Superior Court, State of California



DATE: November 24, 2020 TIME: 9:00 A.M.

In light of the shelter-in-place order due to COVID-19, all appearances MUST be made by Court Call, unless the Court otherwise authorizes. If any party wishes to use a court reporter, the appropriate form (CV-5100) must be submitted to the Court for approval and the reporter must work remotely and cannot be physically present in the courtroom. If the Court permits someone to personally appear for a hearing, that person must observe appropriate social distancing protocols and must wear a face covering, unless the Court authorizes otherwise.

Any person entering Department 6 must observe appropriate social distancing protocols and must wear a face covering, unless the Court authorizes otherwise.

The public may access hearings in this department. Please check the court website for Department 6’s public access phone number.

As a reminder, state and local court rules prohibit recording a court proceeding without a court order. This includes members of the public listening in on the public access line.

Judge Folan WILL PREPARE ORDER unless counsel/prevailing party is instructed otherwise.

(SEE RULE OF COURT 3.1312 – PROPOSED ORDER MUST BE E-FILED BY COUNSEL AND SUBMITTED PER 3.1312(C))

EFFECTIVE JULY 24, 2017, THE COURT WILL NO LONGER PROVIDE OFFICIAL COURT REPORTERS FOR CIVIL TRIALS OR LAW AND MOTION HEARINGS. SEE COURT WEBSITE FOR POLICY AND FORMS.

TROUBLESHOOTING TENTATIVE RULINGS

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|LINE # |CASE # |CASE TITLE |RULING |

|LINE 1 | 18CV333414 | Mantis Funding LLC vs Happy Days Security | Order of Examination of Mr. Sobayo. Proof of Service Submitted. |

| | |Services International Limited Liability |Please practice social distancing protocols when conducting the OEX. |

| | |Company et al | |

|LINE 2 | 20CV366806 | Fairillia Turner vs Trinity Financial |Click Control Line 2 for Tentative Ruling |

| | |Services LLC et al | |

|LINE 3 | 19CV349592 |Raquel Monge Mejia vs Pupuseria Los Dubon, | Click Control Line 3 for Tentative Ruling |

| | |Inc. | |

|LINE 4 | 18CV322879 | Ubiquiti Networks, Inc. vs National Union |Click Control Line 4 for Tentative Ruling |

| | |Fire Insurance Company of Pittsburg, PA | |

|LINE 5 | 19CV341808 |A. Gutierrez v. General Motors |Counsel to report on whether supplemental responses have been produced|

| | | |after an IDC. |

|LINE 6 | 19CV355992 |Philomena Agbontaen vs Susan Jackson |Cross-defendant Philomena Agbontaen’s Motion to Compel Responses to |

| | | |Form Interrogatories, Special Interrogatories, Request for Statement |

| | | |of Damages, Requests for Documents from Cross-complainant Susan |

| | | |Jackson and for monetary sanctions is UNOPPOSED and GRANTED, good |

| | | |cause appearing. Susan Jackson is ordered to provide code compliant |

| | | |verified responses, without objections, to the subject Form |

| | | |Interrogatories, set one, Special Interrogatories, set one, Request |

| | | |for Statement of Damages and Request for Documents, Set one, all of |

| | | |which were served on May 1, 2020, and produce documents thereon within|

| | | |20 days of service of this order. Susan Walker and her counsel Quinn |

| | | |Chevalier shall be jointly or severally responsible to pay monetary |

| | | |sanctions in the amount of $840 to Ms. Agbontaen pursuant to the |

| | | |authorities cited in moving party’s motion. The Court shall prepare |

| | | |the order. |

|LINE 7 | 19CV356609 | Julio Montano vs BMW OF NORTH AMERICA, LLC |Plaintiff’s Motion to Compel is OFF CALENDAR as this Court granted |

| | | |defendant’s Motion to Compel Arbitration and Stay Proceedings on |

| | | |November 12, 2020. |

|LINE 8 | 20CV362376 | Sarah Vaughn vs Linda Hibbs et al |Plaintiff’s Motion to Compel Further Responses from Defendant Covia to|

| | | |Special Interrogatories is OFF CALENDAR after successful IDC. |

|LINE 9 | 20CV362376 | Sarah Vaughn vs Linda Hibbs et al |Plaintiff’s Motion to Compel Further Responses from Defendant Covia to|

| | | |Form Interrogatories is OFF CALENDAR after successful IDC |

|LINE 10 | 20CV362376 | Sarah Vaughn vs Linda Hibbs et al |Plaintiff’s Motion to Compel Further Responses from Defendant Hibbs to|

| | | |Special Interrogatories is OFF CALENDAR after successful IDC |

|LINE 11 | 20CV362376 | Sarah Vaughn vs Linda Hibbs et al |Plaintiff’s Motion to Compel Further Responses from Defendant Hibbs to|

| | | |Requests for Production of Documents is OFF CALENDAR after successful |

| | | |IDC |

|LINE 12 | 20CV362376 | Sarah Vaughn vs Linda Hibbs et al |Plaintiff’s Motion to Compel Further Responses from Defendant Hibbs to|

| | | |Form Interrogatories is OFF CALENDAR after successful IDC |

|LINE 13 | 20CV362376 | Sarah Vaughn vs Linda Hibbs et al |Plaintiff’s Motion to Compel Depositions of Nurse Kaur and Nurse Orn |

| | | |is OFF CALENDAR after successful IDC |

|LINE 14 | 20CV362376 | Sarah Vaughn vs Linda Hibbs et al |Click Control Line 14 for Tentative Ruling |

|LINE 15 | 17CV305663 | Andy Khanna vs Vince Khanna et al |Defendants James Sarrail and Sarrail, Castillo and Hall, LLP’s Motion |

| | | |for Attorney Fees and Costs after Appeal is GRANTED. Defendants are |

| | | |entitled to recover their attorney’s fees and costs in the appeal of |

| | | |the successful Anti-SLAPP motion. Evans v. Unkow (1995) 38 CA 4th |

| | | |1490, 1499. This is not a SLAPPback case so plaintiff’s arguments in |

| | | |that regard are inapplicable. Defendants’ right to recover fees is |

| | | |not affected by any insurance they may have. Nemecek &Cole v. Horn |

| | | |(2012) 208 CA4th 641,652. Syers Properties III Inc. v. Rankin (2014) |

| | | |226 CA4th 691,701. The Court is employing the lodestar method to |

| | | |determine appropriate attorney fees. Ketchum v. Moses (2001) 24 Cal |

| | | |4th 1122, 1131. The Court has thoroughly reviewed invoices and other |

| | | |evidence supporting the hours defense counsel expended as well as the |

| | | |hourly rate they seek. PLCM Group v. Drexler (2000)22 Cal 4th 1084, |

| | | |1095. Given defense counsels’ decades of experience and the complexity|

| | | |of this case, the Court finds the hourly rate sought reasonable in |

| | | |this legal community for similar work. The Court also finds the hours |

| | | |expended reasonable and necessary. Based on this motion, plaintiff |

| | | |must pay these defendants $133,185 in attorney’s fees and $527.42 in |

| | | |costs under CCP section 425.16 (c) 1 and the Court of Appeal’s order |

| | | |that plaintiff bear all costs on appeal. The Court will prepare the |

| | | |order. |

|LINE 16 | 17CV305663 | Andy Khanna vs Vince Khanna et al |Defendant Vince Khanna’s Motion for Attorney Fees and Costs is |

