F. Kordestani, et al. v. G. Kordestani, et al. CASE NO. 113CV244691
DATE: 13 June 2014 TIME: 9:00 LINE NUMBER: 8
This matter will be heard by the Honorable Judge Socrates Peter Manoukian in Department 19 in the Old Courthouse, 2nd Floor, 161 North First Street, San Jose. Any party opposing the tentative ruling must call –Department 19 at 408.808.6856 and the opposing party no later than 4:00 PM Thursday 12 June 2014. Please specify the issue to be contested when calling the Court and counsel.

On 13 June 2014, the motion of defendants George H. Kordestani (“George”) and Nancy Kordestani (“Nancy”) (collectively, “Defendants”) for a protective order, and for monetary sanctions was argued and submitted. Plaintiffs Farhang K. Kordestani (“Farhang”), Estate of Nasser Kordestani (“Estate of Nasser”), Mehdi K. Kordestani (“Mehdi”), Behrouz K. Kordestani (“Behrouz”), Rouzbeh K. Kordestani (“Rouzbeh”), and Ronak K. Kordestani (“Ronak”) (collectively, “Plaintiffs”) filed a formal opposition to the motion, in which they request monetary sanctions.

Statement of Facts

This breach of contract action arises from George and Nancy’s purported misappropriation of assets from the family business. In 1976, Farhang, George, Behrouz, Mehdi, and Nasser Kordestani formed Bayco Enterprises (“Bayco”), a California Limited Partnership specializing in real estate investment. A trust in favor of Rouzbeh and Ronak also holds an ownership stake in the partnership. Since 1984, George has served as Bayco’s sole general partner. As general partner, George possesses the exclusive authority to withdraw and deposit funds into Bayco bank accounts.

In 1978, Yakan Construction Company (“Yakan”), an Iranian corporation principally owned by Farhang, Nasser Kordestani and Mehdi, purchased 20 vehicles from Mack Trucks (“Mack”) for delivery to Iran. Mack improperly modified the vehicles and as a result, they could not be sold in Iran. The following year, Yakan filed suit against Mack and received a jury verdict in the amount of $3,050,000 in its favor. Given the authority to act on Yakan’s behalf, George entered into a post-verdict settlement with Mack for $850,000.

Nearly thirty years later, during a family meeting in September 2009, Plaintiffs discovered two boxes containing previously undisclosed documents related to Bayco and Yakan. The documents indicated that George had deposited the $850,000 settlement between Yakan and Mack directly into a joint bank account shared with Nancy and never remitted the funds to Yakan. In addition, the newly uncovered records suggested that George loaned over $100,000 in partnership funds to Nasser Kordestani. When Nasser Kordestani repaid the loan with interest, George retained the funds for his personal use and did not deposit these payments in Bayco accounts. Finally, the documents revealed that George misappropriated an additional $700,000 in partnership money for his own personal use.

In their operative first amended complaint, Plaintiffs assert causes of action against Defendants for breach of contract, breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, fraud, and an accounting.

Discovery Dispute

In late February or early March of 2014, Plaintiffs served a notice of deposition and a set of form interrogatories (“FI”) on Nancy.

On 3 March 2014, Defendants’ counsel sent a meet and confer letter to Plaintiffs’ counsel. He asserted that Nancy is bedridden and lacks the mental capacity to respond to discovery. As a consequence, he asked Plaintiffs to withdraw their discovery requests.

A month later, on 8 April 2014, Defendants’ counsel sent a second letter to Plaintiffs’ counsel, reiterating his demand that the discovery requests be withdrawn.

On 18 April 2014, Plaintiffs’ counsel sent a letter in reply. Counsel claimed that several members of the Kordestani family had recently been in contact with Nancy and reported that she was competent to respond to discovery. Thus, counsel stated that Plaintiffs would not withdraw their discovery requests unless an independent medical examination confirmed that Nancy was unable to participate in the lawsuit.

On 22 April 2014, Defendants’ counsel sent a final meet and confer letter in reply, indicating that the parties had reached an impasse, and Defendants intended to file a motion for protective order preventing the discovery.

On 14 May 2014, based on the parties’ inability to informally resolve the dispute, Defendants filed this motion for a protective order. Plaintiffs filed their opposition on 2 June 2014. On 5 June 2014, Defendants filed their reply.

