Tattersalls LTD. v. Wiener

Opinion

I 9 map eee 3 FEED 4 NOV 26 2019 GLERK US OISTRICT COURT 6 SOUTHER CHET? OF By □□ phone te □□□□ □□□ 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 || TATTERSALLS LTD.,, incorporated in ‘Case No.: 17cv1125-BTM(KSC) 12 England, Plaintiff ORDER DENYING PLAINTIFF'S 13 □ REQUEST FOR A PROTECTIVE i4 ||” ORDER AS TO THE DEPOSITION GERALD WIENER, aka GERALD H. OF DAVID ANDERSON WIENER, an individual, et al., 16 [Doc. No. 98.] Defendants. 17 18 On November 15, 2019, the parties filed a document entitled Joint Motion for 19 Protective Order re David Anderson. [Doc. No. 98, at pp. 1-12.] Although submitted as 20 ||a single docket entry, the Joint Motion is two separate documents. The first eight (8) 21 ||pages were submitted by plaintiff [Doc. No. 98, at pp. 1-9], and another 5 pages were 22 submitted by defendants [Doc. No. 98, at pp. 12-16.] Plaintiffs counsel also submitted a 23 declaration and exhibits in support of the request for a protective order. [Doc. 98-1, at 24 || pp. 1-5; Doc. 98-1, at pp. 6-77.] 25 In an Order filed on October 29, 2019, defendants were ordered to provide plaintiff || with a description of the proposed subject areas for Mr. Anderson’s deposition testimony. 27 ||[Doc. No. 91, at p. 5.] The Court’s Order of October 29, 2019 also directed the parties to 28 and confer about any objections that plaintiff has to the proposed subject areas for 1 Anderson’s deposition. [Doc. No. 91, at p. 5.] Ifthe parties were unable to reach 2 ||agreement during the meet and confer process, they were to file a joint motion regarding 3 || plaintiff's request for a protective order no later than November 15, 2019. Each party’s 4 || briefing in the joint motion was limited to five (5) pages or less. Supporting declarations 5 ;|could be submitted but without exhibits. [Doc. No. 91, at pp. 5-6.] 6 The Joint Motion does not comply with the Court’s October 29, 2019 Order. First, 7 is nothing to indicate counsel satisfied the meet and confer requirement. Second, 8 || because the Joint Motion is two separate documents with separate signature blocks, it is 9 || apparent that the procedure set forth in Chambers Rule VIII(E) was not followed. 10 |; Section VII(E) expects the parties to engage in a collaborative effort and to review each 11 |} other’s arguments before the Joint Motion is submitted, so that each party has an 12 || opportunity to offer a counter argument as to every issue and to further reflect and 13 |, evaluate each other’s positions. Next, defendants complied with the page and exhibit 14 || limitations, but plaintiff did not. Plaintiff's briefing is eight (8) pages when it was 15 || supposed to be five (5) pages. In addition, the five (5) page Declaration submitted with 16 || the Joint Motion is essentially a continuation and repetition of the arguments raised in the 17 |; eight (8) other pages of briefing. [Doc. No. 91, at p. 5.] Finally, there are exhibits 18 || attached to the Declaration even though the Court’s Order states that a Declaration could 19 || be submitted “but without exhibits.” [Doc. No. 91, at p. 6.] 20 For the reasons outlined more fully below, the Court finds that plaintiff's request 21 || for a protective order must be DENIED. Plaintiff must make David Anderson available 22 || for a deposition in San Diego. 23 Background 24 The First Amended Complaint against defendants Wiener and Finance California 25 || includes the following causes of action: (1) fraud — intentional misrepresentation; fraud negligent misrepresentation; (3) fraud — concealment; (4) RICO; ——___ 27 ||(5) promissory fraud concealment; (6) conspiracy to defraud; and (7) breach of fiduciary 28 jj duty. [Doc. No. 11, at p. 1.] yy 1 Plaintiff is an auctioneer of thoroughbred horses. [Doc. No. 11, at p. 10.] David 2 {| Anderson is or was employed by plaintiff as a sales accountant, and he was involved in 3 sale of a thoroughbred racehorse to a third party, Jeffrey DeHaven, who is or was the 4 ||owner of The Premae Company. The Premae Company is the alter ego of DeHaven > ||(collectively DeHaven/Premae”). Although the First Amended Complaint names 6 || DeHaven/Premae as defendants, a default has been entered against them, and they have 7 appeared in the action. [Doc. No. 24.] 