. The Court declines
plaintiff’s request to impose a penalty upon
plaintiff. Defendant shall file her answer
within 10 days of this order. The Court will
sign the order moving party submitted.
LINE 16 112CV230170 O. Paramo vs. M. Anaya, Reassigned to Dept. 21
et al
LINE 17 113CV242491 Invention Capital Partners Continued to 4/2/15 at 9am per 1/16/15
vs. Phoenix Technologies minute order.
Ltd, et al
LINE 18 113CV245854 V. Nguyen, et al vs. L.
Tang, et al
Off Calendar
LINE 19 114CV260566 T. Turi vs. W. Bier
Reassigned to Dept. 21
LINE 20 112CV226812 Transport funding, LLC
vs. M. Garcia
Return on Bench Warrant
LINE 21
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SUPERIOR COURT, STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
Department 8, Honorable Maureen A. Folan, Presiding
Lorna Delacruz, Courtroom Clerk
Keith Rowan, Court Reporter
191 North First Street, San Jose, CA 95113
Telephone: 408.882.2180
To contest the ruling, call (408) 808-6856 before 4:00 P.M.
LAW AND MOTION TENTATIVE RULINGS
LINE 29
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Case Name: Kim Vu and Tom Cao v. America’s Wholesale Lender, et al.
Case No.:
1-14-CV-263590
Demurrer by Defendants Countrywide Home Loans, Inc. dba America’s Wholesale
Lender, The Bank of New York Mellon fka The Bank of New York, as Trustee for the
Certificate Holders of CWALT, Inc., Alternative Loan Trust 2006-0A11, Mortgage Pass
Through Certificates, Series 2006-0A11, and Mortgage Electronic Registration Systems,
Inc. to the Second Amended Complaint of Plaintiffs Kim Vu and Tom Cao
Factual and Procedural Background
This action arises out of the attempted foreclosure of a residential property located at
15185 Alondra Lane, Saratoga, California (“subject property”). On May 9, 2006, a deed of
trust was recorded in the name of Plaintiffs as security instrument on the subject property for a
Mortgage Note (Adjustable Rate Rider) in the amount of $1,500,000. (See Second Amended
Complaint [“SAC”] at ¶ 12.) The deed of trust lists defendant Countrywide Home Loans, Inc.
dba America’s Wholesale Lender (“Countrywide”) as the lender; CTC Foreclosure Services
Corporation (“CTC”) as Trustee; and Mortgage Electronic Registration Systems, Inc.
(“MERS”) as the beneficiary under the security instrument. (Ibid.) On September 16, 2011,
MERS assigned its interest in the deed of trust to The Bank of New York Mellon (“BONYM”).
(Id. at ¶ 13.) On September 26, 2012, a substitution of trustee was recorded, substituting CTC
with Recontrust Company (“Recontrust”). (Id. at ¶ 14.) On the same day, Recontrust recorded
a notice of default and election to sell under the deed of trust. (Id. at ¶ 15.) After the
recordation of the notice of default, Recontrust recorded a series of notices of trustee’s sale,
which were eventually superseded by the recordation of a notice of rescission of notice of
trustee’s sale on November 6, 2013. (Id. at ¶ 16.)
On November 14, 2014, Plaintiffs filed a SAC, now the operative pleading, against
Defendants alleging the following causes of action: (1) violation of Civil Code sections
2924.17 and 2924.19; and (2) wrongful foreclosure.
On December 19, 2014, Defendants filed a demurrer to the SAC on the ground that the
first and second causes fail to state a claim. (See Code Civ. Proc. § 430.10, subd. (e).) On
February 4, 2015, Plaintiffs filed opposition to the motion.
Demurrer to the SAC
1. Legal Standard
“In reviewing the sufficiency of a complaint against a general demurer, we are guided
by long settled rules. ‘We treat the demurrer as admitting all material facts properly pleaded,
but not contentions, deductions or conclusions of fact or law. We also consider matters which
may be judicially noticed.’” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “A demurrer tests
only the legal sufficiency of the pleading. It admits the truth of all material factual allegations
in the complaint; the question of plaintiff’s ability to prove these allegations, or the possible
difficulty in making such proof does not concern the reviewing court.” (Committee on
Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213–214.)
“The reviewing court gives the complaint a reasonable interpretation, and treats the
demurrer as admitting all material facts properly pleaded. The court does not, however,
assume the truth of contentions, deductions or conclusions of law. … [I]t is error for a trial
court to sustain a demurrer when the plaintiff has stated a cause of action under any possible
legal theory. And it is an abuse of discretion to sustain a demurrer without leave to amend if
the plaintiff shows there is a reasonable possibility any defect identified by the defendant can
be cured by amendment.” (Gregory v. Albertson’s, Inc. (2002) 104 Cal.App.4th 845, 850.)
2. Request for Judicial Notice
Defendants’ request for judicial notice is GRANTED. Exhibits A, B, C, and D
constitute documents filed with the United States Bankruptcy Court and are therefore subject to
judicial notice. (See Evid. Code § 452, subd. (d).) A court may take judicial notice of the
existence of each document in a court file, but can only take judicial notice of the truth of
matters asserted in documents such as orders, findings of fact and conclusions of law, and
judgments. (See Day v. Sharp (1975) 50 Cal.App.3d 904, 914.)
3. Plaintiffs Lack Standing Due to Bankruptcy
With respect to the SAC, Defendants argue that Plaintiffs lack standing to bring each
cause of action because they failed to schedule these claims in their chapter 7 bankruptcy.
Under Code of Civil Procedure section 367, every action must be prosecuted in the
name of the real party in interest, except as otherwise provided by statute. After a person files
for bankruptcy protection, any causes of action previously possessed by that person become the
property of the bankrupt estate. (See Cloud v. Northrup Grumman Corp. (1998) 67
Cal.App.4th 995, 1001.) Any property that is neither abandoned nor administered by the
bankruptcy trustee remains property of the bankruptcy estate. (Id. at p. 1003.) A chapter 7
debtor may not prosecute a cause of action belonging to the bankruptcy estate unless the claim
has been abandoned by the trustee. (See Bostonian v. Liberty Savings Bank (1997) 52
Cal.App.4th 1075, 1081.)
Here, the judicially noticed records reveal that Plaintiffs’ claims against Defendants
were not listed on the asset schedules they filed with the bankruptcy court. In opposition,
Plaintiffs contend that the bankruptcy trustee and the court have been notified of the claims in
this matter and that the chapter 7 case has been reopened. (See OPP at p. 2.) Plaintiffs assert
that the trustee is currently undergoing an evaluation on whether to take authority over the
claims or to abandon them. (Ibid.) However, Plaintiffs’ argument is not supported by
allegations in the SAC or by any documents subject to judicial notice. Thus, the court sustains
the demurrer on this ground.