| | | |GRANTED. Defendant’s Request for Judicial Notice is GRANTED. Vince |

| | | |is entitled to recover his attorney’s fees and costs in the appeal of |

| | | |the successful Anti-SLAPP motion. Evans v. Unkow (1995) 38 CA 4th |

| | | |1490, 1499. This is not a SLAPPback case so plaintiff’s arguments in |

| | | |that regard are inapplicable. The Court is employing the lodestar |

| | | |method to determine appropriate attorney fees. Ketchum v. Moses (2001)|

| | | |24 Cal 4th 1122, 1131. The Court has thoroughly reviewed invoices and |

| | | |other evidence supporting the hours defense counsel Larsen expended as|

| | | |well as the hourly rate he seeks. PLCM Group v. Drexler (2000)22 Cal |

| | | |4th 1084, 1095. Given attorney Larsen’s more than 3 decades of |

| | | |experience and the complexity of this case, the Court finds the hourly|

| | | |rate sought reasonable in this legal community for similar work. The |

| | | |Court also finds the hours expended reasonable and necessary. The |

| | | |Court notes that Vince is seeking fees for a different time frame than|

| | | |the Sarrail defendants and that is why his fee request is larger. The|

| | | |Court does not find that attorney Larsen simply plagiarized Roper, |

| | | |Majeski’s work. He has an independent duty to his client and made an|

| | | |independent analysis and evaluation of similar work. The appellate |

| | | |court rejected this argument and so does this court. Based on this |

| | | |motion, the Court awards Vince attorney’s fees in the amount of |

| | | |$144,495 and costs in the amount of $5,526.97 pursuant to CCP section |

| | | |425.16 (c) 1 and the Court of Appeal’s order that plaintiff bear all |

| | | |costs on appeal. The Court will prepare the order. |

|LINE 17 | 18CV325760 | Heydi Humphers vs Maribel Guzman |The Motion of Plaintiffs Heydi Humphers and Riviera Nayarita Inc. for |

| | | |an order directing County Auditor or Controller to Draw Warrant to Pay|

| | | |Money on Deposit pursuant to CCP 573 and Gov. Code 68084 is UNOPPOSED |

| | | |and GRANTED, good cause appearing. Moving parties shall prepare order|

| | | |requiring the sum of $15,773.43 to be returned back to moving parties.|

|LINE 18 |20CV370351 |Sujith Polpaya et al vs Taylor Morrison of |The Petition to Compel Arbitration is continued to January 21, 2021 |

| | |California, LLC |pursuant to stipulation and order. |

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Case Name: Turner v. Trinity Financial Services, LLC

Case No.: 20CV366806

This is an action for wrongful foreclosure. According to the allegations of the complaint, on May 28, 2004, plaintiff Fairillia Turner (“Plaintiff”) purchased real property at 315 Grandpark Circle in San Jose (“subject property”). (See complaint, ¶ 8.) On October 23, 2014, an assignment of deed of trust from National City Bank to Trinity Financial Services, LLC was recorded with the Santa Clara County Recorder’s Office. (See complaint, ¶ 9, exh. 1.) Plaintiff contends that National City Bank was defunct on October 23, 2014 when the assignment was recorded and therefore, the individual signing the document, James Kucherka, was not authorized to execute the subject document, has committed a fraud upon the court, was employed not by National City Bank but by Relevant Solutions, LLC, is a robo-signer and did not sign the document because there are multiple examples of his signature in official records and they do not match the subject document, thereby voiding the document and rendering it unenforceable. (See complaint, ¶¶ 10-12.)

On March 3, 2020, defendant Trinity Financial Services, LLC (“Defendant”) recorded a notice of default, which Plaintiff contends entitles her to monetary relief of $3 million and exemplary damages of $9 million. (See complaint, ¶ 14.) According to Plaintiff, California Secretary of State records show that Defendant is banned from doing business and the mortgage is void, and Defendant is barred from enforcement of the mortgage or any affirmative action to enforce the mortgage including filing a foreclosure action or seeking the forced sale of the property. (See complaint, ¶¶ 15-16.) As a result of the coronavirus pandemic, and the government’s failure to provide relief, Plaintiff cannot earn money necessary to redeem the mortgage if it were a lawful mortgage. (See complaint, ¶¶ 17-20.) Plaintiff also contends that the mortgage is unenforceable due to the doctrines of force majeure, illegality, commercial impracticability and impossibility due to the coronavirus pandemic. (See complaint, ¶¶ 21-25.) Plaintiff also contends that she has standing to challenge the purportedly fraudulent assignment because under Covid, her duty to pay the mortgage was forgiven, while Defendant still attempts to enforce it, causing her harm and severe emotional distress. (See complaint, ¶ 27.) Plaintiff also contends that due to Covid, her ability to redeem the property prior to sale is impossible, illegal or commercially impracticable and therefore her duties under the subject mortgage are no longer existent. (See complaint, ¶ 32.)

Due the fraud perpetrated by Defendant and the fact that no payment has been made to Defendant in more than four years because of their illegal recording of a fraudulent document, Plaintiff contends that she has no duty to tender. (See complaint, ¶ 33.) Plaintiff seeks an injunction voiding the mortgage and staying the enforcement forever of the subject mortgage and quieting title in Plaintiff’s favor. (See complaint, ¶ 34.) Plaintiff also contends that the deed of trust is illegal and unenforceable and any assignment is illegal. (See complaint, ¶ 35.) On May 26, 2020, Plaintiff filed the instant complaint against Defendant, asserting causes of action for:

1) Wrongful foreclosure;

2) Violation of Civil Code § 2924;

3) Permanent injunctive relief to stay any future sale;

4) To void or cancel any assignment of mortgage and/or substitution of trustee and notice of defaults;

5) Breach of contract;

6) Preliminary and permanent injunctive relief under Business & Professions Code § 17200, et seq.;

7) Quiet title;

8) California Fair Debt Collection Practices Act;

9) Civil Conspiracy; and,

10) Fraud and/or concealment.

Defendant demurs to each cause of action of the complaint on the ground that it fails to state facts sufficient to constitute a cause of action.