8 When DeHaven/Premae failed to pay for the horse, plaintiff took legal action 9 || against him and his business. [Doc. No. 11, at pp. 5-6, 24, 50; Doc. No. 98, at p. 12.] 10 || According to the First Amended Complaint, plaintiff was able to obtain a judgment 11 || against DeHaven/Premae for failing to pay for the horse. [Doc. No. 11, at pp. 4-6, 8-9, 12 || 13, 23, 27-28, 31.] Defendants Wiener and Finance California were not parties to the 13 || litigation against DeHaven/Premae. [Doc. No. 98, at-p. 14.] 14 Defendant Wiener is allegedly the sole owner and shareholder of defendant 15 || Finance California. [Doc. No. 11, at pp. 8, 10.] Defendant Wiener, as chief executive 16 || officer of Finance California, wrote a letter addressed “To Whom It May Concern” 17 || stating that he had a relationship with DeHaven for approximately 15 years and that his 18 ||company, Premae, “has a credit facility with Finance California in the amount of 19 $750,000.00.” [Doc. No. 11, at pp. 18, 22. See also Doc. No. 1, at p. 58 (copy of the 20 || letter).] This letter also stated that DeHaven is “honest, trustworthy, and a credible 21 borrower.” [7d.] According to the First Amended Complaint, statements in this letter 22 || were false and were made to induce plaintiff to sell the horse. Plaintiff allegedly relied 23 this letter when it sold the horse to DeHaven/Premae. [Doc. No. 11, at pp. 18, 21-22.] 24 The First Amended Complaint further alleges that plaintiff later discovered in 2016 25 || or early 2017 during DeHaven’s bankruptcy proceeding that defendants Wiener and _|| Finance California were shareholders/members of Premae in 2010-and 2011, but they —— 27 ||“actively concealed” their interest in Premae. [Doc. No. 11, at pp. 19, 22, 27-28; Doc. 28 || No. 98, at pp. 2-3.] The First Amended Complaint alleges that the purchase of the horse I part of a more complex, large scale fraud” involving defendant Wiener and others. 2 [Doc, No. 11, at pp. 18-19, 28.] 3 Discussion 4 Plaintiff contends in the Joint Motion that it would not be proportional to the needs 5 || of the case to permit defendants to depose Mr. Anderson, because he does not have any 6 || knowledge about matters at issue in this case. [Doc. No. 98, at p. 8.] Rather, it is 7 || plaintiff's position that Mr. Anderson only has knowledge about facts relevant to the 8 underlying contract action(s) involving the sale of the horse to DeHaven/Premae, and 9 || these matters have already been resolved in other actions. According to plaintiff, the 10 |} proposed topics for Mr. Anderson’s deposition only relate to factual matters that were 11 || previously litigated in the underlying “breach of contract” action(s) involving DeHaven/ 12 || Premae, and the sale of the horse. As a result, plaintiff contends that defendants’ purpose 13 ||in deposing Mr. Anderson is an attempt to re-litigate matters that have already been 14 || resolved in the underlying contract action(s) and the only matter yet to be adjudicated in 15 || this case is the alleged fraud against plaintiff by defendants Wiener and Finance 16 || California. [Doc. No. 98, at pp. 2-5.] 17 In their portion of the Joint Motion, defendants explain that three causes of action 18 || in the First Amended Complaint — negligent misrepresentation, fraudulent 19 || misrepresentation, and false promise — all require plaintiff to prove that it reasonably 20 |irelied on the October 2010 letter written by defendant Wiener as chief executive officer 21 || of defendant Finance California.’ [Doc. No. 98, at pp. 12-13.] Defendants also explain 22 || that proof of actual or reasonable reliance by plaintiff on the letter was not previously 23 || adjudicated in the underlying action(s) involving the sale of the horse to DeHaven/ 24 25 | | For example, “Tt}]he following elements must be pleaded to state a cause of action ‘for negligent misrepresentation: (1) a false statement of a material fact that the defendant — 27 || honestly believes to be true, but made without reasonable grounds for such belief, (2) 28 made with the intent to induce reliance, (3) reasonable reliance on the statement, and (4) damages.” Century Sur. Co, v. Crosby Ins., Inc., 124 Cal. App. 4th 116, 129 (2004).

