Case Name: Vinh Duc Nguyen, et al. v. Peter Pau, et al.

Case No.: 16CV302578

Plaintiff’s Motion to Compel Discovery

Factual and Procedural Background

Plaintiff Vinh Duc Nguyen aka Vince D. Nguyen, individually and doing business as Newton Law Group (“Nguyen”), is a licensed California real estate broker. (Second Amended Complaint (“SAC”), ¶2.) In July 2011, plaintiff Nguyen and his wife, Teri Ha (“Ha”), entered into discussions with the principals of Vallco Shopping Mall, LLC (“VSM”), owners of real property known as the Vallco Fashion Mall located at 10123 North Wolfe Road in Cupertino (“Subject Property”), to exclusively represent VSM in connection with the sale of the Subject Property. (SAC, ¶¶7 – 8.)

On or about August 2, 2011, VSM and plaintiff Nguyen entered into an exclusive right to sell agreement entitled “Owner-Broker Agreement-Vallco Shopping Center” (“Listing Agreement”). (SAC, ¶9.) Pursuant to the Listing Agreement, VSM agreed plaintiff Nguyen would have the exclusive right to list and sell the Subject Property and procure a buyer to purchase the Subject Property with a minimum sale price of $100 million. (SAC, ¶10.) Specifically, VSM agreed that “[t]he first Buyer who submits the purchase contract, or a Letter of Intent to Seller, with proof of financial ability to buy the [Subject Property], together with a deposit amount earlier than the others has the right to buy the [Subject Property].” (Id.) Pursuant to the Listing Agreement, VSM agreed to pay plaintiff Nguyen and his associates a six percent (6%) commission based on the sale price, which also included the commission for the buyer’s broker. (Id.)

On August 9, 2011, plaintiff Nguyen entered into an agent/ sub-agent type agreement entitled “Broker Cooperation Agreement” with Marcus & Millichap (“M&M”) whereby plaintiff Nguyen agreed to pay a certain percentage of his commission to M&M in the event M&M was successful in assisting plaintiff Nguyen in procuring a buyer of the Subject Property. (SAC, ¶11.) M&M assigned Jeffrey John Taughinbaugh (“Taughinbaugh “) and Anh Stovall (“Stovall”) to work with plaintiff Nguyen. (Id.)

By the end of August 2011, M&M and plaintiff Nguyen obtained nine potential buyers each of whom executed a “Non-Circumvent Agreement” agreeing not to circumvent plaintiff Nguyen in purchasing the Subject Property. (SAC, ¶12.) On August 11, 2011, defendant Peter Pau (“Pau”), individually and doing business as Sand Hill Property Company, and Taughinbaugh executed a non-circumvent agreement (“NCA”) which repeatedly referenced Newton Law Group as one of the brokers for the owner of the Subject Property. (SAC, ¶15.) In the NCA, defendant Pau agreed that if he closed the purchase of the Subject Property, M&M and Newton Law Group would be “compensated the agreed upon fee in the Contract executed with the Owner on 8/2/2011.” (Id.) Defendant Pau also agreed that all negotiations would be conducted through M&M and acknowledged that defendant Pau “is not working with any other broker or agent in connection with the Property.” (Id.) Defendant Pau’s obligations under the NCA applied to a twelve month period beginning on the date of execution. (Id.)

Under the terms of the NCA, defendant Pau requested “Offering Materials” which M&M provided while assisting with negotiations. (SAC, ¶16.) Defendant Pau asked for additional information which plaintiff Nguyen provided along with assistance to defendant Pau. (Id.) Other people assisted plaintiff Nguyen in serving as VSM’s exclusive listing agent, including Ha, who is a licensed real estate agent; Tammy Pham (“Pham”), who worked for plaintiff Nguyen as an independent contractor; and Kham Tran (“Tran”), Ha’s cousin living in Vietnam. (SAC, ¶17.) Pursuant to VSM’s instructions, Ha and Pham contacted Mike Rohde (“Rohde”) for due diligence documents relating to the Subject Property, but Rohde did not cooperate. (Id.) In response to pressure from defendant Pau and other interested buyers for further due diligence documents, plaintiff Nguyen, Ha, Pham, and Stovall went to Vietnam to meet with VSM’s principals. (SAC, ¶18.)