Defendant’s request for judicial notice

In support of its demurrer, Defendant requests judicial notice of the following documents:

1) The deed of trust, recorded on November 8, 2006 with the Santa Clara County Recorder’s Office (attached as Exhibit 1);

2) The assignment of the deed of trust, recorded on July 20, 2015 with the Santa Clara County Recorder’s Office (attached as Exhibit 2);

3) The second deed of trust, recorded on May 10, 2007 with the Santa Clara County Recorder’s Office (attached as Exhibit 3);

4) The assignment of the deed of trust recorded on October 23, 2014 with the Santa Clara County Recorder’s Office (attached as Exhibit 4);

5) The substitution of trustee recorded on March 3, 2020 with the Santa Clara County Recorder’s Office (attached as Exhibit 5);

6) The notice of default and election to sell recorded on March 3, 2020 with the Santa Clara County Recorder’s Office (attached as Exhibit 6);

7) Plaintiff’s Chapter 13 voluntary petition filed on December 12, 2016 in United States Bankruptcy Court for the Northern District of California, case number 16-53471 (attached as Exhibit 7);

8) The summary of assets and liabilities for individual and schedules A-J filed on January 6, 2017 in the 2016 bankruptcy (attached as Exhibit 8);

9) The order discharging the Chapter 13 trustee after case dismissal and final decree entered on October 14, 2017, in the 2016 bankruptcy (attached as Exhibit 9);

10) The complaint filed in Turner v. The Bank of New York Mellon fka The Bank of New York, et al. (Super. Ct. Santa Clara County, 2018, Case No. 18CV340192), removed to U.S. Dist. Ct. on February 22, 2019, docketed as case number 19-CV-00993-LHK (attached as Exhibit 10); and,

11) The California Secretary of State Certificate of Status for Trinity Financial Services, LLC, signed and dated August 26, 2020 (attached as Exhibit 11).

The request for judicial notice is GRANTED as to the existence and facial contents of the documents recorded with the Santa Clara County Recorder, but not as to the disputed or disputable facts stated therein. (See Placer Foreclosure, Inc. v. Aflalo (2018) 23 Cal.App.5th 1109, 1112 (taking judicial notice of recorded documents related to the deed of trust and foreclosure sale, pleadings related to wrongful foreclosure suit, and moving papers related to motion to dismiss appeal); see also Intengan v. BAC Home Loans Servicing LP (2013) 214 Cal.App.4th 1047, 1055 (judicial notice of trustee on deed of trust, and that trustee was trustee from beginning and throughout the date of notice of default and notice of trustee sale, proper); see also Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 924, fn.1 (stating that request for judicial notice of the existence and facial contents of the contents of the recorded deed of trust, assignment of the deed of trust, substitution of trustee, notices of default and of trustee's sale, and trustee’s deed upon sale was proper); see also McElroy v. Chase Manhattan Mortgage Corp. (2005) 134 Cal.App.4th 388, 394 (taking judicial notice of notice of default and election to sell under deed of trust recorded in county recorder office).) The request for judicial notice is GRANTED as to the petition, summary of assets and liabilities, schedules A-J, and the order discharging the Chapter 13 trustee after case dismissal and final decree. (See Evid. Code § 452, subd. (d); see also Flores v. Arroyo (1961) 56 Cal.2d 492, 496-497 (California Supreme Court stating that the court may take judicial notice of judgments in prior cases provided that it “was appropriately drawn to the attention of that court, and plaintiff had adequate notice and opportunity to be heard on the question of the effect of such judgment”); see also City of Sacramento v. State Water Resources Control Bd. (1992) 2 Cal.App.4th 960, 968, fn. 3 (taking judicial notice of file in separate case involving same parties); see also Colvig v. RKO General, Inc. (1965) 232 Cal.App.2d 56, 63 (stating that, in a demurrer, “the court below was entitled to take judicial notice of such other action since it was appropriately drawn to its attention”); see also Roberson v. City of Rialto (2014) 226 Cal.App.4th 1499, 1503, fn.3 (taking judicial notice of court records in prior case where parties asserted that prior case had res judicata effect); see also Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 483 (taking judicial notice of the pleadings and related court records in another case pending before trail court pursuant to Evidence Code section 452, subdivision (d)); see also PrediWave Corp. v. Simpson Thacher & Bartlett LLP (2009) 179 Cal.App.4th 1204, 1213, fn.4 (taking judicial notice of bankruptcy order); see also Bunch v. Hoffinger Industries, Inc. (2004) 123 Cal.App.4th 1278, 1290 (taking judicial notice of multiple documents related to proceedings in bankruptcy court); see also Padron v. Watchtower Bible & Tract Society of New York, Inc. (2017) 16 Cal.App.5th 1246, 1263, fn.7 (taking judicial notice of defendant’s opening appellate brief in separate case involving similar issue and stating that defendant was judicially estopped from making argument to the contrary of argument in that appellate brief).) The request for judicial notice is also GRANTED as to the California Secretary of State Certificate of Status for Trinity Financial Services, LLC. (See Evid. Code § 452, subd. (c); see also Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism (2016) 6 Cal.App.5th 1207, 1215 (taking judicial notice of business entity detail from the California Secretary of State's Web site); see also Friends of Shingle Springs Interchange, Inc. v. County of El Dorado (2011) 200 Cal.App.4th 1470, 1484 (stating judicial notice of California Secretary of State Certificate of Status is proper subject of judicial notice).)

The admission that Defendant was a secured creditor

Judicially noticeable facts indicate that Plaintiff has admitted that Defendant was a secured creditor of the subject loan, declared under penalty of perjury that the schedules she filed were true and correct, and failed to list any claim against Defendant in an answer regarding an express question about counterclaims whether she had filed a lawsuit or made a demand for payment. The complaint alleges that the purportedly illegal and fraudulent assignment occurred years prior to Plaintiff’s filing of her bankruptcy petition in which she stated that Defendant was a secured creditor and did not disclose any claims related to the purported illegality or fraud of that assignment. Accordingly, as stated in Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, with similar facts, the court affirmed the sustaining of the demurrer, stating: “[t]here is nothing here to take the case outside the Oneida Motor Freight rule, reiterated in Gottlieb, that ‘in completing bankruptcy schedules, a debtor should list any legal claims against a creditor whose wrongful conduct caused the bankruptcy; otherwise, an action on the claim is barred.’” (Id. at pp.1609-1614 ( noting that “plaintiff Henry Hamilton declared under penalty of perjury that the schedules he filed were true and correct, and he failed to list his claim against the bank, one of his principal creditors, in answer to an express question about counterclaims and setoffs… [t]he complaint shows the events on which plaintiffs base their fraud and breach of contract claims against the bank occurred many months before plaintiff filed his bankruptcy proceeding, so he must have known of the facts allegedly justifying the claim, yet he failed to disclose the claim”).)