4. Tender Rule Does Not Apply
Defendants also argue that Plaintiffs cannot maintain this action because they have
failed to allege tender of the amount owed. In general, a plaintiff may not challenge the
propriety of a foreclosure on his or her property without offering to repay the full amount
borrowed against it. (See Karlsen v. American Sav. & Loan Assn. (1971) 15 Cal.App.3d 112,
117; West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 801 [“An allegation of
tender of the indebtedness is necessary when the person seeking to set aside the foreclosure
sale asserts the sale is voidable due to irregularities in the sale notice or procedure.”].) The
tender requirement may also apply to any cause of action that is “implicitly integrated” with an
irregular trustee’s sale. (See Arnolds Mgmt. Corp. v. Eischen (1984) 158 Cal.App.3d 575,
579.)
However, while the tender requirement may apply to causes of action to set aside a
foreclosure sale, it does not apply to actions seeking to prevent a foreclosure sale. (See
Intengan v. BAC Home Loans Servicing, L.P. (2013) 214 Cal.App.4th 1047, 1053-1054; Pfeifer
v. Countrywide Home Loans, Inc. (2012) 211 Cal.App.4th 1250, 1280-1281.) Here, Plaintiffs
do not allege that any foreclosure sale has as yet taken place; rather they seek to prevent
Defendants from proceeding with a foreclosure sale. (See SAC at ¶¶ 17 and 44.) If the
foreclosure sale has not yet occurred, and the court is not called upon to exercise its equitable
powers to overturn a completed sale, then it seems tender of the indebtedness is not yet
required.
5. Plaintiffs Lack Standing to Challenge Securitization of the Loan
With respect to the SAC, Defendants argue that Plaintiffs’ claims are predicated on
theories relating to the securitization of the loan. (See SAC at ¶¶ 24-28.) In particular,
Plaintiffs allege that the securitization failed because transfer of the loan was not effectuated
through timely assignment of the Note and Deed of Trust and thus the assignment violated the
Pooling and Servicing Agreement (“PSA”) and New York trust law. (Ibid.) However,
Plaintiffs lack standing to challenge the process by which their loan was securitized as they
were not parties to the securitization agreements. (See Jenkins v. JP Morgan Chase Bank, N.A.
(2013) 216 Cal.App.4th 497, 515 [a plaintiff lacks standing to enforce any agreements,
including the investment trust’s pooling and servicing agreement, relating to such transaction];
see also Gilbert v. Chase Home Fin., LLC (E.D. Cal. 2013) 2013 U.S. Dist. LEXIS 74772 at p.
*9 [district court found that plaintiffs were not parties to a PSA and do not have standing to
raise violations of a PSA or to otherwise bring claims on the basis that a PSA was violated].)
Thus, the court also sustains the demurrer on this ground.
6. First Cause of Action: Violation of Civil Code Sections 2924.17 and 2924.19
With respect to the first cause of action, Plaintiffs allege that the assignment of the deed
of trust dated September 16, 2011 was “robosigned” in violation of Civil Code section
2924.17. (See SAC at ¶ 31.) They further allege that the “robosigning” of the assignment is a
material violation of Civil Code section 2924.17, entitling them to injunctive relief. (Id. at ¶¶
34-35.)
Civil Code section 2924.17, subdivision (a), states: “[a] declaration recorded …
pursuant to section 2923.5, a notice of default, notice of sale, assignment of a deed of trust, or
substitution of trustee recorded by or on behalf of a mortgage servicer in connection with a
foreclosure subject to the requirements of Section 2924 … shall be accurate and complete and
supported by competent and reliable evidence.” In turn, section 2924.19, subdivision (a)(1),
provides that if a trustee’s deed upon sale has not been recorded, a borrower may bring an
action for injunctive relief to enjoin a “material” violation of sections 2923.5, 2924.17, or
2924.18.
Here, Defendants correctly point out that Plaintiffs’ cause of action fails because it is
premised on the recordation of the allegedly “robo-signed” assignment of the deed of trust in
September 2011. (See SAC at ¶ 31.) Since the Homeowner’s Bill of Rights (the “HBOR”) did
not take effect until January 1, 2013 and does not apply retroactively, the assignment cannot
serve as a basis for the cause of action. (See Rockridge Trust v. Wells Fargo, N.A. (N.D.Cal.
2013) 985 F.Supp.2d 1110, 1152 [the HBOR does not state that it has retroactive effect].)
Also, Civil Code section 2924.19 permits a borrower to bring an action for injunctive
relief to enjoin a material violation under section 2924.17. As stated above, Plaintiffs have not
alleged a proper violation under section 2924.17 or any other facts to support a claim for
injunctive relief. Thus, the court sustains the demurrer to the first cause of action.
7. Second Cause of Action: Wrongful Foreclosure
With respect to the second cause of action, Plaintiffs allege that Defendants do not have
the authority to foreclose on the subject property because the notice of default was premised on
a sham assignment of the deed of trust. (See SAC at ¶¶ 38-39.) Thus, Plaintiffs allege that
defendants BONYM and MERS do not have the authority to foreclose on the subject property.
(Id. at ¶ 40.)
On demurrer, Defendants correctly point out that there is no requirement that a holder
in due course conduct foreclosure proceedings. Under Civil Code section 2924, subdivision
(a)(1), a “trustee, mortgagee, or beneficiary, or any of their authorized agents” may initiate the
foreclosure process. (See Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th
1149, 1155.) “California courts have refused to delay the nonjudicial foreclosure process by
allowing trustor-debtors to pursue preemptive judicial actions to challenge the right, power,
and authority of a foreclosing ‘beneficiary’ or beneficiary’s ‘agent’ to initiate and pursue
foreclosure.” (Jenkins v. JPMorgan Chase Bank, N.A. supra, 216 Cal.App.4th at p. 511.)
These courts reason that allowing a debtor to pursue such an action would interject the courts
into the comprehensive nonjudicial scheme created by the Legislature. (Ibid. [citing Gomes v.
Countrywide Home Loans, Inc. (2011) 193 Cal.App.4th 1149, 1154-1156].)
Here, Plaintiffs allege that Defendants have no authority to initiate a nonjudicial
foreclosure sale because they have no beneficial interest in the property due to the allegedly
sham assignment of the deed of trust. (See SAC at ¶¶ 38-40.) However, the nonjudicial
foreclosure scheme does not “require that the foreclosing party have an actual beneficial
interest in both the promissory note and deed of trust to commence and execute a nonjudicial
foreclosure sale.” (Jenkins v. JPMorgan Chase Bank, N.A. supra, 216 Cal.App.4th at p. 513;
see also Haynes v. EMC Mortgage Corp. (2012) 205 Cal.App.4th 329, 336 [holding that
trustee may initiate foreclosure even if assignment of beneficial interest not recorded].) Thus,
the allegedly sham assignment does not prevent Defendants from foreclosing on the property.
In his opposition, Plaintiff directs the court to the holding in Glaski v. Bank of America
(2013) 218 Cal.App.4th 1079. In that case, the plaintiff alleged that an attempted transfer of
the loan into a securitized trust located in New York was void and that the foreclosing entity
was not the true owner of the loan. Following foreclosure, the plaintiff brought an action for
damages for the alleged wrongful foreclosure. The trial court sustained the defendants’
demurrer and the plaintiff appealed. The Fifth Appellate District reversed, holding that a
borrower may challenge a foreclosure based on specific allegations that an attempt to transfer
the deed of trust was void. (Glaski, supra, 218 Cal.App.4th at p. 1099.)
