2016-00197665-CU-NP

Bay Cities Paving & Granding, Inc. vs. Linda J. Clifford

Nature of Proceeding: Motion to Compel Deposition of PMK

Filed By: Shirley, Candace H.

Defendant Gary Janco’s Motion to Compel Deposition of Persons Most Qualified for Plaintiff Bay Cities Paving & Grading is GRANTED. THE cross-motions for sanctions are DENIED.

Plaintiff Bay Cities’ complaint named Gary Janco, a former director of CC Meyers, Inc. (“CCMI”), as a Doe defendant. This suit is brought by Bay Cities as a subcontractor on the Contra Costa Project, and alleges that the directors and officers of CCMI participated in the diversion of funds. Plaintiff alleges that the defendants, including Janco, knew that monies were owed to Bay Cities, but knowingly consented to the diversion of progress payments from Bay Cities for their own benefit.

On Oct. 26, 2017 Janco’s counsel served a Notice of Taking Deposition of the Person Most Qualified (PMQ) of Plaintiff Bay Cities Paving & Grading, calendared for Nov. 10, 2017, as to seven specified subjects, including facts supporting their allegations that Janco knew about, approved, did not object to or participated in the diversion of funds from Bay Cities, together with the production of 16 categories of documents.

An amended notice of the PMQ deposition set for Nov. 15, 2017 was served, to accommodate plaintiff’s counsel’s trial schedule, with the same seven categories of testimony.

After the continuance of the trial of this action to Jan. 29, 2018, a Second Amended Notice of Taking Deposition was served, scheduling the PMQ of Bay Cities’ deposition as to the same seven categories of testimony for Nov. 30, 2017.

Each of the seven subject matter categories is addressed to plaintiff Bay Cities’ allegations in paragraph 7 of the Complaint “that Defendant Janco was a director and officer of CC Myers during a lengthy period of time that CC Myers was actually insolvent under any accepted definition of insolvency, and oversaw and directed the unlawful diversion of progress payments received by CC Myers from various public agencies on account of numerous subcontractors’ and suppliers work on CC Myers’ joint venture projects with Plaintiff Bay Cities located throughout the State of California.” Defendant Janco seeks the testimony of Bay Cities PMQ as to all facts which support this allegation.

On Nov. 27, 2017, plaintiff Bay Cities served written objections to the PMQ deposition categories, asserting that the categories were akin to contention interrogatories, citing Rifkind v. Superior Court (1994) 22 Cal.App.4th 1255. Plaintiff stated that Bay Cities cannot produce a PMQ witness to testify because no such witness has the information sought nor is the information requested reasonably available to plaintiff.

If a deposition notice describes matters on which examination is requested, “the deponent shall designate and produce at the deposition those of its officers, directors, managing agents, employees, or agents who are most qualified to testify on its behalf as to those matters to the extent of any information known or reasonably available to the deponent.” As one treatise explains, “[t]he purpose of this provision is to eliminate the problem of trying to find out who in the corporate hierarchy has the information the examiner is seeking.” (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2001) para. 8:474, p. 8E-18.) (Maldonado v. Superior Court (2002) 94 Cal.App.4th 1390, 1395.)

Moving party Janco here asserts that the seven categories to be used in the determination of the appropriate person to designate as PMQ do not constitute questions which require the deponent to make a law-to-fact application beyond the competence of lay persons, thus Rifkin reasoning is inapplicable.

In opposition to this motion, plaintiff Bay Cities again asserts that the categories of testimony are contention interrogatories. Defendants contend that as they did not have a witness sitting on the Board of Directors of CCMI thus have no PMQ witness concerning CC Myers, Inc.’s internal board room corporate actions.

Despite this assertion, the Court will grant the motion, to allow defendant to fully explore the facts known to the plaintiff’s designated PMQ(s).

The deposition(s) shall be taken on a mutually agreeable date not later than Friday, Jan. 12, 2018.

The cross-motions for imposition of sanctions are denied, as both parties’ positions have substantial justification.