In opposition, Plaintiff filed a 39-page opposition and did not apply to the court for permission to file a longer memorandum, in violation of Rule of Court 3.1113. (See Rules of Court 3.1113, subd. (d) (stating “no opening or responding memorandum may exceed 15 pages”).) The opposition neither has a table of contents, nor a table of authorities, nor an opening summary of argument. (See Rules of Court 3.1113, subd. (f).) It is hence considered in the same manner as a late-filed manner. (See Rule of Court 3.1113, subd. (g).) Despite an opposition that is voluminous, Plaintiff’s lone argument is that Defendant “is attempting to get the court to consider facts outside of the four corners of the complaint… [and] did NOT ask the court to take judicial notice of any records which contradict the SECRETARY OF STATE’S OWN WEBSITE….” (Pl.’s opposition to demurrer (“Opposition”), p.16:21-28.) While Plaintiff is correct that the California Supreme Court, in Blank v. Kirwan (1985) 39 Cal.3d 311, stated, “[w]e treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” (Id. at p.318.) However, immediately after that, the court stated, “[w]e also consider matters which may be judicially noticed.” (Id.) Here, the Court has taken judicial notice of certain facts and admissions by Plaintiff. Plaintiff’s argument is without merit and the demurrer to the entire complaint is SUSTAINED. While Plaintiff fails to show how she might be able to amend her complaint such that it can state a viable cause of action (see Goodman v. Kennedy (1976)18 Cal.3d 335, 349 (stating that “Plaintiff must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading”), quoting Cooper v. Leslie Salt Co. (1969) 70 Cal.2d 627, 636; see also Hendy v. Losse (1991) 54 Cal.3d 723, 742 (stating that “the burden is on the plaintiff… to demonstrate the manner in which the complaint might be amended”), the Court nevertheless will allow leave to amend out of an abundance of caution. Accordingly, the demurrer to the complaint in its entirety is SUSTAINED with 20 days leave to amend to the extent that it is consistent with the remainder of this order.

First cause of action for wrongful foreclosure

“The elements of a wrongful foreclosure cause of action are: ‘ (1) [T]he trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in a mortgage or deed of trust; (2) the party attacking the sale (usually but not always the trustor or mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or mortgagor challenges the sale, the trustor or mortgagor tendered the amount of the secured indebtedness or was excused from tendering.’” (Turner v. Seterus, Inc. (2018) 27 Cal.App.5th 516, 525.) Here, as Defendant states, there has been no sale of the subject property. In opposition, Plaintiff does not address this argument. As Plaintiff essentially concedes this issue, the demurrer to the first cause of action is SUSTAINED without prejudice to a noticed motion for leave to amend in the event that the subject property is sold.

Second cause of action for violation of Civil Code section 2924

The second cause of action for violation of Civil Code section 2924 requests a declaration that Defendant is not a trustee, is not authorized to do business in the State of California, has withdrawn their agent for service of process, has fraudulently executed and recorded false documents and an order finding the assignment of the deed of trust recorded on October 23, 2014 (see complaint, exh. 1), the LinkedIn information for James Kucherka (see complaint, exh. 2) and signature examples for James Kucherka (see complaint, exh. 3) are void ab initio, fraudulent and stricken. (See complaint, ¶¶ 75-77 (alleging that Defendant “Plaintiff respectfully requests that the court declare that… [Defendant] fraudulently executed and recorded false documents, including Exhibits 1-3…and [a]n Order finding that Exhibits 1-3 void ab initio; fraudulent; and stricken”).)

Here, the Court is unaware of any authority to make any declaration as to LinkedIn information. Moreover, the Court does not strike or declare random signature examples as void ab initio or fraudulent. As to the assignment of the deed of trust, the complaint alleges that the assignment to Defendant is invalid because National City Bank was defunct on October 23, 2014 when the assignment was recorded, the signor, James Kucherka, was not authorized to sign the assignment and that he was a robo-signor.

However, Plaintiff lacks standing to challenge the validity of the assignment. (See Mendoza v. JPMorgan Chase Bank, N.A. (2016) 6 Cal.App.5th 802, 819-820 (affirming sustaining of demurrer, stating that “Plaintiff also insists that a robo-signed assignment is a void assignment, and a void assignment unravels the entire nonjudicial foreclosure… [a]lthough the robo-signing allegation has been launched in many cases, plaintiff fails to cite any authority in which a court set aside a trustee's sale based on a robo-signed document… [t]o the contrary… “to the extent that an assignment was in fact robo-signed, it would be voidable, not void, at the injured party’s option… [t]he bank, not the borrower would be the injured party… the prevailing view [is] that plaintiff homeowners lack standing to challenge the validity of robo-signatures… [w]e uphold the trial court’s ruling because plaintiff lacks standing to challenge the assignment of her loan and deed of trust”); see also Saterbak v. JPMorgan Chase Bank, N.A. (2016) 245 Cal.App.4th 808, 814-815 (stating that “Saterbak lacks standing to pursue [] theories… [that] the assignment was void under the PSA because MERS did not assign the DOT to the 2007–AR7 trust until years after the closing date… [and that] the signature of “Nicole M. Wicks” on the assignment document was forged or robo-signed… [t]he crux of Saterbak’s argument is that she may bring a preemptive action to determine whether the 2007–AR7 trust may initiate a nonjudicial foreclosure… [s]he argues, ‘If the alleged ‘Lender’ is not the true ‘Lender,’’ it ‘has no right to order a foreclosure sale...’ [h]owever, California courts do not allow such preemptive suits”).) Moreover, as previously stated, the purportedly illegal and fraudulent assignment occurred years prior to Plaintiff’s filing of her bankruptcy petition in which she stated that Defendant was a secured creditor and did not disclose any claims related to the purported illegality or fraud of that assignment.

In opposition, Plaintiff argues without citation to any authority that she “has standing to challenge this assignment because as a result of that assignment her BURDEN HAS CHANGED.” (Opposition, p.29:5-6.) Here, this argument does not address the case authority that it is “the bank, not the borrower [who] would be the injured party” from any defect in the assignment.

The demurrer to the second cause of action is SUSTAINED without leave to amend.

Third cause of action for permanent injunctive relief

Defendant demurs to the third cause of action for permanent injunctive relief on the ground that injunctive relief is a remedy and not a cause of action. Indeed, “[i]njunctive relief is a remedy, not a cause of action.” (Ivanoff v. Bank of America, N.A. (2017) 9 Cal.App.5th 719, 734; see also Roberts v. Los Angeles County Bar Assn. (2003) 105 Cal.App.4th 604, 618 (stating that “her cause of action for an injunction was improper as an injunction is a remedy, not a cause of action”).) In opposition, Plaintiff argues that “[t]he mortgage is void due to Covid-19… [t]he mortgage is illegal due to a forgery… [and t]he mortgage cannot be enforced by an entity which is BANNED from doing business in the state by the Franchise Tax Board.” (Opposition, p.31:26-28.) However, judicially noticeable facts indicate that Defendant is in good standing with the State and “is qualified to transact intrastate business in California.” Moreover, as with the prior causes of action, Plaintiff does not address the actual argument. The demurrer to the third cause of action is SUSTAINED with 20 days leave to amend.