However, Glaski is distinguishable from this case as it was based on a plaintiff bringing
a post-foreclosure action for damages, not an action to prevent foreclosure. By contrast, this
case is a preemptive action in which Plaintiffs are seeking to prevent the initiation of a
nonjudicial foreclosure. Furthermore, the weight of California state and federal district courts
has soundly rejected Glaski which appears to represent a minority view. (See Jenkins v.
JPMorgan Chase Bank, N.A., supra, 216 Cal.App.4th at pp. 514-516; Newman v. Bank of N.Y.
Mellon (E.D. Cal. 2013) 2013 U.S. Dist. LEXIS 147562 at p. *9, fn. 2 [no courts have yet
followed Glaski and Glaski is in a clear minority on the issue]; Mottale v. Kimball Tirey & St.
John, LLP (S.D. Cal. 2014) 2014 U.S. Dist. LEXIS 3398 at p. *12 [the weight of authority
rejects Glaski as a minority view on the issue of a borrower’s standing to challenge an
assignment as a third party to that assignment].)
Even if the court was inclined to follow the minority position in Glaski, Plaintiffs fail to
allege facts demonstrating that they suffered prejudice. (See Fontenot v. Wells Fargo Bank,
N.A. (2011) 198 Cal.App.4th 256, 272 [a plaintiff in a suit for wrongful foreclosure has
generally been required to demonstrate the alleged imperfection in the foreclosure process was
prejudicial to the plaintiff’s interests]; see also Siliga v. Mortgage Electronic Registration
Systems, Inc. (2013) 219 Cal.App.4th 75, 85 [absent any prejudice, the plaintiffs have no
standing to complain about any alleged lack of authority or defective assignment].) Plaintiffs
do not address the prejudice argument in their opposition.
Therefore, the court sustains the demurrer to the second cause of action.
8. Leave to Amend
Since Plaintiffs provide no basis for further amendment, leave to amend is denied. (See
Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 [plaintiff must show in what manner he can
amend his complaint and how that amendment will change the legal effect of his pleading]; see
also Davies v. Sallie Mae, Inc. (2008) 168 Cal.App.4th 1086, 1097 [appellate court determined
that trial court did not abuse its discretion in sustaining demurrer without leave to amend after
plaintiff had two previous opportunities to amend the complaint].)
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Case Name: State Farm General Insurance Company v. Borges Security Systems, Inc., et al.
Case No.:
1-14-CV-263774
This negligence action arises from a January 4th, 2012 incident in which the home of
Robert and Janice Scott (the “Scotts”) suffered water damage. (See Complaint, p. 4.) Plaintiff
State Farm General Insurance Company (“State Farm”), the Scotts’ insurer, alleges that an
employee of defendants Borges Security Systems, Inc., Rufino Silveira Borges III, Rufino
Silveira Borges IV, and Mary Lena Borges (collectively, “Defendants”) negligently stepped on
and broke two high-pressure water sprinkler lines while working in the Scotts’ attic. (Id.)
State Farm paid the Scotts for their resulting damages and is subrogated to the Scotts’ rights
against the Defendants. (Id.)
State Farm filed this action on April 14, 2014, asserting a single claim for negligence
against Defendants. On December 4, 2014, Defendants moved for summary judgment on the
ground that a limitation of liability clause in their contract with the Scotts limits State Farm’s
damages in this action to $250.
Defendants’ motion fails on procedural grounds. “A defendant seeking summary
judgment must show that at least one element of the plaintiff’s cause of action cannot be
established, or that there is a complete defense to the cause of action.” (Alex R. Thomas & Co.
v. Mutual Service Casualty Ins. Co. (2002) 98 Cal.App.4th 66, 72; see also Code Civ. Proc., §
437c, subd. (p)(2).) Here, Defendants do not attempt to negate any element of State Farm’s
claim for negligence or establish any “complete” defense. Rather, they contend that a
limitation of liability clause caps State Farm’s damages at $250. Since Defendants
acknowledge that they may be liable for up to $250 in damages, it would be inappropriate to
award them summary judgment.
Defendants have not moved for summary adjudication. Even if the Court were inclined
to treat their motion as one for summary adjudication, the applicability of the limitation of
liability clause is not appropriately resolved by such a motion. (See Code Civ. Proc., § 437c,
subd. (f)(1) [“A party may move for summary adjudication … if that party contends that [a]
cause of action has no merit or that there is no affirmative defense thereto, or that there is no
merit to an affirmative defense …, or that there is no merit to a claim for [punitive] damages,
… or that one or more defendants either owed or did not owe a duty to the plaintiff or
plaintiffs.].) While Defendants plead the limitation of liability provision as an affirmative
defense, summary adjudication of an affirmative defense is appropriate only where a party
contends that there is no merit to the defense. Here, Defendants seek a ruling that the
limitation of liability provision does apply.
In light of the above, Defendants’ motion is DENIED.
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Case Name:
Case No.:
Maria Leticia Palacios Pacheco, et al. v. U.S.-Sino Investment, Inc., et al.
1-12-CV-236494
I. Statement of Facts
This action arises out of the death of construction laborer Raul Zapata Mercado
(“Decedent”), and was filed by Decedent’s widow, family members, and coworkers
(collectively, “Plaintiffs”) against defendants including U.S.-Sino Investment, Inc. and Richard
Xin Liu (collectively, “U.S.-Sino”) and Wesley Wun Shyong Chen (“Chen”).
Plaintiffs allege that in the fall of 2011, U.S.-Sino began excavation and foundation
construction on a property in Milpitas owned by Chen. On January 25, 2012, a building
inspector from the City of Milpitas visited the work site and found the excavation and
foundation work to be unsafe. The inspector issued a stop work order for the entire project due
to these dangerous conditions. However, the defendants did not notify the workers at the
Milpitas property—including Decedent—that conditions were unsafe, and instructed them to
continue working. On January 28, 2012, the excavation collapsed, fatally suffocating and
crushing Decedent.
Plaintiffs filed this action on November 21, 2012. They filed the operative first
amended complaint (“FAC”) on January 22, 2013, alleging the following causes of action: (1)
wrongful death (against all defendants); (2) negligence (against all defendants); (3) intentional
infliction of emotional distress (against U.S.-Sino Investment, Inc. and Dan Luo); and (4) wage
claims (against U.S.-Sino Investment, Inc., Dan Luo, and Chen).
II. Discovery Dispute
On October 20, 2014, U.S.-Sino served Loza Construction Inc. (“Loza”) with a
subpoena for the production of business records. The subpoena seeks, inter alia, a broad range
of documents associated with Loza’s employment of plaintiffs Faustino Zapata Mercado
(“Faustino”) and Martin Valenzuela Gaytan (“Gaytan”), Decedent’s co-workers who were
present when Decedent was killed. The parties agree that Loza employed Faustino, Gaytan,
and Decedent, although they dispute whether the three workers were acting as Loza’s
employees when Decedent was killed. 1 On November 15, 2014, Chen served Loza with two
subpoenas for the production of business records seeking identical documents.