On September 25, 2011, VSM’s principals insisted on being provided with the identities of the prospective buyers. (SAC, ¶19.) In reliance on his rights under the Listing Agreement, plaintiff Nguyen provided names of five potential buyers to VSM. (Id.) On September 26 – 27, 2011, plaintiff Nguyen, along with Ha, Tran, Pham, and Stovall, met with VSM’s principals in Saigon. (SAC, ¶20.) Among the VSM principals present were Be Tram, Cuu Nguyen (representing a silent but powerful partner), Ngan Tram (Be Tram’s son), and Hoa Tran (Be Tram’s younger son). (Id.) The VSM principals promised to have due diligence documents to plaintiff Nguyen within seven days and instructed plaintiff Nguyen to work directly with Cuu Nguyen in obtaining the due diligence documents. (Id.) After the meetings, VSM demanded information about the identities of the remaining potential buyers before releasing due diligence documents. (SAC, ¶21.)

On October 3, 2011, VSM requested plaintiff Nguyen release the remaining list of nine potential buyers and, in exchange, VSM would provide updated financial documents to plaintiff Nguyen. (SAC, ¶22.) Plaintiff Nguyen and his associates provided information regarding the remaining potential buyers, but VSM did not provide plaintiff Nguyen with updated financial documents. (Id.)

In the meantime, plaintiff Nguyen and M&M identified another potential buyer, Catalina Investment Company (aka The Irvine Company) (“Catalina”). (SAC, ¶23.) On or about October 17, 2011, Catalina signed a non-circumvent agreement with M&M and plaintiff Nguyen. (Id.)

On November 16, 2011, plaintiff Nguyen received a letter from Walter Merkle of Kay & Merkle (“Merkle”) claiming to represent VSM and purporting to terminate the Listing Agreement on the false basis that plaintiff Nguyen did not have a real estate broker’s license. (SAC, ¶24.) Plaintiff Nguyen reported this letter to Cuu Nguyen who assured plaintiff the letter was unauthorized. (Id.) Cuu Nguyen instructed plaintiff Nguyen to ignore the letter and continue working with VSM. (Id.) In reliance on Cuu Nguyen’s assurances coupled with the fact that VSM continued working with plaintiff Nguyen and his assistants, plaintiff Nguyen continued working on obtaining the sale of the Subject Property. (SAC, ¶25.)

At defendant Pau’s request, plaintiff Nguyen and M&M organized an international telephone conference call (“ITC”) for April 10, 2012 to allow Pau to speak directly with VSM members in Vietnam and confirm plaintiff as the listing agent because Pau had received communications from individuals unassociated with plaintiff who were soliciting Pau to purchase the Subject Property. (SAC, ¶26.) Before agreeing to participate in the ITC, defendant Pau demanded proof that the participants in the ITC were, in fact, authorized representatives of the owner of the Subject Property. (SAC, ¶27.) Stovall provided defendant Pau with business cards for the principals of VSM. (Id.) Plaintiff sent Pham to Vietnam to help set up the ITC and to translate during the ITC because VSM’s principals do not speak English. (SAC, ¶28.)

Before the scheduled ITC, defendant Pau induced Taughinbaugh to conditionally release Pau from the NCA by representing that “if the owners confirm to me that they have only authorized [M&M] to represent them and no other brokerage firm is involved, then I will work with you.” (SAC, ¶29.) Trusting Pau, Taughinbaugh conditionally released defendant Pau from the NCA without plaintiff Nguyen’s knowledge or authorization. (Id.) The ITC occurred on April 10, 2012 during which Be Tram confirmed VSM’s intent to sell the Subject Property and plaintiff Nguyen was the only agent with exclusive authority to sell the Subject Property on VSM’s behalf. (SAC, ¶¶30 – 31.) At the conclusion of the ITC, Pau expressed his satisfaction and stated his intent to prepare an offer to submit to M&M and plaintiff Nguyen to hand carry to Vietnam. (SAC, ¶31.) With Be Tram’s confirmation that plaintiff Nguyen (and sub-agent M&M) was the only listing agent, the terms of the conditional “release” were not met, thereby rendering it void. (SAC, ¶32.)

After the ITC, on April 27, 2012, Cuu Nguyen confirmed VSM would continue working with plaintiff Nguyen to complete the sale of the Subject Property to Pau and assured plaintiff would be entitled to the commission in the Listing Agreement. (SAC, ¶33.)