Fourth cause of action for cancellation of instrument

Defendant asserts that the fourth cause of action for cancellation of instruments fails to demonstrate that the instruments should be cancelled pursuant to Civil Code section 3412. In Saterbak, supra, the court stated that the plaintiff failed to state facts sufficient to constitute a cause of action under section 3412 because she could not allege that the assignment of the deed of trust was void or voidable against her. (Saterbak, supra, 245 Cal.App.4th at pp.818-819.) As previously discussed, the plaintiff lacked standing to challenge the validity of the assignment. (Id. at pp. 814-815.) Moreover, the Saterbak court stated that the plaintiff “also fails to allege ‘serious injury’… because the alleged defects did not change the borrowers’ payment obligations, and the borrowers did not deny they had defaulted… [and] even if the assignment were invalid, it could not ‘cause serious injury’ under the statute because her obligations on the Note remained unchanged. (Id. at p.819.) As with Saterbak, here, Plaintiff similarly lacks standing to challenge the validity of the assignment and the alleged defects of the assignment of the deed of trust does not change Plaintiff’s payment obligations, and Plaintiff does not allege that she did not default.

In opposition, Plaintiff argues, without citation to any legal authority, that: Defendant is banned from doing business in California; Defendant is relying on a fraudulently executed assignment; force majeure makes the mortgage void and unenforceable; Defendant robo-signed the document rendering the assignment a forgery; the collection of the mortgage is a felony; and, Defendant is working with the trustee to murder Plaintiff by selling her home during Covid-19, the most epic pandemic in history. (See Opposition, pp.33:15-28, 34:1-8.) As previously stated, judicially noticeable facts indicate that Defendant is in good standing with the State and “is qualified to transact intrastate business in California.” Further, Plaintiff fails to rebut Defendant’s arguments that she lacks standing to challenge the validity of the assignment, or that the purportedly illegal and fraudulent assignment occurred years prior to Plaintiff’s filing of her bankruptcy petition in which she stated that Defendant was a secured creditor and did not disclose any claims related to the purported illegality or fraud of that assignment. For this reason, Plaintiff fails to demonstrate that she can state facts sufficient to constitute a cause of action for cancellation of instrument. The demurrer to the fourth cause of action is SUSTAINED without leave to amend.

Defendant also asserts that the fourth cause of action is barred by the statute of limitations, Code of Civil Procedure sections 338 or 343. Here, the assignment occurred in 2007 and was recorded in 2014. Code of Civil Procedure section 343 is a four year statute of limitations; alternatively, parties could be subject to section 338, which provides for three years to bring a cause of action. Civil Code section 2934 states that “[a]ny assignment of a mortgage and any assignment of the beneficial interest under a deed of trust may be recorded, and from the time the same is filed for record operates as constructive notice of the contents thereof to all persons….” (Civ. Code § 2934.) As the complaint was filed more than four years after the 2014 recordation when Plaintiff had constructive notice, the fourth cause of action fails to allege facts supporting the timeliness of the cause of action, and for this reason also, the fourth cause of action fails to state facts sufficient to constitute a cause of action.

In opposition, Plaintiff asserts that “Plaintiffs complaint is relying on events in 2020.” (Opposition, p.31:1-11.) Although the opposition fails to elaborate, Plaintiff apparently relies on the allegations that “the harm did not occur until such time as the Defendant Trinity Financial Services LLC has instituted a fraudulent foreclosure action based on the forged assignment, and thus the statute of limitations has not begun to run until March of 2020 when they attempted to institute foreclosure proceedings during Covid 19.” (Complaint, ¶ 38.) However, the complaint does not plead facts as to why Plaintiff was unable to discover facts essential to her cause of action despite reasonable diligence until March 2020, and judicially noticeable facts indicate that Plaintiff did in fact discover that Defendant was a secured creditor years prior to March 2020. The fraudulent assignment affected Plaintiff in 2007, and certainly prior to her decision to petition for Chapter 13 bankruptcy. The demurrer to the fourth cause of action is SUSTAINED on this basis also.

Fifth cause of action for breach of contract

A complaint for breach of contract must include: (1) the existence of a contract; (2) plaintiff’s performance or excuse for nonperformance; (3) defendant’s breach; and (4) damages to plaintiff therefrom.  (Acoustics, Inc. v. Trepte Construction Co. (1971) 14 Cal.App.3d 887, 913.) The fifth cause of action alleges that a mortgage is a contract pursuant to Civil Code section 2920, subdivision (a), which states that “[a] mortgage is a contract by which specific property, including an estate for years in real property, is hypothecated for the performance of an act, without the necessity of a change of possession.” (Civ. Code § 2920, subd. (a).) The fifth cause of action then alleges that “the mortgage which was fraudulently assigned and which is used to secure the property is breached by the Defendants….” (Complaint, ¶ 99.) However, it is entirely unclear how the mortgage was breached. Absent a provision regarding assignability, an assignment is generally a valid conveyance. (See People v. Klopstock (1944) 24 Cal.2d 897, 901 (stating that “the assignment remains a valid and binding conveyance”); see also Weisman v. Clark (1965) 232 Cal.App.2d 764, 767 (stating same); see also Civ. Code § 2934 (stating that “[a]ny assignment of a mortgage and any assignment of the beneficial interest under a deed of trust may be recorded, and from the time the same is filed for record operates as constructive notice of the contents thereof to all persons”).) The fifth cause of action alleges that “Plaintiff is entitled to the declaration that the mortgage is void due to the Covid world pandemic and Force Majeure” (complaint, ¶ 102) “the mortgage is void due to illegality” (complaint, ¶¶ 103, 105), and “the mortgage is void due commercial impracticability to enforce it” (complaint, ¶ 104); however, the alleged voiding of a contract does not establish a breach.

Defendant also contends that this cause of action is time-barred. However, it is entirely unclear as to what the purported breach is here, and thus impossible to determine when the cause of action accrued.

The demurrer to the fifth cause of action is SUSTAINED with 20 days leave to amend.

Sixth cause of action for violation of Business & Professions Code section 17200

Defendant demurs to the sixth cause of action, asserting that: Plaintiff lacks standing to assert a section 17200 cause of action; Plaintiff fails to allege any unfair, unlawful or fraudulent conduct in violation of the UCL; and, the cause of action is untimely. Here, Defendant is correct that Plaintiff has not alleged any loss of money or property or a causal connection between the economic injury and the alleged unfair conduct. Plaintiff does not dispute that she defaulted on the loan; instead, it is alleged that “Plaintiff cannot earn money necessary to redeem the mortgage… [because] the Government failed to come through with the promised relief, EIDL loans or PPP loans… Plaintiff is barred from leaving her home… [and] her income is dependent on her ability to leave her home.” (See complaint, ¶¶ 17-20.) “[A] private person has standing to sue under the UCL only if that person has suffered injury and lost money or property ‘as a result of such unfair competition.’” (Daro v. Super. Ct. (Foy) (2007) 151 Cal.App.4th 1079, 1098.) However, “[w]hen a UCL action is based on an unlawful business practice, as here, a party may not premise its standing to sue upon injury caused by a defendant’s lawful activity simply because the lawful activity has some connection to an unlawful practice that does not otherwise affect the party.” (Id. at p.1099.) “In short, there must be a causal connection between the harm suffered and the unlawful business activity.” (Id.) “That causal connection is broken when a complaining party would suffer the same harm whether or not a defendant complied with the law.” (Id.) In Graham v. Bank of America, N.A. (2014) 226 Cal.App.4th 594, the plaintiff did “not allege facts demonstrating he ha[d] standing to sue under the UCL because he d[id] not allege sufficient facts showing a causal link between the alleged UCL violations and an injury in fact resulting in loss of money or property… [because] his prospect of losing the home to foreclosure [wa]s the result of default, not the alleged conduct of defendants” (Id. at p. 614.)

