Palacios-Pacheco v. U.S.-Sino Investment, Inc.

Palacios-Pacheco v. U.S.-Sino Investment, Inc. CASE NO. 112CV236494
DATE: 24 October 2014 TIME: 9:00 LINE NUMBER: 18

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 23 October 2014.  Please specify the issue to be contested when calling the Court and counsel.

On 24 October 2014, the motion of Defendant U.S.-Sino Investment, Inc. for a protective order staying the deposition of the Person Most Knowledgeable (“PMK”) of Defendant U.S.-Sino Investment, Inc. was argued and submitted.

Plaintiff filed formal opposition to the motion.[1]

  1. 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).

In late July of this year, the Santa Clara County Grand Jury returned an indictment on charges of involuntary manslaughter and other charges against Defendants “U.S.-Sino”, Mr. Liu, and Mr. Luo.

  1. Discovery Dispute.

On 18 August 2014, Plaintiffs noticed the deposition of the PMK  of U.S.Sino for the date of 10 September 2014 on 126 topics.  The parties began to meet and confer on this subject on 28 August 2014.  Defendants allege that Mr. Liu is the only possible individual who can serve as a PMK.

On 5 September 2014, this Court granted the motion of Plaintiff to stay the deposition of Mr. Luo.

Also on 5 September 2014, after an inquiry from Plaintiff’s counsel, Defendant’s counsel informed all other counsel that the deposition of U.S.-Sino was off calendar and would seek a protective order.

III.     Analysis

  1. Objections to Pimentel Declaration

Plaintiff made objections to the declaration of Lauren Pimentel, counsel for Defendants, submitted in support of Defendants’ motion for protective order.

Plaintiff first makes a general objection on the ground that the declaration lacks foundation, improperly states legal conclusions or makes unsupported legal conclusions, contains hearsay, and has no evidentiary value if taken as a whole.

As a matter of general information, this Court is not required to rule on evidentiary objections and discovery matters.

Ms. Pimentel’s declaration is made on the grounds of personal knowledge, is strictly factual, making no legal conclusions, provides a sufficient foundation for Ms. Pimentel’s knowledge and the introduction of Exhibit A, Plaintiff’s Notice of Deposition, and as a whole, tends to making the grounds for Defendants’ motion more likely than not. Plaintiff’s general objections are OVERRULED.

Plaintiff next makes specific objections to Ms. Pimentel’s statement that she is personally familiar with all the facts set forth and if called and sworn as a witness, could competently testify to those facts based on personal knowledge. Plaintiff objects on the grounds of hearsay, lack of knowledge, lack of relevance and improper legal conclusion.

Ms. Pimentel’s declaration is based on her personal knowledge, so the hearsay objection does not apply. Her declaration states under penalty of perjury that it is based on her knowledge, so the lack of knowledge does not apply. If true, Ms. Pimentel’s declaration tends to make the grounds for Defendant’s motion more likely valid, so the relevance objection must fail. Ms. Pimentel’s declaration, in particular as to the challenged line, makes no legal conclusion, so the improper legal conclusion objection is also without merit. Plaintiff’s objection 1 is OVERRULED.

Plaintiff finally makes specific objections to Ms. Pimentel’s statement that U.S.-Sino is a corporation and Richard Xin Liu was its only employee and that she is informed and believed that Mr. Liu resides in Beijing. Plaintiff objections on the grounds of hearsay, that this statement calls for an expert opinion, that Ms. Pimentel lacks personal knowledge, that the statement lacks relevance, and that there is an improper legal conclusion.

As above, Plaintiff’s objections are overruled. There is no hearsay, knowledge, relevance or improper legal conclusion issue. Ms. Pimentel’s statement indicates her knowledge as a fact, not an opinion so the calls for expert opinion objection is meritless. Plaintiff’s objection 2 is OVERRULED.

While the Court appreciates counsel’s fervor to represent Plaintiff, the Court reminds counsel that making meritless objections may be sanctionable. Plaintiff supplied no basis for any of the objections raised. Defendant did not raise the issue of sanctions in its reply and the Court will not consider the matter further.

  1. Requests for Judicial Notice

A party may compel the Court to take judicial notice of a matter, provided it gives sufficient notice to the other party to allow it to challenge the request, and provides the Court enough information to enable it to take judicial notice of the matter. Cal. Evid. Code §453. Matters which may be judicially noticed include facts or propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy. Cal. Evid. Code §452(h). Records of this court, or other courts are also subject to permissive notice. Cal. Evid. Code §452(d).

Plaintiff makes requests for judicial notice of five documents. The first is an arrest warrant issued by the Superior Court of California, County of Santa Clara, for the arrest of Defendant Richard Liu. This is a record of a court and is relevant to Plaintiff’s claim that Mr. Liu is a fugitive. The Court will take judicial notice of this document.

The second document is an abstract of a webpage from the California Secretary of State, taken 1 October 2014, showing the business detail for Defendant U.S.-Sino Investment. This document indicates that Defendant Liu is the agent for the service of process and gives an address for this process. The record itself is a copy of a government document not reasonably subject to dispute. The contents of the document are relevant to Plaintiff’s claim that Mr. Liu may be a Fremont resident, but also that U.S.-Sino is an active entity. The Court will take judicial notice of this document.