During November and December of 2014, Plaintiffs’ counsel raised privacy and related
objections to the Loza subpoenas in emails to counsel for U.S.-Sino and Chen, and counsel met
and conferred concerning the scope of the subpoenas. Counsel for Chen agreed that his
client’s subpoenas were duplicative of U.S.-Sino’s, and stated that Chen would accept a
1
Plaintiffs do not dispute that Loza employed these workers and appear to acknowledge that Loza does possess
employment records for Faustino and Gaytan. (See Sep. Statement ISO Mot., p. 6). While Plaintiffs allege that
Faustino, Gaytan, and Decedent were employed by Chen, Dan Luo, and U.S.-Sino at the time of the accident,
Chen and U.S.-Sino argue that the workers may have been acting as Loza employees. Chen named Loza as a
defendant to his cross-complaint in this action on January 8, 2015, and as a defendant to the related action of Chen
v. US-Sino Investment, Inc., et al. (Super. Ct. Santa Clara County, No. 1-13-CV-245057) on January 6, 2015.
Loza has yet to appear in either action.
response to U.S.-Sino’s subpoena in lieu of responses to his own subpoenas. Counsel for U.S.Sino proposed a series of amendments to its subpoena, which were directed towards narrower
categories of documents and date ranges than the initial subpoenas. Plaintiffs’ counsel
indicated that he would agree to the final proposed amendment so long as counsel further
limited the documents requested to those pre-dating Decedent’s death. However, counsel for
U.S.-Sino would not agree to this restriction.
On December 11, 2014, Plaintiffs filed the instant motion to quash and/or for a
protective order concerning the subpoenas to Loza. On February 4, 2015, U.S.-Sino and Chen
(collectively, the “Opposing Defendants”) filed separate oppositions to Plaintiffs’ motion. In
his opposition, Chen joins in U.S.-Sino’s opposition 2 and seeks monetary sanctions against
Plaintiffs’ counsel. On February 10, 2015, Plaintiffs filed reply papers in support of their
motion.
On February 11, 2015, Chen filed sur-reply papers in opposition to Plaintiffs’ motion,
and on February 13, 2015, Plaintiffs filed sur-sur-reply papers. The Court will not consider
these sur-reply and sur-sur-reply papers given that the parties were not authorized to file them. 3
III. Legal Standard
The court may, “upon motion reasonably made by a [party] … make an order quashing
[a] subpoena entirely, modifying it, or directing compliance with it upon those terms or
conditions as the court shall declare, including protective orders.” (Code Civ. Proc. (“CCP”), §
1987.1, subds. (a) and (b)(1).) In addition, the court may make “any other order as may be
appropriate to protect the [moving party] from unreasonable or oppressive demands,” including
unreasonable violations of his or her right to privacy. (Id.)
IV. The Subpoenas
The disputed requests from the subpoena by U.S.-Sino and the subpoenas by Chen are
for:
Any and all records pertaining to [Faustino or Gaytan, respectively] related to
any employment of him by you, including without limitation employment
applications, resumes, references, dates of employment, proof of
citizenship/employability in the United States, employment eligibility
verification forms, including but not limited to U.S. Citizen and Immigrations
Services Form I-9, W-2s, pay stubs or other records of payment, health
insurance, entities, persons or companies to [whom] he has provided labor or
services through his relationship with you, performance evaluations and
2
It is common practice for parties to join in each other’s arguments simply by filing papers indicating that they
are doing so. This procedure is generally permitted, except with respect to motions for summary judgment. (See
Barak v. Quisenberry Law Firm (2006) 135 Cal.App.4th 654, 660-661).
3
California Rules of Court, rule 3.1300(a) provides that, “[u]nless otherwise ordered or specifically provided by
law, all moving and supporting papers must be served and filed in accordance with Code of Civil Procedure
section 1005.” Code of Civil Procedure section 1005 authorizes the filing of moving papers 16 days prior to a
noticed hearing, opposition papers 9 days prior to the hearing, and reply papers 5 days prior to the hearing.
Section 1005 does not authorize the filing of sur-replies.
reviews, illnesses, vacation time, sick time, worker’s compensation claims, job
duties, job descriptions, types of work performed, skills, union affiliation, hours
worked, wage or salary information, for the entire period of his employment
with you, including to the present if he is presently employed by you.
V. Plaintiffs’ Motion
Plaintiffs move to quash the subpoenas on the grounds that the subpoena by U.S.-Sino
does not comply with CCP sections 1985.3 and/or 1985.6 and all of the subpoenas seek private
and/or privileged documents that are not relevant to this action.
A. CCP Sections 1985.3 and 1985.6
Pursuant to CCP sections 1985.3 and 1985.6, a subpoenaing party requesting the
personal records of a consumer or the employment records of an employee, respectively, must
serve the consumer or employee with a copy of the subpoena and a notice of privacy rights.
(CCP, §§ 1985.3 and 1985.6, subds. (b) and (e).) Plaintiffs contend that their counsel did not
receive notices to Faustino or Gaytan from U.S.-Sino, although they received notices to other
plaintiffs whose records were subpoenaed by U.S.-Sino.
However, U.S.-Sino’s notice, which was directed to “Maria Leticia Palacios Pacheco,
et al.” in the care of Plaintiffs’ counsel and was accompanied by a copy of the subpoena at
issue, was clearly addressed to all of the plaintiffs whose records were encompassed by the
subpoena. Service upon Plaintiffs’ counsel was proper. (See CCP, §§ 1985.3 and 1985.6,
subds. (b)(1).) Plaintiffs provide no support for the proposition that U.S.-Sino was required to
serve multiple copies of this notice where the impacted plaintiffs were represented by the same
counsel, and such a requirement would serve no practical purpose.
Plaintiffs’ argument regarding sections 1985.3 and 1985.6 accordingly lacks merit.
B. Privacy and Related Objections
Plaintiffs raise a number of privacy and related objections to the production of the
documents encompassed by the subpoenas. The Court will address the categories of
documents at issue in turn.
1. Wage and Hour Information
First, Plaintiffs argue that the subpoenas improperly seek tax and pay records,
comprising “W-2s, pay stubs or other records of payment,” records concerning “hours
worked,” and “wage or salary information.” As urged by Plaintiffs, such records are protected
by the privilege against the disclosure of tax returns, the right to privacy in one’s financial
affairs, and/or the right to privacy in one’s personnel records. (See Brown v. Super. Ct.
(Executive Car Leasing, Inc.) (1977) 71 Cal.App.3d 141, 142 [W-2 forms and other documents
integral to tax returns are within the tax return privilege]; Fortunato v. Super. Ct. (Ingrassia)
(2003) 114 Cal.App.4th 475, 480-481 [confidential financial information is protected by the
right to privacy]; San Diego Trolley, Inc. v. Super. Ct. (Kinder) (2001) 87 Cal.App.4th 1083,
1097 [an employee’s personnel records are protected by the right to privacy].)