On May 15, 2012, defendant Pau represented to M&M that he would make an offer to purchase the Subject Property but needed more time to prepare the offer. (SAC, ¶34.) Without plaintiff Nguyen’s knowledge or involvement, defendant Pau hired his own broker, Efi Luzon, and involved his financial partner, Abu Dhabi Investment Authority (“ADIA”), to negotiate and finalize the purchase of the Subject Property directly with VSM in violation of the terms of the NCA. (SAC, ¶¶35 and 39.) In May 2012, VSM started dealing directly with Pau in circumventing plaintiff Nguyen as the listing agent. (SAC, ¶39.)

In or about May 2013, plaintiff learned that Pau had made an offer to buy the Subject Property directly from VSM and one of the conditions of the offer was a credit to Pau for the 6% commission VSM would save by not having to pay plaintiff and his associates. (SAC, ¶37.) Based upon this and other information, plaintiff Nguyen filed a complaint on May 6, 2013 against VSM for breach of contract and other causes of action in Santa Clara County Superior Court case number 1-13-CV-245854 (“Vallco Litigation”). (Id.)

To hide their wrongful acts from plaintiff Nguyen, Pau and ADIA formed one or more entities that would act as a mere shell, instrumentality, or conduit to purchase the Subject Property. (SAC, ¶40.) In June 2014, Pau formed Commercial Real Properties-CA 173 LLC (“CA 173 LLC”) to act as a straw buyer of the Subject Property. (Id.) In the same month, CA 173 LLC presented a letter of intent (“LOI”) to buy the Subject Property which Ngan Tram signed on behalf of VSM. (Id.) In July 2014, pursuant to the terms of the LOI between CA 173 LLC and VSM, ADIA deposited $116 million into escrow on behalf of CA 173 LLC. (SAC, ¶41.)

In or about October 2014, Pau or defendant Vallco Property Owner, LLC (“VPO”) purchased properties adjacent to the Subject Property for approximately $200 million. (SAC, ¶44.) Pau’s plan from the beginning was to purchase the Subject Property and adjacent properties in order to redevelop the entire Vallco Shopping District. (SAC, ¶¶44 – 45.)

As early as February 2012, before the ITC and during the non-circumvention period under Pau’s NCA with plaintiff and M&M, Pau opened escrow on the Subject Property. (SAC, ¶46.) Pau worked with M&M and plaintiff Nguyen in order to obtain contact with the owners of the Subject Property and deal with them directly. (Id.) After Be Tram learned of Pau’s identity as the potential buyer, he recruited plaintiff’s assistant to help carry out his scheme to deal directly with Pau to avoid payment of the commission to plaintiff and his associates. (SAC, ¶¶47 – 51.)

On July 3, 2012, Pau submitted an offer to buy the Subject Property directly to VSM. (SAC, ¶49.) For the two years that followed, Pau continued working with VSM. (SAC, ¶52.) When it appeared Pau’s master plan to purchase the entire Vallco Shopping District might collapse, Pau agreed to close the deal for a $116 million purchase price, no contingencies, and a quick closing. (Id.) The purchase and sale agreement was entered into on November 3, 2014 and the grant deed conveying the Subject Property to VPO was recorded on November 12, 2014. (SAC, ¶53.)

In the meantime, plaintiff joined Pau as a co-defendant in the Vallco Litigation. (SAC, ¶54.) Pau’s attorney aggressively sought Pau’s dismissal by filing a motion for sanctions. (Id.) In support of that motion, Pau made various false statements. (SAC, ¶¶56 – 59.) Trusting Pau would not lie under oath, plaintiff agreed to dismiss Pau from the Vallco Litigation without prejudice. (SAC, ¶55.)

On November 10, 2016, plaintiff Nguyen filed a complaint against Pau, individually and doing business as Sand Hill Property Company, Sand Hill Property Management, LLC, and VPO asserting causes of action for:

(1) Breach of Contract
(2) Breach of Implied Covenant of Good Faith and Fair Dealing
(3) Intentional Interference with Contractual Relations
(4) Intentional Interference with Prospective Economic Advantage
(5) Fraud-Deceit
(6) Violation of Business & Professions Code §17200, et seq.