Additionally, Defendant is also correct that the sixth cause of action fails to allege that members of the public are likely to be deceived and thus does not constitute a fraudulent practice as defined by the UCL. (See Daugherty v. American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 838 (stating that the term ‘fraudulent,’ as used in the UCL, has required only a showing that members of the public are likely to be deceived… [w]e cannot agree that a failure to disclose a fact one has no affirmative duty to disclose is ‘likely to deceive’ anyone within the meaning of the UCL… ‘in order to be deceived, members of the public must have had an expectation or an assumption about’ the matter in question”).) As to whether the cause of action is time-barred, the complaint identifies the fraudulent conduct as the 2014 recordation of the assignment. The complaint does not plead facts as to why Plaintiff was unable to discover facts essential to her cause of action despite reasonable diligence until March 2020, and judicially noticeable facts indicate that Plaintiff did in fact discover that Defendant was a secured creditor years prior to March 2020. The demurrer to the sixth cause of action is SUSTAINED with 20 days leave to amend.

Seventh cause of action for quiet title

Defendant demurs to the seventh cause of action asserting that it fails for lack to allege tender. Indeed, “a mortgagor of real property cannot, without paying his debt, quiet his title against the mortgagee.” (Miller v. Provost (1994) 26 Cal.App.4th 1703, 1707; see also Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 86 (stating that “[a] borrower may not, however, quiet title against a secured lender without first paying the outstanding debt on which the mortgage or deed of trust is based”); see also Shimpones v. Stickney (1934) 219 Cal. 637, 649 (stating that “a mortgagor cannot quiet his title against the mortgagee without paying the debt secured”); see also Stebley v. Litton Loan Servicing, LLP (2011) 202 Cal.App.4th 522, 526 (stating that “[a] full tender must be made to set aside a foreclosure sale, based on equitable principles”); see also Karlsen v. American Sav. & Loan Assn. (1971) 15 Cal.App.3d 112, 117 (stating that “[a] valid and viable tender of payment of the indebtedness owing is essential to an action to cancel a voidable sale under a deed of trust”).)

In opposition, Plaintiff argues that: tender is excused where the substitution of a trustee is fraudulent; Defendant is banned from doing business in this state; and, the mortgage is void due to the illegal assignment and force majeure. Here, force majeure would not quiet title in Plaintiff’s favor. Judicially noticeable facts indicate that Defendant is in good standing with the State and “is qualified to transact intrastate business in California.” As to the illegality or fraud of the assignment of the deed of trust, Plaintiff fails to rebut Defendant’s arguments that she lacks standing to challenge the validity of the assignment, or that the purportedly illegal and fraudulent assignment occurred years prior to Plaintiff’s filing of her bankruptcy petition in which she stated that Defendant was a secured creditor and did not disclose any claims related to the purported illegality or fraud of that assignment. The demurrer to the seventh cause of action is SUSTAINED with 20 days leave to amend.

Eighth cause of action for violation of the California Rosenthal Fair Debt Collection Practices Act

Defendant argues that the eighth cause of action fails to state facts sufficient to constitute a cause of action for violation of the California Rosenthal Fair Debt Collection Practices Act because a nonjudicial foreclosure is not considered a debt collection under the act and thus does not invoke the statutory protections of the act, and fails to allege any factual basis for the cause of action. Indeed, “a person engaging only in activities leading towards a foreclosure sale as required by California law is not a ‘debt collector’ under the FDCPA.” (Fonteno v. Wells Fargo Bank, N.A. (2014) 228 Cal.App.4th 1358, 1375, citing Pfeifer v. Countrywide Home Loans, Inc. (2012) 211 Cal.App.4th 1250, 1261-1264.) In opposition, Plaintiff does not present any argument. The demurrer to the eighth cause of action is SUSTAINED with 20 days leave to amend.

Ninth cause of action for conspiracy

The ninth cause of action is for conspiracy. “Civil conspiracy is not an independent tort.” (City of Industry v. City of Fillmore (2011) 198 Cal.App.4th 191, 211.) As the complaint fails to state facts sufficient to constitute a cause of action, the demurrer to the ninth cause of action is SUSTAINED with 20 days leave to amend.

Tenth cause of action for fraud

Defendant asserts that the tenth cause of action for fraud fails to allege facts supporting the fraud with sufficient particularity, and is time-barred. The tenth cause of action alleges that Defendant devised a scheme with James Kucherka to defraud the Plaintiff out of money, and her home, and Defendant concealed the true facts from Plaintiff and the public that James Kucherka was not the vice president of National City Bank and that he had no actual authority to execute documents on its behalf as vice president of National City Bank.

“[F]raud actions are subject to strict requirements of particularity in pleading.” (Furia v. Helm (2003) 111 Cal.App.4th 945, 956; see also Nagy v. Nagy (1989) 210 Cal.App.3d 1262, 1268 (stating same); see also Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184 (stating that “[i]n California, fraud must be pled specifically; general and conclusory allegations do not suffice”).) The specificity requirement has two purposes: to apprise the defendant of certain definite accusations against him so that he can intelligently respond to them, and also to weed out nonmeritorious actions on the basis of the pleadings. (See Tenet Healthsystem Desert, Inc. v. Blue Cross of California (2016) 245 Cal.App.4th 821, 838.) Minimally, a fraud cause of action must “allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” (Lazar v. Super. Ct. (Rykoff-Sexton, Inc.) (1996) 12 Cal. 4th 631, 645; see also Tenet Healthsystem Desert, supra, 245 Cal.App.4th at p.838 (stating same).) Here, there are no allegations of any affirmative misrepresentation with the requisite particularity. Moreover, it is unclear as to what Plaintiff asserts are the resulting damages. Plaintiff does not dispute that she defaulted on the loan; instead, it is alleged that “Plaintiff cannot earn money necessary to redeem the mortgage… [because] the Government failed to come through with the promised relief, EIDL loans or PPP loans… Plaintiff is barred from leaving her home… [and] her income is dependent on her ability to leave her home.” These damages seem separate from any purportedly invalid assignment to which Plaintiff lacks standing to challenge the validity and are the cause of either the Government or the coronavirus pandemic, not Defendant. As it is unclear as to what exactly Plaintiff contends is the purported fraud, it is thus impossible to determine when the cause of action accrued. Accordingly, the demurrer to the tenth cause of action is SUSTAINED with 20 days leave to amend.

The Court will prepare the Order.