As urged by the Opposing Defendants, neither the tax return privilege nor the right to
privacy is absolute. (See Fortunato v. Super. Ct., supra, 114 Cal.App.4th at p. 481 [right to
privacy must be balanced against the need for discovery; waiver of the tax return privilege is
appropriately considered in light of the right to privacy].) However, to obtain discovery where
a serious invasion of the right to privacy is shown, the proponent of discovery must
demonstrate that the information sought is “directly relevant” to a claim or defense, and
“essential to the fair resolution of the lawsuit.” (Britt v. Super. Ct. (San Diego Unified Port
District) (1978) 20 Cal.3d 844, 859; see also Binder v. Super. Ct. (Neufeld) (1987) 196
Cal.App.3d 893, 901 [holding that “direct relevance” requires something more than an
assertion that the requested discovery might lead to admissible evidence].) Once direct
relevance has been demonstrated, the proponent of discovery must also show that the
information sought is not available through less intrusive means. (Allen v. Super. Ct.
(Sierra) (1984) 151 Cal.App.3d 447, 449.) The court must then carefully balance the right to
privacy against civil litigants’ right to discovery. (Pioneer Electronics, Inc. v. Super. Ct.
(Olmstead) (2007) 40 Cal.4th 360, 371.)
Plaintiffs argue that Faustino and Gaytan’s wage and hour information is irrelevant to
this action, because these plaintiffs do not bring prospective claims for lost wages. In their
opposition papers, the Opposing Defendants withdraw their requests for Faustino and Gaytan’s
W-2s, but defend their requests for records evidencing Faustino and Gaytan’s hours worked, as
well as their payment and salary information. (See
U.S.-Sino’s Opp., pp. 5, 10; Chen’s Opp., p. 13.)
The Opposing Defendants concede that Faustino and Gaytan are not making
prospective wage loss claims. (See U.S.-Sino’s Opp., p. 8; Chen’s Opp., pp. 8-9 [Faustino and
Gaytan are not “presently” seeking lost income].) Nevertheless, they contend that Faustino and
Gaytan’s records are relevant to certain plaintiffs’ claims for loss of financial support from
Decedent. The Opposing Defendants argue that, since Faustino and Gaytan were also
employed by Loza, any reduction in work available to these plaintiffs following Decedent’s
accident would also have impacted Decedent’s earnings. However, while information
concerning a general reduction of available hours at Loza may be relevant to Decedent’s future
earnings, the Opposing Defendants’ argument does not establish that Faustino and Gaytan’s
individual records are directly relevant to claims for loss of Decedent’s financial support.
There is no indication that Faustino and Gaytan’s information is more relevant than that of
Loza employees in the aggregate, and it would appear that the Opposing Defendants can
discover information concerning available hours at Loza by propounding more generalized
discovery requests, without the need to compromise Faustino and Gaytan’s privacy interests.
The Opposing Defendants further argue that the pay records they seek are relevant to
Faustino and Gaytan’s claims for emotional distress, noting that Gaytan testified that his
emotional distress affected his job performance and both plaintiffs state that they require
further care and treatment that they cannot afford. However, Faustino and Gaytan assert
simple bystander emotional distress claims (see FAC, ¶¶ 10, 12, 75), which do not require a
showing of lost wages or financial need. (See Thing v. La Chusa (1989) 48 Cal.3d 644, 667668 [setting forth the elements of a bystander emotional distress claim].) While records of
Faustino and Gaytan’s hours worked and income after the accident may have some tangential
relevance to the severity of their ongoing emotional distress, this information is not directly
relevant thereto or essential to the fair resolution of their claims.
Finally, the Opposing Defendants contend that Faustino and Gaytan’s wage and hour
records are needed to show that Loza was their employer at the time of the accident. Plaintiffs
respond that the Opposing Defendants should propound more generalized discovery upon Loza
concerning this issue. However, the Court agrees with the Opposing Defendants that Faustino
and Gaytan’s pay records from Loza pertaining to the relevant time period of January 2012 4
are critical evidence regarding whether Loza employed them on the project at issue. In
addition, although the Opposing Defendants merely allude to this issue, Faustino and Gaytan
do seek to recover their wages from January 26-28, 2012, which they allege were never paid.
(See FAC, ¶ 46.) Wage and hour records from this period are essential to this claim as well.
Consequently, the Court will permit discovery of Faustino and Gaytan’s pay records
reflecting their work performed during January 2012. In all other respects, the Opposing
Defendants have failed to establish their entitlement to Faustino and Gaytan’s wage and hour
records.
4
U.S.-Sino states that Faustino, Gaytan, and Decedent commenced work on the project at issue on January 17,
2012. (See U.S.-Sino’s Opp., p. 9.) Decedent’s accident occurred on January 28, 2012.
2. Immigration-Related Records
The subpoenas also seek certain immigration-related records, namely, “proof of
citizenship/employability in the United States” and “employment eligibility verification forms,
including but not limited to U.S. Citizen and Immigrations Services Form I-9.” These requests
implicate Faustino and Gaytan’s rights to privacy in their personnel files. Given that Faustino
and Gaytan do not seek prospective lost wages, their eligibility for future employment is not
relevant to their claims, and the Opposing Defendants indicate that they no longer seek these
records. (U.S.-Sino’s Opp., pp. 5, 10; Chen’s Opp., p. 13.)
Accordingly, the Opposing Defendants do not establish a need to discover Faustino and
Gaytan’s immigration-related records.
3. Health Records
Plaintiffs further object to the subpoena’s requests for records related to Faustino and
Gaytan’s “health insurance, … illnesses, vacation time, sick time, [and] worker’s compensation
claims.” These requests implicate Faustino and Gaytan’s privacy interests in information
related to their medical histories (see Board of Med. Quality Assurance v. Gherardini (1979)
93 C.A.3d 669, 679), as well as their privacy rights in their personnel files.
U.S.-Sino withdraws its requests for these records in its opposition papers; however,
Chen indicates that he continues to seek Faustino and Gaytan’s “health information.” (U.S.Sino’s Opp., pp. 5, 10; Chen’s Opp., p. 13, fn.4.) Chen argues that such information is relevant
and not privileged because Faustino and Gaytan “have placed in issue claims regarding a
shoulder injury and claims for future care and treatment of this injury as well as mental and
emotional injuries as a result of the accident.” (Chen’s Opp., p. 11.)
Where medical information is directly relevant to a plaintiff’s claims and essential to
the fair resolution of his or her lawsuit, some courts have stated that the plaintiff has “waived”
his or her privacy rights in the information at issue. (See Vinson v. Super. Ct. (Peralta
Community College District) (1987) 43 Cal.3d 833, 842.) However, such “waiver” is narrowly
construed, and does not authorize probing into areas that are not directly relevant to the
plaintiff’s claim. (Id.) Thus, while plaintiffs “may not withhold information which relates to
any physical or mental condition which they have put in issue by bringing [a] lawsuit, they are
entitled to retain the confidentiality of all unrelated medical or psychotherapeutic treatment
they may have undergone in the past.” (Britt v. Super. Ct., supra, 20 Cal.3d at p. 864
[addressing the related issue of waiver of physician-patient or psychotherapist-patient
privileges].)
