Hitachi Data Systems, Inc. v. NSG Technology, Inc

Hitachi Data Systems, Inc. v. NSG Technology, Inc., et al.

CASE NO. 112CV224346

DATE: 10 July 2014

TIME: 9:00

LINE NUMBER: 6

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 26 June 2014.  Please specify the issue to be contested when calling the Court and counsel.

On 10 July 2014, the motion of Defendant NSG Technology, Inc. for a protective order to prevent the deposition of the person most qualified (“PMQ”) to answer questions related to Defendants’ residencies in a particular property on the grounds that such individual would be found in Taiwan.

Plaintiff Hitachi Data Systems, Inc. filed an opposition. Plaintiff also makes a request for monetary sanctions against Defendants NSG Technology and NWE Technology.

Plaintiff is reminded that all papers must comply with Rule of Court 3.1110(f).[1]

Background

This matter arises out of an unpaid electricity bill. In 1993 Hitachi leased approximately 107,393 square feet of a 188,640 square foot property. In 1997, Hitachi modified the lease to include a total of 161,568 feet. In May 2000, Hitachi reduced its occupancy to roughly 95,000 feet, while Defendant NWE Technology (“NWE”) leased almost 80,000 square feet. Over the next two years, NWE’s space increased, partly under sublease to Hitachi. For the period of August 2000 to April 2002, NWE paid Hitachi a flat monthly rate, including utilities.

In August 2001, Hitachi subleased space back from NWE for a few months. In April 2002, Hitachi’s lease expired, including its sublease with NWE. Hitachi entered into a new lease for the property for the approximately 25,000 square feet of the property that was not already under lease. Hitachi vacated in June 2007, but continued to pay for utilities through June 2010.

A dispute arose when Hitachi discovered that it had been paying for some of NWE’s (and NWE’s later assignee NSG’s) utilities. Hitachi contacted NSG asking for $36,000 to which NSG replied it would pay if it could prove that Hitachi was paying for the utilities controlled by NSG. Afterwards, Hitachi increased its claim to $409,000, seeking reimbursement for payments back to 2002.

The issue in this case is solely a matter of the statute of limitations and whether and when which party knew who was paying what.

On 20 May 2014, Hitachi served notice on Defendants that it sought the person’s most knowledgeable about particular matters related to who knew information about the property in question and the utilities in question.

On 19 June 2014, Defendants filed the instant motion seeking a protective order on the deposition.

Separate Statement

As an initial matter, Hitachi asserts that Defendants’ motion is defective because it lacks a separate statement. A separate statement, as related to a deposition, is required to compel answers at a deposition or to compel the production of documents at a deposition. Cal. Rules of Court, rules 3.1345(a)(4),(5).

The matter before the court is not to compel answers to questions that were asked, nor is it related to the production of documents at a deposition. The matter is simply whether Defendants PMQ, who allegedly resides in Taiwan, can be compelled to attend a deposition. As a result, no separate statement is required.

“Meet and Confer”

Plaintiff contends that Defendants failed to properly “meet and confer” before filing this motion.

A motion for a protective order shall be accompanied by a “meet and confer” declaration.  Code of Civil Procedure, § 2025.420.  A meet and confer declaration in support of a motion shall state facts showing a reasonable and good faith attempt at an informal resolution of each issue presented by the motion.  Code of Civil Procedure, § 2016.040.  Failure to meet and confer when required to do so is a discovery abuse.  Code of Civil Procedure, § 2023.010(i).

Defendants cite the Sange declaration, ¶¶ 8-10, for the proposition that they attempted to “meet and confer” with plaintiff prior to the filing of this motion.  These paragraphs to show a weak attempt to “meet and confer” with which the Court is less than impressed.  But it seems that the parties fixed their positions and wonders what additional “meet and confer” would have produced.