The third document is an order issued by this Court on 8 May 2014 continuing a hearing on a motion to compel further responses to allow Defendant time to take the necessary steps to get the corporation reinstated.[2] Because the reinstatement requires an active agent for service of process, this document is relevant to Plaintiff’s claim that either Mr. Liu is a Fremont resident, or that he fled and filed false documentation with the Secretary of State. The Court will take judicial notice of this document.

The fourth document is copy of a web notice from the U.S. State Department that indicates that China does not allow attorneys to take depositions in China for use in foreign courts. This is an official document from the State Department and is not reasonably subject to dispute. The document is relevant to show that relief in the form of ordering a deposition in China would be unavailing. The Court will take judicial notice of this document.

The fifth document is a copy of court records in Mr. Liu’s criminal case that consists of the declaration of Greg Korver, an investigator in the District Attorney’s office describing Mr. Korver’s attempts to serve U.S.-Sino with the corporate summons. This document is part of a Court record and the Court will take judicial notice of the existence of the document. The Court will not take the contents of the document as true, but will instead weigh the statements with the knowledge that the statements cannot be cross-examined, should the statements made be relevant.

  1. Motion for Protective Order

Code of Civil Procedure, § 2025.420 states, in part:

“(a) Before, during, or after a deposition, any party, any deponent, or any other affected natural person or organization may promptly move for a protective order. The motion shall be accompanied by a meet and confer declaration under Section 2016.040.  (b) The court, for good cause shown, may make any order that justice requires to protect any party, deponent, or other natural person or organization from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense. This protective order may include, but is not limited to, one or more of the following directions:  (1) That the deposition not be taken at all. . . . (5) That the deposition be taken only on certain specified terms and conditions.”

Corporations generally have no Fifth Amendment rights. (See Bellis v. United States, 417 U.S. 85, 88 (1974); Braswell v. United States, 487 U.S. 99 (1988); Avant! Corp. v. Superior Court (2000) 79 Cal. App. 4th 876. Parties to actions generally cannot ask for the assistance of a court in hearing requests for relief while standing in contempt oof legal orders and processes. MacPherson v. MacPherson (1939) 13 Cal.2d 271, 277. This is the so-called Fugitive Disentitlement Doctrine.

Fugitive disentitlement is a discretionary use of the Court’s powers that may be applied when the balance of all equitable concerns leads to Court to conclude that it is a proper sanction for a party’s flight. Polanski v. Superior Ct. (2009) 180 Cal.App.4th 507, 533. The doctrine is commonly applied to individuals seeking relief where the party is a fugitive from justice. See Polanski, supra, 180 Cal.App.4th at 533; see also Molinaro v. New Jersey (1970) 396 U.S. 365; United States v. $129,374 in U.S. currency (9th Cir. 1985) 769 F.2d 583.

Defendant Liu has a warrant for his arrest issued in relation to his criminal indictment with bail upon arrest set at $1,000,000. He, along with Defendant U.S.-Sino Investment, brings the instant motion seeking relief from deposition on the grounds that Defendant Liu’s Fifth Amendment rights may be impinged.

U.S.-Sino does not, in itself, have a Fifth Amendment right. It does, however, have a duty to identify the person most knowledgeable or most qualified (“PMK”/”PMQ”) to sit for deposition on particularized matters. U.S.-Sino contends that Defendant Liu is the only person qualified to sit for deposition. It indicates that the only other officer listed is an officer “in title only”, and has no knowledge of the matters that Plaintiff seeks information about. Defendant must, nevertheless, name a current officer or employee who can sit for deposition and deal with the potential consequences, including possible sanctions, of being unable to produce anyone with knowledge.

The Court is mindful that if required to sit for deposition, Mr. Liu, may have to assert his Fifth Amendment privilege, but that still requires Mr. Liu to be available for deposition. Presently, he allegedly is in China. Defendant has indicated that Mr. Liu will be returning to California on or before 17 November 2014 for his criminal trial. Should he do so, and no longer remain a fugitive, he may properly assert his rights. The Court will give Defendant Liu the benefit of the doubt to return and allow both parties to fashion a protective order as it relates to Defendant Liu and Defendant U.S. Sino.

Given that Defendant Liu represents that he will return to this country and surrender on or before 17 November 2014, this Court will GRANT the motion for protective order but will order the protective order is effective only until 24 November 2014 in order to give time to the parties to negotiate any protective order that might be in the interests of all parties.  Plaintiffs may seek modification of this order on ex parte application should Mr. Liu choose not to return to this country as indicated.

  1. Order.

Defendants’ request for a protective order is GRANTED IN PART. The protective order will remain in place only until 24 November 2014 to allow time for the parties to negotiate any protective order that may be in the interests of all parties.

If Mr. Liu does not return to California by 17 November 2014, Plaintiffs may seek modification of this order on ex parte application.

 

________________­­­____________

DATED:

_________________________­­­________________________

HON. SOCRATES PETER MANOUKIAN

Judge of the Superior Court

County of Santa Clara

[1] “The failure to file a written opposition or to appear at a hearing or the voluntary provision of discovery shall not be deemed an admission that the motion was proper or that sanctions should be awarded.”  Rule of Court 3.1348(b).

[2] This document was identified as Exhibit D in Plaintiff’s declaration, but was actually Exhibit C. The next document, from the U.S. State Department was identified as Exhibit C, but was actually Exhibit D.

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