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Case Name: Mejia v. Pupuseria Los Dubon, Inc.

Case No.: 19CV349592

According to the allegations of the first amended complaint (“FAC”), at 9:00 a.m. on August 23, 2018, plaintiff Raquel Abigail Monge Mejia (“Plaintiff”) purchased a hot chocolate from defendant Pupuseria Los Dubon, Inc. (“Defendant”). (See FAC, ¶ 8.) After she purchased it, it spilled on her body, causing burns and scarring to her inner and upper thighs, perineum, groin and genital areas. (See FAC, ¶¶ 10-12.) On August 7, 2019, Plaintiff filed the FAC against Defendant, asserting causes of action for negligence and strict liability.

Defendant moves for summary judgment.

DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

Defendant’s burden on summary judgment

“A defendant seeking summary judgment must show that at least one element of the plaintiff’s cause of action cannot be established, or that there is a complete defense to the cause of action.  …  The burden then shifts to the plaintiff to show there is a triable issue of material fact on that issue.”  (Alex R. Thomas & Co. v. Mutual Service Casualty Ins. Co. (2002) 98 Cal.App.4th 66, 72; internal citations omitted; emphasis added.)

“The ‘tried and true’ way for defendants to meet their burden of proof on summary judgment motions is to present affirmative evidence (declarations, etc.) negating, as a matter of law, an essential element of plaintiff’s claim.”  (Weil et al., Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2007) ¶ 10:241, p.10-91, citing Guz v. Bechtel National Inc. (2000) 24 Cal.4th 317, 334; emphasis original.)  “The moving party’s declarations and evidence will be strictly construed in determining whether they negate (disprove) an essential element of plaintiff’s claim ‘in order to avoid unjustly depriving the plaintiff of a trial.’”  (Id. at § 10:241.20, p.10-91, citing Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107.)

“Another way for a defendant to obtain summary judgment is to ‘show’ that an essential element of plaintiff’s claim cannot be established.  Defendant does so by presenting evidence that plaintiff ‘does not possess and cannot reasonably obtain, needed evidence’ (because plaintiff must be allowed a reasonable opportunity to oppose the motion.)  Such evidence usually consists of admissions by plaintiff following extensive discovery to the effect that he or she has discovered nothing to support an essential element of the cause of action.”  (Id. at ¶ 10:242, p.10-92, citing Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854-855.)

Defendant fails to meet its initial burden

Defendant moves for summary judgment on the ground that it did not breach any duty owed to Plaintiff. In support of its motion, Defendant presents Plaintiff’s responses to special interrogatories (“SIs”), its responses to SIs, and Plaintiff’s deposition testimony. Defendant’s material facts of its separate statement are: Plaintiff contends that the beverage was not served in a properly sealed cup (see Pl.’s separate statement of undisputed material facts, undisputed material fact no. (“UMF”) 2); Plaintiff ordered hot chocolate with milk (UMF 3); the beverage was served in a white cup with a lid, similar to those used at 7-11 stores (UMF 4); Plaintiff took the hot beverage and, accompanied by Pablo Lopez, walked out of the restaurant, to the parking lot (UMF 5); Plaintiff carried the beverage in her hand from the restaurant to the car, observed that it was “a little bit hot” but she was able to hold it (UMF 6); she seated herself in the passenger seat of the car and placed the hot beverage between her legs (UMF 7); the car was equipped with cup holders (UMF 8); Plaintiff made no effort to use the cup holder (UMF 9); the lid was still in place when she arrived at the car and at no time did she observe anything amiss with the lid (UMF 10); having seated herself in the vehicle, she then felt something hot on her legs (UMF 11); Plaintiff does not know if the lid came off (UMF 12); Plaintiff does not know what caused the beverage to spill (UMF 13); Plaintiff did not observe anything that led her to conclude that the beverage container was dangerous (UMF 14); and, Defendant has no information concerning the circumstances of Plaintiff’s alleged injury and first learned of the incident when served with the summons and complaint (UMF 15).

Defendant argues that the FAC is without merit as to it because there was no breach of any duty owed. (See Def.’s memorandum of points and authorities in support of motion for summary judgment (“Def,’s memo”), pp.4:12-20, 5:1-21, 6:1-2-18.) Here, while Plaintiff’s deposition testimony may better demonstrate that Plaintiff lacks evidence to demonstrate causation of injury, it also establishes that she lacks evidence to support a breach of a duty. Breach of a duty is an element for a negligence cause of action. (See Butcher v. Gay (1994) 29 Cal.App.4th 388, 398-399 (stating that “[i]n order for a plaintiff to succeed in a negligence action brought against a defendant, the plaintiff must demonstrate (1) the existence of a duty of due care owed by the defendant to the plaintiff, (2) defendant's breach of that duty, and (3) injury or damage to the plaintiff that is (4) legally caused by the defendant’s breach”).)

However, negligence is not the only cause of action of the FAC; there is also a cause of action for strict liability. The elements of a strict products liability cause of action are a defect in the manufacture or design of the product or a failure to warn, causation, and injury. (Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 560; see also Shih v. Starbucks Corporation (2020) 53 Cal.App.5th 1063, 1067 (discussing elements for strict liability cause of action in action for personal injuries resulting from spilled hot coffee).) While it may be that Plaintiff lacks evidence to support causation, this was not the basis for Defendant’s motion, and there is no argument regarding any element of a strict liability cause of action. Accordingly, Defendant fails to meet its initial burden to demonstrate that the FAC lacks merit as to all causes of action and its motion is DENIED.

The Court will prepare the Order.

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Case Name: Ubiquiti Networks, Inc. v. National Union Fire Ins. Co. of Pittsburgh, PA

Case No.: 18CV322879

This is an insurance coverage action. In May 2015, plaintiff Ubiquiti Networks, Inc.’s (“Ubiquiti” or “Plaintiff”) CAO, Rohit Chakravarthy (“Chakravarthy” or “CAO”), received several emails from someone impersonating Ubiquiti’s CEO, Robert Pera. Chakravarthy additionally received emails from someone impersonating attorney Tom Evans, and directed Chakravarthy to make 14 wire transfers over a 17 day period totaling $46,683,232. Chakravarthy departed Ubiquiti soon after the loss, and Ubiquiti sought coverage for the alleged loss, pursuant to the Computer Fraud and Funds Transfer Fraud coverages of the Commercial Crime Policy issued by defendant National Union Fire Insurance Company of Pittsburgh, PA (“NUF” or “Defendant”). NUF denied coverage purportedly because the alleged loss did not fall within either insuring agreement. Ubiquiti then filed a complaint against Defendant, asserting causes of action for breach of insurance contract and breach of the implied covenant of good faith and fair dealing.