1 ||Premae, [Doc. No. 98, at p. 13.] Even if the underlying contract action(s) included any 2 statements about the issue of reliance, defendants contend they would only be dictum. 3 || Defendants do not believe the principles of collateral estoppel would apply to preclude 4 || defendants from litigating the issue of reliance in this case, because they did not have a 5 || full and fair opportunity to litigate this issue in any other action. According to 6 || defendants, plaintiff relies on “a default proceeding or a case in which defendants were 7 ||not a party, or both,” so “the predicates for collateral estoppel” do not exist. [Doc. No. 8 at p. 14.] Therefore, defendants argue that Mr. Anderson is a “key witness” 9 || concerning plaintiff's reasonable reliance in selling the horse based on the October 2010 10 written by defendant Wiener as chief executive officer of defendant Finance 11 || California. [Doc. No. 98, at pp. 12-13 n.10.] In the Joint Motion, plaintiff has not 12 ||responded to these arguments. 13 Defendants also argue that Mr. Anderson is an important witness on the issue of 14 |) damages, because the prior matters involving DeHaven/Premae only involved “benefit of 15 |/the bargain” contract damages, and “actual damages are the measure for the 16 || misrepresentation claims in this case.” [Doc. No. 98, at p. 13 n. 10.] In addition, 17 || defendants want to depose Mr. Anderson about plaintiff's “diligence in pursuing its 18 || current claims,” because they believe this issue is relevant to whether the statute of 19 || limitations has expired. [Doc. No. 98, at p. 13.] In the Joint Motion, plaintiff has not 20 responded to these arguments. 21 Plaintiff’s final argument as to why the Court should enter a protective order 22 precluding Mr. Anderson’s deposition is that plaintiff has filed a Motion for Summary 23 || Adjudication before the District Court in this case raising the issues of the res judicata 24 collateral estoppel effects of the prior judgments against DeHaven/Premae. [Doc. 25 || No. 98, at pp. 6-7, citing Doc. No. 90.] However, as defendants contend, the entire case || would not be resolved even if plaintiff prevails on the Motion for Summary Adjudication, 27 || and, as a result, discovery must proceed. The Court agrees. 28 1 Conclusion 2 Without more, the Court finds that defendants have established the relevance and 3 ||importance of Mr. Anderson’s deposition. Defendants are entitled to the discovery they 4 ||need to prepare a defense and to pursue their theory of the case, and it is unclear how 5 ||they would be able to do so without taking the deposition of Mr. Anderson. Accordingly, 6 | plaintiff’s Motion for a Protective Order seeking to prohibit defendants from deposing 7 ||Mr. Anderson or to limit the scope of Mr. Anderson’s deposition is DENIED. Plaintiff is 8 || ordered to make Mr. Anderson available for deposition in San Diego in accordance with 9 Court’s prior Order of October 29, 2019. [Doc. No. 91, at pp. 5-6.] To the extent 10 || plaintiff's counsel has not already provided ten (10) dates to defense counsel indicating 11 |) when Mr. Anderson is available for a deposition, ten (10) available dates for 12 ||Mr. Anderson’s deposition must be provided to defense counsel no later than 13 || December 6, 2019, and the available dates must be between December 9, 2019 and 14 || February 17, 2020. 15 Plaintiff's request for Rule 11 sanctions against defendants is DENIED as 16 frivolous. In addition, plaintiff's counsel is forewarned that the Court agrees with 17 defendants’ response to plaintiff's request for sanctions [Doc. No. 98, at pp. 15-16], and, 18 || from this point forward, the Court will not hesitate to impose monetary sanctions against 19 || plaintiffs counsel if she continues to take unreasonable and unsupportable positions 20 || during the discovery process. When discovery disputes arise, plaintiff's counsel must 21 ||carefully and completely consider defendants’ positions before seeking the Court’s 22 |/intervention. It should not be necessary for the Court to intervene at every step in the 23 || discovery process. 24 IT IS SO ORDERED. 25 ||Dated: November ZY , 2019 “yp 7 Hon. Karew’S. Crawford United States Magistrate Judge 28