Palacios Pacheco, et al. v. U.S.-Sino Investment Inc., et al.		CASE NO. 112CV236494
DATE: 5 September 2014	TIME: 9:00	LINE NUMBER: 11

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 4 September 2014.  Please specify the issue to be contested when calling the Court and counsel.

On 5 September 2014, the motion of plaintiff Maria Leticia Palacios Pacheco for protective order regarding the deposition of defendant Dan Luo was argued and submitted. Defendant U.S.-Sino Investment Inc. and cross-defendant BSK Associates filed formal opposition to the motion.

Statement of Facts

This action arises out of the death of Raul Zapata Mercado (“Mr. Mercado”) and was filed by various plaintiffs, including Mr. Mercado’s widow, his family members, and his coworkers, against defendants U.S.-Sino Investment, Inc. (“U.S.-Sino”), Richard Xin Liu (“Mr. Liu”), Dan Luo (“Mr. Luo”), Apolinar Polo Perez (“Mr. Perez”), Polo Perez Construction, Polo Perez Construction, Inc., and Wesley Wun Shyong Chen (“Mr. Chen”) (collectively “Defendants”).

Plaintiffs allege that in the fall of 2011, U.S.-Sino began excavation and foundation construction on a property that was owned by Mr. Chen and located at 814 Calaveras Ridge Drive in Milpitas, California. Plaintiffs allege that U.S.-Sino is owned and operated by Mr. Liu and that U.S.-Sino is Mr. Liu’s alter ego.

On 25 January 2012, a building inspector from the City of Milpitas, Gerardo Amador (“Mr. Amador”), visited the work site and found the excavation and foundation work to be unsafe. Mr. Amador promptly issued a stop work order for the entire project due to the dangerous conditions. Plaintiffs allege that Mr. Amador handed the stop work order directly to Mr. Luo. Plaintiffs further allege that Mr. Luo ignored an oral demand from Mr. Amador on 26 January 2012, to stop work on the project. After receiving the stop work orders, Defendants did not notify the laborers at the Milpitas property that conditions were unsafe, and instructed the laborers—including Mr. Mercado—to continue working.  On 28 January 2012, the excavation collapsed, fatally suffocating and crushing Mr. Mercado.

Plaintiffs filed the operative first amended complaint (“FAC”) on 22 January 2013, alleging the following causes of action: (1) wrongful death (against all Defendants); (2) negligence (against all Defendants); (3) intentional infliction of emotional distress (against U.S.-Sino and Mr. Luo); and (4) wage claims (against U.S.-Sino, Mr. Luo, and Mr. Chen).

Discovery Dispute

On 27 June 2014, this court issued an order which stated, in relevant part, “Mr. Luo is required to submit to a deposition within 20 calendar days of the date of the production of docs on a date and time mutually agreed upon by the parties. Furthermore, within 20 calendar days of the date of the filing of this order, Mr. Luo shall provide verified code-compliant responses to the FI, SI, and RPD, without objections, and produce documents in accordance with his responses to the RPD.”

The parties mutually agreed upon 6 August 2014 for Mr. Luo’s deposition.

On 24 July 2014, Mr. Luo’s counsel notified all parties that Mr. Luo had been indicted on felony charges arising from the 28 June 2012 death of Mr. Mercado and would not be available to attend his deposition scheduled for 6 August 2014. (See ¶2 and Exh. A, Declaration of Mark P. Millen in Support of Plaintiff Pacheco’s Motion for Protective Order, etc. (“Declaration Millen”).)

On 25 July 2014, Ms. Pacheco’s counsel spoke to Mr. Luo’s counsel who indicated Mr. Luo would invoke the privilege against self-incrimination at any deposition. (See ¶3, Declaration Millen.)

On 6 August 2014, Ms. Pacheco filed an ex-parte application for an order continuing the deposition of Mr. Luo based on Mr. Luo’s felony indictment arising from the 28 June 2012 death of Mr. Mercado. On 6 August 2014, this court ordered the deposition of Mr. Luo stayed and set the matter for contested hearing on 5 September 2014.

On 7 August 2014, Ms. Pacheco filed the instant motion for protective order regarding the deposition of Mr. Luo.

On 22 August 2014, defendants U.S.-Sino and Mr. Liu filed an opposition to the motion. Also on 22 August 2014, cross-defendant BSK Associates (“BSK”) filed an opposition to the motion.

On 26 August 2014, defendant Mr. Luo filed a joinder to the opposition of U.S.-Sino and Mr. Liu.

Discussion

I.             Motion for Protective Order

               A.           Legal Standard

Before, during, or after a deposition, 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 matters. (Code Civ. Proc., § 2025.420, subds. (a) and (b).) Generally, the party or deponent seeking a protective order must show that the burden, expense, or intrusiveness involved in the taking of the deposition clearly outweighs the likelihood that the information sought will lead to the discovery of admissible evidence. (Code Civ. Proc., § 2017.020, subd. (a); see also Emerson Electric Co. v. Superior Court (1997) 16 Cal.4th 1101, 1110-1111.)