Memorandum of Points and Authorities

A memorandum of points and authorities must contain a statement of facts, a concise statement of the law, evidence, and arguments relied upon, and a discussion of the authorities cited. Cal. Rules of Court, rule 3.1113(b). Facts relied upon must be authenticated before a court may consider them. Cal. Evid. Code §1401(a). Authentication means the introduction of evidence sufficient to sustain a finding that it is the writing the proponent of the evidence claims it is. Cal. Evid. Code. §1400(a). Declarations are the proper means to authenticate a document, as they are sworn under penalty of perjury. See Weil, Civil Procedure Before Trial, ¶9:50a; See also Claudio v. Regents of the Univ of Cal. (3d. Dist. 2005) 134 Cal.App.4th 224, 244.

Defendants’ motion for a protective order cites and relies upon Code of Civil Procedure section 2025.440[2] indicating that it has the right to seek a protective order protecting Defendants from a deposition. Section 2025.420 states that the Court, for good cause shown, may make any order to protect [any deponent] from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense. Code Civ. Proc. §2025.420.

Defendants fail to cite any authority indicating what good cause means. Because of this lack in Defendants’ memorandum, the Court has no standards to determine whether any protective order is appropriate.

While the Court might make its own determination, this raises due process concerns, given that Plaintiff may and did write an opposition and should not be required to defend against both Defendants’ attorneys and the Court’s own research without proper notice. For this reason alone, the Court could deny Defendants’ motion. However, the Court also notes another troubling defect.

Defendants’ memorandum of points and authorities cites several exhibits, but fails to authenticate any of them. The Court has no factual basis before it to grant Defendants’ motion as it has no authenticated evidence before it. Such evidence could have been authenticated simply through one of the two declarations, as those declarations were made under penalty of perjury. However, this did not happen and the Court cannot grant this motion on the basis of considering the exhibits attached to the memorandum of points and authorities.[3]

However, the declaration of Benjamin Sange states, in ¶ 7, that he

“had several conversations with representatives of NSG and NWB concerning who would be their respective ‘person most knowledgeable’ on the topics in the PMQ Depositions.  We concluded that there was no one located in the United States that is qualified to address topics you love them-14.  (Topics are: 11.  Directors from 2000 to the present; 12.  Officers from 2000 to the present; 13.  Bylaws; and 14.  Articles of incorporation)”

Plaintiff cites Maldonado v. Superior Court (IGG Telecom Group) (2002) 94 Cal. App. 4th 1390, where the Court held that “[i]f the subject matter of the questioning is clearly stated, the burden is on the entity, not the examiner, to produce the right witnesses. And, if the particular officer or employee designated lacks personal knowledge of all the information sought, he or she is supposed to find out from those who do!”  (Id. at 1395-1396.)

However, Defendants claimed that the PMQ resides out of the country.  This Court is somewhat puzzled by the assertion that no one within deposition range is available.

Code of Civil Procedure, § 2025.250(a)-(c) sets geographic limits on where a deposition may be taken, and natural persons must be deposed within 75 miles from their residence, or in the county where the action is pending at a place within 150 miles of the deponent’s residence.  (Weil & Brown, supra, at ¶¶8:621-8:622, citing CCP § 2025.250(c).)

Code of Civil Procedure, § 2025.260 provides for exceptions.[4]  Subdivision (b) of that statute lists seven criteria by which this Court should determine whether, in the exercise of its discretion, order that Plaintiff Rosales should appear here in San Jose for his deposition.

However, Code of Civil Procedure, § 1989 states: “A witness, including a witness specified in subdivision (b) of Section 1987, is not obliged to attend as a witness before any court, judge, justice or any other officer, unless the witness is a resident within the state at the time of service.”  “Section 1989 applies not only to those witnesses obliged to attend as witnesses in court proceedings, but those witnesses obliged to give testimony by deposition before deposition officers.”  Toyota Motor Corp. v. Superior Court (2011) 197 Cal. App. 4th 1107, 1113.  There is simply no conflict between the plain language of sections 1989 and 2025.260.  Section 2025.260 permits depositions more than 75 (or 150) miles from a deponent’s residence, but section 1989 restricts a deponent from being required to attend a California deposition if the deponent is not a California resident.  (Id.)