Here, Faustino does claim damages resulting from an injury to his right shoulder and
arm, and Plaintiffs concede that health records related to his right shoulder and arm are
discoverable. (See Mot., p. 7.) In addition, both Faustino and Gaytan claim ongoing emotional
distress damages. (See FAC, ¶¶ 58, 76.) However, Chen does not contend that either plaintiff
has placed any specific mental or emotional condition in issue. It is Chen’s burden to
demonstrate that the discovery he seeks is relevant to such a condition, and Chen has failed to
meet that burden here. (See Tylo v. Super. Ct. (Spelling Entertainment Group, Inc.) (1997) 55
Cal.App.4th 1379, 1388 [before defendants can obtain discovery regarding other potential
sources of emotional distress, “they must first identify the specific emotional injuries which [a
plaintiff] claims resulted from [their actions] and then demonstrate there is a nexus” to the
discovery sought].)
In light of the above, Chen has demonstrated the Opposing Defendants’ need to
discover health records concerning Faustino’s right shoulder and arm, but not other health
records.
4. Other Employment Records
Finally, the subpoenas seek other employment records, comprising “employment
applications, resumes, references, dates of employment, … entities, persons or companies to
[whom Faustino and Gaytan have] provided labor or services through [their] relationship[s]
with you, performance evaluations and reviews, … job duties, job descriptions, types of work
performed, skills, [and] union affiliation ….” Plaintiffs correctly argue that individuals’
employment history (see Alch v. Super. Ct. (Time Warner Entertainment Co.) (2008) 165
Cal.App.4th 1412, 1427), personnel records (see San Diego Trolley, Inc. v. Super. Ct. (Kinder)
(2001) 87 Cal.App.4th 1083, 1097), and union membership information (see UFW of Am. v.
Super. Ct. (Maggio, Inc.) (1985) 170 Cal.App.3d 391, 394-395) are protected from disclosure
absent a showing of direct relevance.
As an initial matter, it appears that the Opposing Defendants have withdrawn their
requests for records related to “entities, persons or companies to [whom Faustino and Gaytan
have] provided labor or services through [their] relationship[s] with you” and “performance
evaluations and reviews.” (See U.S.-Sino’s Opp., p. 10; Chen’s Opp., p. 13.) Consequently,
the Court will not order their production.
With respect to the remaining employment records, the Opposing Defendants rely on
their previously-discussed arguments that Faustino and Gaytan’s wage and hour records are
relevant to plaintiffs’ claims for loss of financial support from Decedent, Faustino and
Gaytan’s claims for emotional distress, and Loza’s employment of Faustino and Gaytan at the
time of the accident. The first two arguments fail for the reasons already discussed. As to the
third argument, it does not appear to be disputed that Loza employed Faustino and Gaytan at
the time of the accident, only that they were working on the job at issue in this capacity. The
Opposing Defendants will have access to Faustino and Gaytan’s wage and hour records from
the time of the incident in order to address this issue. However, they do not explain why other,
more general information from Faustino and Gaytan’s personnel files is required to determine
whether they acted as Loza employees on this particular job. This information—“employment
applications, resumes, references, dates of employment, … job duties, job descriptions, types
of work performed, skills, [and] union affiliation ….”—does not appear to be directly relevant
to that issue.
The Opposing Defendants consequently fail to establish that discovery of additional
information from Faustino and Gaytan’s personnel files is warranted.
C. Protective Order
Finally, Plaintiffs move for a protective order. The party moving for such
an order bears the burden of demonstrating good cause therefore. (See Fairmont Ins. Co. v.
Super. Ct. (Stendell, et al.) (2000) 22 Cal.4th 245, 255, citing Goodman v. Citizens Life & Cas.
Ins. Co. (1967) 253 Cal.App.2d 807, 819.) Plaintiffs do not explain or support their motion for
a protective order, and the proposed order they submitted to the Court does not incorporate
such an order.
Plaintiffs’ motion for a protective order is consequently DENIED.
VI. Chen’s Request for Monetary Sanctions
Chen requests $2,000 in monetary sanctions against Plaintiffs’ counsel pursuant to CCP
section 1987.2, subdivision (a), which provides that “the court may in its discretion award the
amount of the reasonable expenses incurred in making or opposing” a motion to quash, “if the
court finds the motion was made or opposed in bad faith or without substantial justification.”
Here, Plaintiffs’ motion was largely successful, and there is no indication that Plaintiffs
acted in bad faith or without substantial justification in filing it. While the Court appreciates
the Opposing Defendants’ efforts to narrow the scope of the subpoenas at issue through meet
and confer, Plaintiffs appear to have contributed to this process in good faith, and were not
required to agree to the Opposing Defendants’ proposals when the parties reached an impasse.
Chen’s request for sanctions is accordingly DENIED.
VII. Conclusion and Order
Plaintiffs’ motion is GRANTED IN PART AND DENIED IN PART. The motion is
DENIED to the extent that the subpoenas seek (1) Faustino and Gaytan’s pay stubs or other
records of payment pertaining to their work performed during January 2012 and other records
of their hours worked and work performed during that month and (2) any health records
concerning Faustino’s right shoulder and arm. Loza shall produce these records to counsel for
the Opposing Defendants within 20 calendar days of the filing of this order. Plaintiffs’ motion
for a protective order is also DENIED. Plaintiffs’ motion to quash is otherwise GRANTED.
Chen’s request for monetary sanctions is DENIED.
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Case Name: Levania Yue Juan Cheung v. Kent Kin Sun Tse, et al.
Case No.:
1-13-CV-252171
This is an action to recover an alleged debt. On November 17, 2014, the Court denied
plaintiff Levania Yue Juan Cheung’s (“Plaintiff”) motion for summary adjudication of her
third and fourth causes of action for restitution and money had and received. The Court found
that Plaintiff met her initial burden to demonstrate that defendant Kent Kin Sun Tse
(“Defendant”) owed her $40,000. However, Defendant presented a declaration stating that
when Plaintiff, the mother of his children, gave him the $40,000, she never indicated that she
would want the money back. This evidence suggested that the $40,000 was a gift, and raised a
triable issue of material fact as to both claims at issue in the motion for summary adjudication.
On November 26, 2014, Plaintiff filed a motion for reconsideration of the Court’s
order. Plaintiff asserts that on November 10, 2014, Defendant produced an “I.O.U.” that
proves that the $40,000 was not a gift. (Code Civ. Proc., § 1008, subd. (a).)
I. Requirements of Section 1008
Code of Civil Procedure section 1008 represents the Legislature’s attempt to regulate
what the Supreme Court has referred to as “repetitive motions” that call upon a court to revisit
questions that it has already addressed. (See Standard Microsystems Corp. v. Winbond
Electronics Corp. (2009) 179 Cal.App.4th 868, 885.) It “requires that any such motion be (1)
filed within 10 days after service upon the party of written notice of entry of the order of which
reconsideration is sought, (2) supported by new or additional facts, circumstances or law, and
(3) accompanied by an affidavit detailing the circumstances of the first motion and the respects
in which the new motion differs from it.” (Ibid.)
Here, Plaintiff satisfies the first and third requirements, and Defendant does not argue
otherwise. With respect to the second requirement, motions for reconsideration are restricted
to circumstances where a party offers the court some fact or circumstance not previously
considered, and some valid reason for not offering it earlier. (See Baldwin v. Home Sav. of
America (1997) 59 Cal.App.4th 1192, 1198.) The burden under section 1008 “is comparable
to that of a party seeking a new trial on the ground of newly discovered evidence: the
information must be such that the moving party could not, with reasonable diligence, have
discovered or produced it at the trial.” (New York Times Co. v. Super. Ct. (Wall St. Network,
Ltd.) (2005) 135 Cal.App.4th 206, 212-213.)