On January 6, 2017, plaintiff Nguyen filed a first amended complaint (“FAC”) asserting the same six causes of action.

On March 30, 2017, defendants Pau, individually and doing business as Sand Hill Property Company (“SHPC”), Sand Hill Property Management, LLC, and VPO filed a demurrer to plaintiff Nguyen’s FAC.

On May 9, 2017, the court sustained, in part, and overruled, in part, the defendants’ demurrer to plaintiff Nguyen’s FAC.

On May 24, 2017, plaintiff Nguyen filed the operative SAC against Pau, individually and doing business as SHPC, and VPO. The SAC now asserts the following causes of action:

(1) Breach of Contract
(2) Breach of Implied Covenant of Good Faith and Fair Dealing
(3) Intentional Interference with Contractual Relations
(4) Intentional Interference with Prospective Economic Advantage
(5) Fraud-Deceit
(6) Quasi-Contract/ Unjust Enrichment
(7) Violation of Business & Professions Code §17200, et seq.
(8) Conspiracy to Commit Fraud, to Interfere with Contractual Relations and Interfere with Prospective Economic Advantage

On July 14, 2017, defendants Pau, individually and doing business as SHPC, and VPO filed an answer and a demurrer to the fifth and seventh causes of action in plaintiff Nguyen’s SAC. On September 26, 2017, the court issued an order overruling the demurrer to the fifth cause of action but sustaining, without leave to amend, the demurrer to the seventh cause of action.

On September 28, 2018, defendants Pau, individually and doing business as SHPC, and VPO filed a motion for summary adjudication of the first, second, third, fourth, and sixth causes of action in plaintiff Nguyen’s SAC. On December 14, 2018, the court issued an order denying defendants’ motion for summary adjudication of the first, second, third, and fourth causes of action. The court continued the motion for summary adjudication as to the sixth cause of action only. On February 28, 2019, the court granted defendants Pau, individually and doing business as SHPC, and VPO’s motion for summary adjudication of the sixth cause of action of plaintiff Nguyen’s SAC.

Discovery Dispute

On February 20, 2019, plaintiff Nguyen personally served defendant VPO with form interrogatories (“FI”), set one; requests for admission (“RFA”), set one; specially-prepared interrogatories (“SI”), set one; and requests for production of documents (“RPD”), set one. On or about March 21, 2019, defendant VPO timely served responses to the discovery.

Plaintiff Nguyen’s counsel found defendant VPO’s responses to the discovery deficient because they were not verified, contained invalid objections, and claimed privilege but did not provide a privilege log.

On April 1, 2019, plaintiff Nguyen’s counsel sent a meet and confer letter to defendant VPO’s counsel by email. On April 2, 2019, defendant VPO’s counsel responded indicating co-counsel was unavailable until April 16, 2019. Plaintiff Nguyen’s counsel responded the same date requesting the meet and confer be addressed in view of the May 13, 2019 trial date. Plaintiff Nguyen’s counsel did not receive a further response from defendant VPO’s counsel by April 8, 2019.

On April 9, 2019, plaintiff Nguyen filed the instant motion to compel discovery.

I. Plaintiff Nguyen’s motion to compel discovery is DENIED.

“On receipt of a response to interrogatories, the propounding party may move for an order compelling a further response if the propounding party deems that any of the following apply: (1) An answer to a particular interrogatory is evasive or incomplete. (2) An exercise of the option to produce documents under Section 2030.230 is unwarranted or the required specification of those documents is inadequate. (3) An objection to an interrogatory is without merit or too general.” (Code Civ. Proc., §2030.300.) The party objecting to a discovery request bears the burden of explaining and justifying the objections. (See Coy v. Super. Ct. (1962) 58 Cal.2d 210, 220-221.)

“Where responses [to requests for admission] have been timely filed but are deemed deficient by the requesting party (e.g., because of objections or evasive responses), that party may move for an order compelling a further response.” (Weil & Brown, et al., CAL. PRAC. GUIDE: CIV. PRO. BEFORE TRIAL (The Rutter Group 2015) ¶8:1378, p. 8G-27 citing Code Civ. Proc., §2033.290.)