1. Request for Judicial Notice

In support of her motion for protective order, Ms. Pacheco requests judicial notice of this court’s 27 June 2014 order. Evidence Code section 452, subdivision (d) states that the court may take judicial notice of “[r]ecords of any court of this state.” This section of the statute has been interpreted to mean that the trial court may take judicial notice of the existence of the court’s own records. Evidence Code section 452 and 453 permit the trial court to “take judicial notice of the existence of judicial opinions and court documents, along with the truth of the results reached—in the documents such as orders, statements of decision, and judgments—but [the court] cannot take judicial notice of the truth of hearsay statements in decisions or court files, including pleadings, affidavits, testimony, or statements of fact.” (People v. Woodell (1998) 17 Cal.4th 448, 455.) Based on that authority, plaintiff Ms. Pacheco’s request for judicial notice in support of her motion for a protective order regarding the deposition of Dan Luo is GRANTED.

1. Meet and Confer

“The motion [for protective order] shall be accompanied by a meet and confer declaration under Section 2016.040.” (Code Civ. Proc., §2025.420, subd. (a).)

On 25 July 2014, after learning Mr. Luo would not attend his scheduled deposition, Ms. Pacheco’s counsel asserts he met and conferred with Mr. Luo’s counsel who agreed to postpone Mr. Luo’s deposition, suggesting 1 January 2015.[1] Mr. Luo’s counsel indicated she would not prepare a stipulation or a motion to continue the deposition, leaving plaintiff to decide how to proceed.[2]  Plaintiff chose to seek, by ex-parte application, an order continuing Mr. Luo’s deposition filing said ex-parte application on 6 August 2014.

On 6 August 2014, after the court denied plaintiff’s ex-parte application, but prior to filing the instant motion, Ms. Pacheco’s counsel met and conferred by email with counsel for U.S.-Sino and Mr. Liu and counsel for defendant Wayne Ting & Associates, Inc. (“Ting”) in the consolidated action of Chen v. U.S. Sino Investment, Inc.. et al., case number 1-13-CV-245057. (See ¶5, Declaration Millen.) Ms. Pacheco’s counsel also met and conferred by telephone with BSK’s counsel. In the meet and confer process, Ms. Pacheco’s counsel proposed a stipulated protective order, but the parties could not reach an agreement as to its terms.

Ms. Pacheco’s counsel contends “it was not possible to achieve any agreement or stipulation on a proposal with all parties before the deadline to file and serve this motion for hearing on September 5, 2014 as ordered by the Court.” Based upon this belief, Ms. Pacheco apparently made no further attempt to meet and confer and filed the instant motion on 7 August 2014.

While this may be a trivial point, the court notes Ms. Pacheco may have acted prematurely. In the court’s 6 August 2014 order, the court set this matter for contested hearing on 5 September 2014 stating, “All papers per Code.” Pursuant to Code of Civil Procedure section 1005, subdivision (b), “all moving and supporting papers shall be served and filed at least 16 court days before the hearing. The moving and supporting papers served shall be a copy of the papers filed or to be filed with the court. However, if the notice is served by mail, the required 16-day period of notice before the hearing shall be increased by five calendar days if the place of mailing and the place of address are within the State of California.” Based upon a hearing date of 5 September 2014 and in recognition of a court holiday on 1 September 2014, Ms. Pacheco would have had to file and serve (by mail) the instant motion no later than 8 August 2014. It is not clear what efforts were taken by Ms. Pacheco after 6 August 2014, but by this court’s calculation, Ms. Pacheco had one more day with which to continue her meet and confer efforts.

1. Merits

A protective order may direct “[t]hat the deposition be taken at a different time” or “[t]hat the deposition be taken only on certain specified terms and conditions.” (Code Civ. Proc., §2025.420, subds. (b)(2) and (b)(5).)

Ms. Pacheco proposes a protective order which continues Mr. Luo’s deposition until (1) the conclusion of criminal proceedings against Mr. Luo in which case his deposition shall begin within 20 days of the conclusion of such proceedings; (2) the court orders a deposition upon a showing of good cause by any party via ex-parte application; or (3) upon 10 days’ notice by plaintiffs’ counsel.

Ms. Pacheco contends such a protective order is warranted because the parties would incur undue burden and expense to depose Mr. Luo only to have Mr. Luo invoke the privilege against self-incrimination. In turn, Ms. Pacheco and others would be required to bring numerous motions to compel responses to even more numerous questions thereby placing a burden on judicial resources.

Defendants Mr. Liu and U.S.-Sino’s opposition is limited to requesting that the protective order increase the notice period required by plaintiffs’ counsel before setting Mr. Luo’s deposition, clarify the notice period, and require the time, date, and address of deposition to be included with any notice.