There are other ways to obtain deposition testimony without the deponent being present in California.  These include deposing the PMQ via telephone pursuant to Code of Civil Procedure, § 2025.310(a) or having counsel travel to the location of the deponent to videotape the  Deposition pursuant to CCP section 2025.340.  Neither side makes mention of the foregoing

Plaintiff’s motion to compel the deposition of Defendants’ PMQ is DENIED.

Monetary Sanctions

Plaintiff requests an award of monetary sanctions against Defendants in the amount of $4,007 pursuant to Code of Civil Procedure sections 2023.010 and 2023.030.

Section 2023.010 defines acts that constitute misuses of the discovery process, and does not itself set forth any provisions regarding the issuance of a monetary sanction.

Next, section 2023.030 provides that sanctions may be imposed for misuses of the discovery process “[t]o the extent authorized by the chapter governing any particular discovery method or any other provision of this title.”  As such, section 2023.030 does not provide an independent basis for an award of sanctions and thus is not self-executing.  In other words, to invoke section 2023.030 as a basis for sanctions, the moving party must first be authorized to seek sanctions under the provisions in the Civil Discovery Act applicable to the discovery requests at issue.

Accordingly, Plaintiff’s request for monetary sanctions is DENIED.

Conclusion and Order

Defendants’ motion for a protective order is DENIED.

Plaintiff’s request for monetary sanctions is DENIED.

Having said that, in the event that either party wishes to contest this tentative ruling, this Court will order both sides to further “meet and confer” on other arrangements, such as a telephone/Skype deposition or the production of a suitable individual in a code compliant location.



[1] “Each exhibit must be separated by a hard 81/2 x 11 sheet with hard paper or plastic tabs extending below the bottom of the page, bearing the exhibit designation. An index to exhibits must be provided. Pages from a single deposition and associated exhibits must be designated as a single exhibit.”

[2] The Court notes that the citation itself is inaccurate, as Section 2025.440 refers to the imposition of sanctions where a deponent does not appear due to improper notice, or where a properly served deponent fails to appear or refuses to be sworn. The Court thinks it likely that Defendants intended to cite Section 2025.420.

[3] Because of the Court’s disposition of this motion, it makes no determination as to whether the meet and confer efforts between Defendant and Plaintiff were adequate. As above, it also lacks any factual basis on which to make that judgment.

[4] (a) A party desiring to take the deposition of a natural person who is a party to the action or an officer, director, managing agent, or employee of a party may make a motion for an order that the deponent attend for deposition at a place that is more distant than that permitted under Section 2025.250. This motion shall be accompanied by a meet and confer declaration under Section 2016.040.

(b) In exercising its discretion to grant or deny this motion, the court shall take into consideration any factor tending to show whether the interests of justice will be served by requiring the deponent’s attendance at that more distant place, including, but not limited to, the following: (1) Whether the moving party selected the forum.  (2) Whether the deponent will be present to testify at the trial of the action.  (3) The convenience of the deponent.  (4) The feasibility of conducting the deposition by written questions under Chapter 11 (commencing with Section 2028.010), or of using a discovery method other than a deposition.  (5) The number of depositions sought to be taken at a place more distant than that permitted under Section 2025.250.  (6) The expense to the parties of requiring the deposition to be taken within the distance permitted under Section 2025.250.  (7) The whereabouts of the deponent at the time for which the deposition is scheduled.

(c) The order may be conditioned on the advancement by the moving party of the reasonable expenses and costs to the deponent for travel to the place of deposition.

(d) The court shall impose a monetary sanction under Chapter 7 (commencing with Section 2023.010) against any party, person, or attorney who unsuccessfully makes or opposes a motion to increase the travel limits for a party deponent, 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.”

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