Upon receipt of a response to a demand for inspection, including requests for the production of documents, the demanding party may move for an order compelling further response to the demand if the demanding party deems that any of the following apply:

1. A statement of compliance with the demand is incomplete.
2. A representation of inability to comply is inadequate, incomplete, or evasive.
3. An objection in the response is without merit or too general.

(Code Civ. Proc., §2031.310, subd. (a)(1) – (3).)

The motion for order compelling further responses “shall set forth specific facts showing good cause justifying the discovery sought by the inspection demand.” (Code Civ. Proc., §2031.310, subd. (b)(1); see also Code Civ. Proc., §2025.450, subd. (b)(1); Kirkland v. Sup. Ct. (2002) 95 Cal.App.4th 92, 98 (Kirkland).) To establish “good cause,” the burden is on the moving party to show both relevance to the subject matter (e.g., how the information in the documents would tend to prove or disprove some issue in the case) and specific facts justifying discovery (e.g., why such information is necessary for trial preparation or to prevent surprise at trial). (Glenfed Develop. Corp. v. Sup. Ct. (1997) 53 Cal.4th 1113, 1117.) Where the moving party establishes “good cause,” the burden shifts to the responding party to justify its objections. (Kirkland, supra, 95 Cal.App.4th at p. 98.)

When discovery responses are served after a motion to compel is filed, the court has substantial discretion in deciding how to rule in light of the particular circumstances presented. (See Sinaiko Healthcare Consulting, Inc. v. Pacific Healthcare Consultants (2007) 148 Cal.App.4th 390, 408-409 (Sinaiko).) Through this discretion, the court might deny the motion to compel as moot and just impose sanctions, or examine the responses to determine if they are code-compliant. (Sinaiko, supra, 148 Cal.App.4th at p. 409.)

In opposition to this motion to compel, defendant VPO proffers additional factual background leading up to this motion to compel. In relevant part, on March 18, 2019, defendant VPO’s counsel requested a one-week extension of time to respond to the discovery because she had been having trouble getting in touch with the client representative. Plaintiff’s counsel refused unless defendant VPO waived objections and the discovery motion cutoff. Defendant VPO’s counsel advised plaintiff Nguyen’s counsel of her upcoming unavailability (March 29, 2019 through April 16, 2019) on a pre-paid overseas trip. Without the benefit of an extension of time, defendant VPO timely served responses on March 22, 2019. Upon returning from her overseas trip on April 16, 2019, defendant VPO’s counsel learned plaintiff’s counsel sent a meet and confer letter on April 1, 2019 demanding amended responses by April 3, 2019. On April 19, 2019, defendant VPO served first amended responses to plaintiff’s discovery.

In view of defendant VPO’s service of amended responses on or about April 19, 2019, the court deems the motion to compel discovery to be MOOT and is, for that reason, DENIED.

On the issue of sanctions, Code of Civil Procedure section 2031.310, subdivision (h) mandates an award of monetary sanctions “against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel further response to a demand, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.” Code of Civil Procedure section 2030.300, subdivision (d) mandates an award of monetary sanctions “against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel a further response to interrogatories, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.” “The court shall impose a monetary … against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel further response [to a request for admission], unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.

“The court may award sanctions under the Discovery Act in favor of a party who files a motion to compel discovery, even though no opposition to the motion was filed, or opposition to the motion was withdrawn, or the requested discovery was provided to the moving party after the motion was filed.” (Cal. Rules of Court, rule 3.1348, subd. (a).)

Here, however, the court declines to award sanctions against defendant VPO. The court finds defendant VPO’s counsel acted with substantial justification and in good faith in requesting an extension of time to respond to the discovery, serving timely responses, and thereafter serving amended responses. While the court recognizes plaintiff Nguyen was faced with the discovery and discovery motion cut-off, the exigency is a product of plaintiff Nguyen’s own doing.

Additionally, plaintiff Nguyen’s request for sanctions is defective. Plaintiff Nguyen’s notice of motion fails to comply with Code of Civil Procedure section 2023.040 which states, in relevant part, “A request for a sanction shall, in the notice of motion, identify every person, party, and attorney against whom the sanction is sought, and specify the type of sanction sought.” The notice of motion filed by plaintiff Nguyen does not identify every person, party, and attorney against whom the sanction is sought nor does it specify the type of sanction sought.

Accordingly, plaintiff Nguyen’s request for sanctions is DENIED.