BSK, however, opposes issuance of a protective order in the first instance. In support, BSK cites Fuller v. Superior Court (2001) 87 Cal.App.4th 299 (Fuller). In Fuller, plaintiffs alleged they were beaten by defendant security guards. Plaintiffs noticed the deposition of the defendant security guards. “Fearing criminal prosecution arising from the same incident, the security guards moved the trial court for a protective order precluding the depositions, or staying them until the criminal statute of limitations expires.” (Fuller, supra, 87 Cal.App.4th at p. 302.) Plaintiffs “argued it would be unfair to permit the security guards to invoke the privilege against self-incrimination to avoid their disclosure obligations during discovery, only to then waive the privilege and testify at trial. To prevent prejudicial surprise, [plaintiffs] urged, if the trial court issued a protective order barring the security guards’ depositions, that it also issue an order prohibiting the security guards from testifying at trial.” (Id. at p. 303.) The trial court denied the defendant security guards’ motion for a protective order as well as plaintiffs’ request for an order excluding the security guards’ trial testimony if they exercised their privilege against self-incrimination during discovery.

The Fuller court affirmed the trial court’s ruling. In doing so, the court recognized three competing interests: “(1) that of the defendant who invokes his privilege against self-incrimination during discovery in civil litigation to avoid exposure to criminal prosecution; (2) that of the civil plaintiff who seeks to complete discovery without being unduly prejudiced if the defendant who invoked the privilege during discovery later waives it and testifies at trial; and (3) that of the justice system and the court in fairly and expeditiously disposing of civil cases.” (Id. at pp. 304 – 305.)

With regard to the first interest, the Fuller court wrote, “a party is not entitled to decide for himself or herself whether the privilege against self-incrimination may be invoked. Rather, this question is for the court to decide after conducting a particularized inquiry, deciding, in connection with each specific area that the questioning party seeks to explore, whether or not the privilege is well founded. … Only after the party claiming the privilege objects with specificity to the information sought can the court make a determination about whether the privilege may be invoked.” (Id. at p. 305; punctuation, citations, and footnote omitted.)

“Here, there is no dispute that the security guards function under the threat of criminal prosecution. However, depositions have not gone forward and so the trial court has not had an opportunity to ascertain whether petitioners seek information in discovery which might tend to incriminate the security guards. It is clear that the security guards may not invoke a blanket privilege against self-incrimination with respect to the whole deposition. The trial court must be given the opportunity to determine whether particular questions posed in the depositions would elicit answers that ‘support a conviction’ or that ‘furnish a link in the chain of evidence needed to prosecute the witness,’ and which may thus be subject to constitutional protection. [¶[ Because such exercise has not yet been undertaken here, the security guards’ request for a protective order and petitioners’ request for testimony preclusion were premature.” (Id. at p. 308; citations omitted.)

Based on Fuller, BSK contends Ms. Pacheco’s motion for protective order is premature and that the proper procedure is for Mr. Luo’s deposition to proceed at which time Mr. Luo may then assert the privilege. Fuller is distinguishable in one notable regard. In Fuller, the defendants sought the protective order. Here, it is plaintiffs who seek a protective order. Plaintiff Ms. Pacheco fully recognizes Mr. Luo has a right to assert the privilege, but that it is for the court to ultimately decide whether Mr. Luo properly invokes the privilege on a question-by-question basis. The Fuller court reasoned, essentially, that the defendants’ interest against self-incrimination is preserved even if their deposition is allowed to go forward. Here, since plaintiffs are the ones bringing the motion, defendants’ interest against self-incrimination is not the primary concern. To the extent this is even a concern for defendant Mr. Luo, he has not voiced it in connection with this motion.

Instead, the primary interest at issue here is the court’s interest in fairly and expeditiously disposing of civil cases, “and in efficiently utilizing judicial resources.” (Id. at p. 306.) In that regard, the concerns raised by Ms. Pacheco are legitimate. [The second competing interest identified in Fuller has not been raised here.] In balancing the competing interests of this case, the balance lies in favor of issuing a protective order based on the potential burden and expense on the parties and the potential burden on judicial resources.

BSK asks, in the alternative, that if the court issues a protective order, plaintiff should not be allowed to unilaterally set Mr. Luo’s deposition, but must also establish good cause. The court finds BSK’s request as well as Mr. Liu/ U.S.-Sino’s requests to be well taken.

Conclusion and Order

Plaintiff Maria Leticia Palacios Pacheco’s motion for protective order regarding the deposition of defendant Dan Luo is GRANTED upon the following terms and conditions. The deposition of Dan Luo shall be continued until: (1) the conclusion of State of California criminal proceedings against Dan Luo in which case the deposition shall commence upon 20 days’ notice by email, facsimile, or mail, by any party, that the deposition of Dan Luo will take place at a specified date, time, and location; (2) good cause is shown by any party by ex-parte application to the court in which case the deposition shall begin on a date indicated by the court; or (3) plaintiffs’ counsel sends 20 days’ notice by email, facsimile, or mail advising all parties, through their counsel if any, that the deposition of Dan Luo will take place at a specified date, time, and location. The date of notice and the date of deposition shall not be included in the notice period.

________________­­­____________ DATED:

_________________________­­­________________________ HON. SOCRATES PETER MANOUKIAN Judge of the Superior Court County of Santa Clara

 

[1] Ms. Pacheco’s counsel makes this assertion in the memorandum of points and authorities. However, Ms. Pacheco does not provide any evidentiary support, i.e., declaration, for this assertion.

[2] Again, this assertion lacks any evidentiary support.