Discussion

I. Motion for a Protective Order

Defendants move for a protective order prohibiting Plaintiffs from deposing Nancy, and an order that the FI need not be answered, on the ground that she lacks the physical and mental capacity to actively participate in the lawsuit.

A. Legal Standards

In general, “[a]ny party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter … if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence.” (Code Civ. Proc., § 2017.010.) For good cause shown, a court may make any order that justice requires to protect any party, deponent, or other natural person from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense relative to discovery requests. (Code Civ. Proc., §§ 2025.420, subd. (b), 2030.090, subd. (b).) Generally, the party or deponent seeking a protective order must show that the burden, expense, or intrusiveness due to the discovery request clearly outweighs the likelihood that the information sought will lead to the discovery of admissible evidence. (Code Civ. Proc., § 2017.020; see also Emerson Electric Co. v. Superior Court (1997) 16 Cal.4th 1101, 1110-1111.) If a motion for protective order is denied in whole or in part, the court may order that the deponent provide or permit the discovery against which protection was sought on those terms and conditions that are just. (Code Civ. Proc., § 2025.420, subd. (g).)

B. Evidentiary Objection

In their opposition, Plaintiffs object to a letter from Nancy’s physician, Harish H.K. Murthy, M.D., attached to the declaration of Kayvon K. Kordestani on the grounds that the letter “is not signed under penalty of perjury and does not meet the standards of reliability….” (Opp’n., p. 2: 14-16.) There is no authority, however, holding that the Court must rule on an evidentiary objection made in connection with a discovery motion. Furthermore, Defendants attached to their reply brief a properly executed declaration from Dr. Murthy containing the same information. Thus, a ruling on the objection is not necessary to the Court’s resolution of the motion, and the Court declines to rule on Plaintiffs’ evidentiary objection.

C. Procedural Issue

As a threshold matter, Plaintiffs contend that Defendants have failed to promptly move for a protective order with regard to the FI served on Nancy. In this respect, Plaintiffs’ counsel declares: “I granted Defendants two extensions of time to respond to Plaintiffs’ written discovery. However, I did not extend the time for filing of a motion for [] protective [order] as to said discovery. Instead of providing responses to the written discovery, Defendants filed their motion for a protective order. This alone is sanctionable conduct.” (Rad Decl., p. 2: 1-4.)

Code of Civil Procedure section 2030.090 provides that a motion for a protective order must be filed “promptly,” but provides no specific deadline by which such a motion must be filed. (Code Civ. Proc., § 2030.090, subd. (a).) The determination of whether a motion for a protective order has been promptly filed is a fact specific inquiry entrusted to the discretion of the Court. (See Nativi v. Deutsche Bank National Trust Co. (2014) 223 Cal.App.4th 261, 316.)

Here, Defendants’ conduct suggests that they promptly filed this motion. As indicated above, Defendants attempted to resolve the dispute informally through the meet-and-confer process throughout March of 2014. Shortly after the parties reached an impasse and before responses to the FI were due, Defendants filed this motion for a protective order. Accordingly, taking into account the entirety of Defendants’ conduct, the Court finds that Defendants promptly moved for a protective order.

D. Analysis

Defendants contend that Nancy lacks the competency to appear at her deposition and/or to respond to the FI. In support of their argument, they rely on the declarations of Nancy’s caregivers, Kayvon K. Kordestani (“Kayvon”), Ymra Santana (“Santana”), and Sandra Cruz (“Cruz”), and her physician, Dr. Murthy.

Kayvon avers that since Nancy suffered an anoxic brain injury in 2004, she requires 24-hour care. (See Kayvon Decl., p. 2: 4-7.) From a physical perspective, Kayvon relates that Nancy has very low stamina and cannot attempt long outings without experiencing health setbacks. (See Kayvon Decl., p. 3: 9-10, 14-17.) With respect to Nancy’s mental facility, Kayvon indicates that Nancy often gets confused, and due to her previous injury, speaks slowly and with difficulty. (See Kayvon Decl., pp. 2: 12-13, 3: 19-23.) Both Santana and Cruz corroborate Kayvon’s account of Nancy’s physical and mental limitations. In particular, they declare that Nancy suffers from severe short-term memory loss, and experiences bouts of agitation and confusion. (See Santana Decl., p. 2: 21-25; Cruz Decl., pp. 2: 25-28, 3: 1-3.)