The document that Plaintiff characterizes as an “I.O.U.” is an unexecuted agreement
between the parties entitled a “Mutual Release Agreement.” (Decl. of Levania Yue Juan Chen
ISO Mot., Ex. 2.) It was produced by Defendant well after the Court had taken Plaintiff’s
motion under submission. As urged by Defendant, Plaintiff acknowledges that she first saw
this document on July 17, 2013. (See Chen Decl., ¶ 4.) However, in December 2013, Plaintiff
served Defendant with a request for production seeking “[t]he ‘I.O.U.’ which Defendant
showed to Plaintiff in late July or early August 2013 which memorialized Plaintiff’s September
2011 loan of $40,000 to Defendant.” (See Decl. of Andrew Steinfeld ISO Mot., ¶ 12, Ex. 3,
Request No. 6.) Defendant responded by objecting that the request was vague, ambiguous, and
unintelligible due to its use of the term “I.O.U.” and stating that no such document was in his
possession or control. (See Steinfeld Decl., ¶ 12, Ex. 4, Response to Request No. 6.)
Defendant contends that the disputed document is not an “I.O.U.,” and asserts that he did not
produce it in response to Plaintiff’s request because he did not understand the request.
The Court seriously doubts this assertion. Given that Defendant must have known that
he showed Plaintiff the “Mutual Release Agreement” and specifically objected to Plaintiff’s
use of the term “I.O.U.” in her request for production, it appears likely that Defendant knew
that the request referred to the “Mutual Release Agreement.” However, rather than producing
that document while objecting to its characterization as an “I.O.U.,” Defendant stated that he
did not have the document in his possession or control. The conclusion that Defendant knew
that Plaintiff was seeking the “Mutual Release Agreement” is further supported by Plaintiff’s
February 2014 production of instant messages between the parties discussing the agreement, in
which Plaintiff specifically referred to it as an “I.O.U.,” and Defendant’s service of requests for
admissions that discussed the agreement in specific terms and referred to it as an “I.O.U.” (See
Steinfeld Decl., ¶ 13, Ex. 6, Response to Request No. 10, ¶ 15, Ex. 7, Request Nos. 89-94.)
Regardless of the truth of Defendant’s assertion, the issue for the Court is whether
Plaintiff exercised reasonable diligence in attempting to discover the document. While it may
have been prudent to use a more neutral term in her request for production, Plaintiff was
entitled to rely on Defendant’s statement that he did not have such a document in his
possession or control. Nevertheless, she continued to follow up on her request, including by
serving an abundantly clear supplemental request for production seeking “[t]he ‘I.O.U.’
entitled ‘Mutual Release Agreement’ … as set forth in Defendant’s Request for Admissions
…,” while Defendant continued to avoid acknowledging his possession of the document until
Plaintiff prepared to file a motion to compel. (See Steinfeld Decl., ¶¶ 16-19, Exs. 8-12.)
Plaintiff was thus reasonably diligent in her efforts to obtain the agreement.
Finally, Defendant argues that there is no evidence that the $40,000 referenced by the
“Mutual Release Agreement” is the same $40,000 that Plaintiff either loaned or gifted to
Defendant, and the document is consequently “collateral” to the motion to summary
adjudication decided by the Court. (See Gilberd v. AC Transit (1995) 32 Cal.App.4th 1494,
1500 [“a ‘new’ or ‘different’ fact or circumstance wholly collateral to the merits of the initial
motion” is insufficient to warrant reconsideration].) However, Plaintiff’s declaration stating
that the “Mutual Release Agreement” pertains to the $40,000 she lent Defendant is sufficient
evidence on this point. (See Chen Decl., ¶ 4.)
In light of the above, Plaintiff has satisfied the threshold requirements of Code of Civil
Procedure section 1008, subdivision (a), and her motion for reconsideration is GRANTED.
II. Analysis
Having found that the “Mutual Release Agreement” constitutes new evidence
concerning the $40,000 at issue, the Court must determine whether its earlier ruling should be
modified in light of this document.
As an initial matter, Defendant correctly argues that the “Mutual Release Agreement” is
an inadmissible settlement offer. (See Evid. Code, § 1152 [settlement offers and negotiations
inadmissible to prove liability].) On its face, the document states that it “is intended to settle
any and all … claims [extraneous to child custody, visitation, and support] that [Plaintiff] may
have against [Defendant], and any and all such claims that [Defendant] may have against
[Plaintiff], including, but not limited to, claims arising from contract ….” (Chen Decl., Ex. 2,
p. 1.) Plaintiff does not dispute that the “Mutual Release Agreement” is a settlement offer, but
argues that the document is nonetheless admissible because she offers it to impeach
Defendant’s testimony that the $40,000 was a gift, rather than to prove Defendant’s liability.
However, the ultimate purpose of this “impeachment” is to prove Defendant’s liability for the
$40,000; Plaintiff cannot avoid the application of section 1152 by couching her argument in
terms of impeachment. 5 (See C & K Engineering Contractors v. Amber Steel Co. (1978) 23
Cal.3d 1, 13 [statements made during settlement negotiations that would have impeached a
witness’s testimony were inadmissible under section 1152].)
Furthermore, even if the Court considered the “Mutual Release Agreement,” it does not
reflect an admission by Defendant that he owed Plaintiff $40,000. In fact, the agreement
expressly provides that it “is not to be construed as an admission on the part of either party
regarding any of the facts or circumstances of their relationship. Each party expressly denies
any such liability or wrong doing.” (Chen Decl., Ex. 2, p. 2.) While the agreement may lend
some support to Plaintiff’s argument that the $40,000 was a loan, on summary judgment, it
would be improper for the Court to weigh this evidence against Defendant’s testimony that
Plaintiff never indicated that the money was a loan. (See Melorich Builders v. Super. Ct.
(Serabia, et al.) (1984) 160 Cal.App.3d 931, 935 [the court does not weigh evidence on
summary judgment].)
In light of the above, the Court reaffirms its order denying Plaintiff’s motion for
summary adjudication. (See Corns v. Miller (1986) 181 Cal.App.3d 195, 202 [“If the
requirements [of section 1008] have been met to the satisfaction of the court but the court is not
persuaded the earlier ruling was erroneous, the proper course is to grant reconsideration and to
reaffirm the earlier ruling.”].)
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5
In Carney v. Santa Cruz Women Against Rape (1990) 221 Cal.App.3d 1009, 1023-1024, cited by Plaintiff, an
apology letter from a woman who had accused the plaintiff of rape was admitted in a defamation case as evidence
that statements published by the defendant were false. This case does not support Plaintiff’s theory that there is an
“impeachment” exception to Evidence Code section 1152 where the testimony to be impeached pertains to
liability.