Finally, Dr. Murthy declares: “Nancy Kordestani suffers from anoxic brain injuries. She is also severely limited physically and mentally. She has very poor short and long term memory. [¶] Nancy Kordestani should not be put in a situation that could stress her mental and physical well-being.” (Murthy Decl., p. 2: 4-7.)

In opposition, Plaintiffs contend that good cause does not exist for a protective order. They argue that none of Defendants’ evidence suggests that Nancy is incapable of reviewing written discovery responses or appearing for limited periods of time to offer deposition testimony. In this regard, Plaintiffs submit a number of declarations from the members of the Kordestani family concerning Nancy’s well being at Nasser Kordestani’s memorial on 13 April 2013. Each declarant avers that Nancy was lucid, attentive and communicative. (See, e.g., Behrouz Decl., p. 2: 7-12, Farhang Decl., p. 2: 10-15.) Thus, Plaintiffs conclude that Nancy does not lack the mental capacity to respond to discovery.

With regard to Nancy’s physical condition, Plaintiffs do not dispute that Nancy requires extensive physical assistance to perform her daily activities. Given her physical limitations, Plaintiffs suggest a number of reasonable accommodations to ameliorate the impact of discovery on Nancy’s health, including deposing her at or near her home, allowing as many breaks as desired, and taking the deposition over several days.

Finally, Plaintiffs contend that Nancy’s participation in discovery is essential to uncovering her role in George’s purported misappropriation and to authenticate evidence supporting the allegations of the complaint. Plaintiffs’ arguments are well taken.

Here, Defendants fail to demonstrate that the burden on Nancy of responding to the FI and appearing at her deposition clearly outweighs the likelihood that the information sought will lead to the discovery of admissible evidence. (See Emerson Electric Co. v. Superior Court, supra, 16 Cal.4th at pp. 1110-1111. )

With regard to her mental and communicative capacity, Defendants do not deny that Nancy is capable of reviewing documents or responding to questions. (See Reply, p. 2: 22-23 [“[N]o one suggests that Nancy Kordestani cannot speak, cannot sit up or is totally disabled. She is not a vegetable.”].) Thus, there is no indication that she lacks the mental acuity to testify at her deposition or respond to interrogatories. In regards to her physical limitations, while it appears that Nancy cannot leave her home for extensive periods of time, Defendants acknowledge that she is capable of short outings to physical education classes, movies, and restaurants. (See Kayvon Decl., pp. 2: 16-20, 3: 8-10.) Thus, there appears to be no reason Nancy cannot make a short outing for her deposition. In addition, as indicated above, in order to mitigate any physical strain a deposition might cause, Plaintiffs agree to provide a number of reasonable accommodations to ensure that Nancy’s deposition will not adversely affect her health.

Furthermore, Nancy likely has relevant, firsthand information concerning the purported misappropriation, and many of the documents evidencing the misappropriation are in her handwriting. Thus, her participation in discovery is likely to lead to the discovery of admissible evidence.

Accordingly, the burden of participating in discovery does not clearly outweigh Plaintiffs’ need for the information.

E. Conclusion

Based on the foregoing, Defendants’ motion for a protective order is DENIED, but the Court orders Plaintiffs to provide the reasonable accommodations discussed above to ensure that Nancy’s deposition will not adversely affect her health.

II. Requests for Monetary Sanctions

Both parties request monetary sanctions in connection with the motion for a protective order pursuant to Code of Civil Procedure sections 2025.420 and 2030.090.

Code of Civil Procedure sections 2025.420 and 2030.090 provide that the court shall impose a monetary sanction against any party who unsuccessfully makes or opposes a motion for protective order, unless the court finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust. (Code Civ. Proc., §§ 2025.420, subd. (h), 2030.090, subd. (d).)

The mutual requests for monetary sanctions are DENIED. This Court believes that both sides acted with substantial justification.

Conclusion and Order

Defendants’ motion for a protective order is DENIED, but the Court orders that Plaintiffs must depose Nancy at or near her home, allow reasonable breaks, and take her deposition over a period of days.

The mutual requests for monetary sanctions are DENIED. This Court believes that both sides acted with substantial justification.