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Case Name: Lumba v Miroyan
Case No. 114CV261280 and 114CV267302
Cross-Defendants’ Motion to Dismiss Cross-Complaint
I. Statement of Facts.
Plaintiff and Cross-Defendant Vijay K. Lumba (“V. K. Lumba”) brought two separate actions
seeking repayment of an unsecured loan of $385,000 based on a promissory note. On February
25, 2014, Case # 114CV261280 was filed, naming Sperry Road Business Center, LLC
(“SRBC”), Vitoil Corporation (“VC”), Valeri Grigoriants (“Grigoriants”), and Michael H.
Miroyan (“Miroyan”) as defendants. On June 30, 2014 Case #114CV267302 was filed, naming
Golden Eagle Investments, LLC (“GEI”) as defendant. The two actions were consolidated on
September 3, 2014, designating Case #114CV261280 as the lead case.
After V. K. Lumba filed a first amended complaint on February 12, 2014, Miroyan filed an
answer and cross-complaint on August 1, 2014, naming V. K. Lumba, V. K. Lumba & Martha
I. Lumba, as Co-Trustees of the Lumba Family Trust (collectively, “the Lumbas”) as crossdefendants.
On October 23, 2014, the Court sustained a demurrer against Miroyan’s cross-complaint with
ten days’ leave to amend. Subsequently, all complaints and cross-complaints filed in the
consolidated actions were dismissed at the request of parties, except for Miroyan’s crosscomplaint.
The Lumbas filed the instant motion to dismiss the cross-complaint filed by Miroyan, on the
ground that Miroyan failed to timely amend the cross-complaint within the time limit
prescribed in the Court’s October 23, 2014 Order sustaining the Lumbas’ demurrer to the
cross-complaint. The Lumbas cite Code of Civil Procedure § (“CCP”) 581(f)(2) in support of
their motion. The Lumbas also argue that “the subject of the former Cross-Complaint is itself
moot because its entire legal and factual predicate was Mr. Lumba’s pursuit of this collection
Action; which has since been dismissed entirely.”
Miroyan did not file a formal opposition to the motion. The Lumbas filed a reply memorandum
in support of their motion, pointing out the absence of a formal opposition having been filed or
served by Miroyan, and reiterating their request for dismissal of the cross-compliant.
II. Legal Standard and Analysis.
“[CCP 581(f)(2)] ‘… gives the defendant the right to obtain a court order dismissing the action
with prejudice once the court sustains a demurrer with leave to amend and the plaintiff has not
amended within the time given.’” (Cano v. Glover (2006) 143 Cal.App.4th 326, 330; citations
omitted.)
The court records in this case show that the Lumbas’ demurrer to Miroyan’s cross-complaint
was sustained with 10 days’ leave to amend. The order sustaining the demurrer was filed, and
the court clerk served copies on Miroyan on October 23, 2014. The service was completed by
mailing copies of the order to Miroyan’s P.O. Box address and the Santa Clara County Jail
where Miroyan was incarcerated at the time. The Lumbas also filed a notice of entry of order
and served the same on Miroyan at his P.O. Box address and the Santa Clara County Jail on
October 28, 2014.
Subsequently, on November 13, 2014, Miroyan filed a motion for stay of all proceedings
pending his release from jail, which Miroyan indicated was due before the end of 2014. But the
Court denied the request in an order issued on December 23, 2014. It is now more than six
weeks since the end of 2014, and almost four months since the demurrer to the cross-complaint
was sustained. No amended cross-complaint is filed up until now.
Notice of motion is not required in order for a party to obtain dismissal of an action under CCP
581(f)(2); but the court cannot dismiss without the request of a party. (Oppenheimer v.
Deutchman (Super. 1955) 132 Cal.App.2d Supp. 875, 879; Dumm v. Pacific Valves (1956) 146
Cal.App.2d 792, 795-96; Wilburn v. Oakland Hosp. (1989) 213 Cal. App. 3d 1107, 1110.)
“The underlying reason for allowing dismissal without notice after failure to amend is that the
losing party has already been entitled to a full hearing on the merits.” (Wilburn v. Oakland
Hosp. supra, 213 Cal. App. 3d 1107, 1110; citations and footnote omitted.)
Nonetheless, the Lumbas filed a noticed motion in requesting dismissal of the cross-complaint.
The notice of motion and supporting documents were properly served on Miroyan both at his
P.O. Box address and the Santa Clara County Jail.
But ultimately, “[t]he decision to dismiss an action under [CCP 581(f)(2)] rests in the sound
discretion of the trial court [….]” (Gitmed v. General Motors Corp. (1994) 26 Cal.App.4th
824, 827; citing Harding v. Collazo (1986) 177 Cal.App.3d 1044, 1054.)
In the exercise of its discretion in the present case, the Court has given particular attention to
the fact that Miroyan has for some time been incarcerated at the Santa Clara County Jail. It has
been held that considerations of due process and equal protection both under state and federal
constitutions require that prisoners be given a meaningful opportunity to be heard in civil
actions that threaten their property interests. (Payne v. Super. Ct. (1976) 17 C.3d 908, 922.)
“[A person’s] incarceration may not deprive him of meaningful access to the courts if he is
indigent and the litigation involves a bona fide threat to his property interests.” (Wantuch v.
Davis (1995) 32 Cal. App. 4th 786, 795-796.)
“Remedies to secure access may include: (1) deferral of the action until the prisoner is
released; (2) appointment of counsel for the prisoner; (3) transfer of the prisoner to court; (4)
utilization of depositions in lieu of personal appearances; (5) holding of trial in prison; (6)
conduct of status and settlement conferences, hearings on motions and other pretrial
proceedings by telephone; (7) propounding of written discovery; (8) use of closed circuit
television or other modern electronic media; and (9) implementation of other innovative,
imaginative procedures.” (Id., at 792-793; internal citations and footnotes omitted.)
The records in the present case show that Miroyan has been able to prepare and file pleadings
while incarcerated. He has not raised any lack of cooperation on the part of jail authorities in
facilitating his efforts in the prosecution of this civil action. The Court also provided Miroyan
reasonable accommodations to ensure that he had a meaningful access to the court and a fair
opportunity to be heard. In addition to waiving filing and other court fees, Miroyan has also
been granted leave to appear telephonically via Court Call or by any other telephonic means
that complies with jail security.
Most importantly, by his own representation, Miroyan was due to be released from jail “before
the end of 2014.” More than six weeks have passed since then; and Miroyan has not filed an
amended cross-complaint, nor has he filed a formal opposition to the instant motion to dismiss
his cross-complaint. There is no indication or communication from Miroyan showing that his
expected release date has been extended.
It is therefore reasonable to conclude that Miroyan’s past incarceration at the Santa Clara
County Jail was not the reason for his failure to timely amend his cross-complaint and/or file a
formal opposition to the Lumbas’ motion to dismiss the cross-complaint. In the absence of
evidence to the contrary, the Court has no option but to grant the motion to dismiss.
III. Conclusion and Order.
The motion of Plaintiff and Cross-Defendant V. K. Lumba and Cross-Defendants V. K. Lumba
& Martha I. Lumba, as Co-Trustees of the Lumba Family Trust, is GRANTED and Michael H.
Miroyan’s Cross-Complaint is DISMISSED WITH PREJUDICE.
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