Ubiquiti seeks a protective order precluding Defendant from taking the depositions of three of its executives: Ubiquiti CEO and Chairman of the Board Robert J. Pera (“Pera”), Executive Vice President of Operations and Legal Affairs Hartley Nisenbaum (“Nisenbaum”) and former Chief Financial Officer and former member of the Board Craig Foster (“Foster”). Citing Liberty Mutual Ins. Co. v. Super. Ct. (Frysinger) (1992) 10 Cal.App.4th 1282, the court stated:

…when a plaintiff seeks to depose a corporate president or other official at the highest level of corporate management, and that official moves for a protective order to prohibit the deposition, the trial court should first determine whether the plaintiff has shown good cause that the official has unique or superior personal knowledge of discoverable information. If not, as will presumably often be the case in the instance of a large national or international corporation, the trial court should issue the protective order and first require the plaintiff to obtain the necessary discovery through less intrusive methods. These would include interrogatories directed to the high-level official to explore the state of his or her knowledge or involvement in plaintiff's case; the deposition of lower level employees with appropriate knowledge and involvement in the subject matter of the litigation; and the organizational deposition of the corporation itself, which will require the corporation to produce for deposition the most qualified officer or employee to testify on its behalf as to the specified matters to be raised at the deposition. (§ 2025, subd. (d)(6).) Should these avenues be exhausted, and the plaintiff make a colorable showing of good cause that the high-level official possesses necessary information to the case, the trial court may then lift the protective order and allow the deposition to proceed.

(Id. at p.1289.)

However, where the deponent “has direct personal factual information pertaining to material issues in the action and the deposing party shows the information to be gained from the deposition is not available through any other source.” (See Westly v. Super. Ct. (Cates) (2004) 125 Cal.App.4th 907, 911; see also Contractors’ State License Bd. v. Super. Ct. (Black Diamond Electric, Inc.) (2018) 23 Cal.App.5th 125, 132.)

Here, Defendant has: deposed John Gemetti—who was involved with the wire transfers, propounded interrogatories on Plaintiff, obtained a witness statement of Nisenbaum, obtained a notarized Fidelity Bond Claim Department Proof of Loss form from Nisenbaum, obtained a police report that indicated that Pera was informed of the transfer by the FBI and then started the internal investigation, obtained the police report that states that the incident arose when Chakravarthy was sent an email purportedly from Pera and Pera was apparently impersonated, obtained an email indicating that Chakravarthy was in Pera’s office and talking with Pera while transferring funds, obtained emails discussing the approval process for expenditures, deposed Chakravarthy, obtained Ubiquiti’s Form 8-K for August 4, 2015 announcing the incident and Chakravarthy’s resignation signed by Pera, the Q4 2015 earnings call transcript of Pera in which he discloses information regarding the investigation including that it was concluded, obtained emails from Nisenbaum to the FBI discussing details of the incident, obtained the crime insurance application filled out by Foster, obtained the crime insurance renewal filled out by Foster, and served multiple deposition notices on Pera, Nisenbaum and Foster.

Defendant establishes that: Pera was apparently impersonated in the incident; Pera communicated directly with Chakravarthy as he was transferring funds; Pera launched the investigation of the loss after he was informed by the FBI of the loss; Nisenbaum was assigned to lead the investigation; Nisenbaum reported findings of this investigation to the FBI; through the investigation, Pera and Nisenbaum discovered that Ubiquiti and UBNT had fallen victim of the fraudulent scheme and Nisenbaum instructed HSBC to freeze the account and attempt to stop or recall any of the fraudulent transfers, including through the use of obtaining injunctions and commencing legal proceedings for the recovery of losses suffered; Nisenbaum and Pera obtained a disclosure from HSBC in which they learned that the funds once obtained were immediately directed to other recipients; the HK police report was filed on Nisenbaum’s instructions; Nisenbaum submitted the Fidelity Bond Claim Department Proof of Loss; Pera made the aforementioned statements during the earnings call, Pera was the signatory on the 8-K filing that made the aforementioned statements; Pera terminated Gemetti because he believed him responsible for the loss; Ubiquiti did not have a CFO at the time of the incident but Nisenbaum acted as interim CFO although he lacked the background; the CFO or CEO would have to review or sign off on wire transfer to ensure a valid transaction; Pera or the Pera impersonator approved the wire transfers; Nisenbaum was involved with drafting the 8-K; Foster filled out the crime insurance application and the crime insurance renewal application; and, there was no training about security at Ubiquiti.

Here, the Court finds that Pera, Nisenbaum and Foster each have direct personal factual information pertaining to material issues in the action and Defendant shows the information to be gained from their deposition is not available through any other source. However, the Court will limit the time and subject for each deposition.

Plaintiff’s motion for protective order is GRANTED in part and DENIED in part. The deposition for Pera shall be limited to 3 hours and shall be confined to questions regarding his statement during the earnings call, the circumstances surrounding his insertion into the finance team and what he is allegedly doing to prevent a future incident, the statements made in the 8-K of which he was the signatory, his basis or knowledge of the circumstances for the termination of Gemetti, his conversations with Chakravarthy during and after the wire transfers, his role in the internal investigation, his conversations with the FBI, the typicality of a request to Chakravarthy for a wire transfer and security protocols thereto, and his relationship with Chakravarthy. The deposition for Nisenbaum shall be limited to 3 hours and shall be confined to questions regarding the issues in his witness statement made in connection with the Hong Kong recovery action, the internal investigation, his acts as acting interim CFO after Foster left, his qualifications to be acting interim CFO, Ubiquiti’s ability to implement internal controls as represented on its applications for coverage, Ubiquiti’s insurance submission to Defendant and facts within the proof of loss for which he was a signatory. The deposition for Foster shall be limited to 1 hour and shall be confined to questions regarding the crime insurance application, including how the information in the application was obtained and what he personally did to verify the application before he signed it.

The Court will prepare the Order.

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Case Name: Vaughn v. Covia Communities

Case No: 20CV362376

The Court commends counsel for plaintiff and defendants for narrowing the issues on plaintiff’s motion to compel to a single document request. At issue here is Request for Production No. 8 which seeks “All DOCUMENTS, including COMMUNICATIONS, in COVIA COMMUNITIES” possession, custody or CONTROL of its agents, employees or attorneys referring or RELATING TO, in any way, any and all sexual assault allegations against any and all employees or agents of COVIA COMMUNITIES.”

Defendant COVIA COMMUNITIES dba Webster House objected to this request as vague, ambiguous and unintelligible as well as overbroad. This defendant also objected that the request sought irrelevant information and invaded the state and federal privacy rights of third parties unrelated to this litigation. Defendant further objected that the request sought documents protected by the attorney-client and work product privileges as well as the quality assurance privileges, including privileges conferred by 42 C.F.R. Sections 483.75 (h) and California Evidence Code Sections 1151, 1156.1 and 1157. Defendant agreed to produce confidential investigation documents pertaining to the unsubstantiated 2015 abuse allegations against defendant Frago-Rodriquez pursuant to a signed confidentiality stipulation.

The Court conducted an informal discovery conference with counsel on November 16, 2020 regarding the remaining document request in dispute. Plaintiff’s counsel was willing to narrow the time frame of the request to 2006 to date and limit the request to Webster House only. Plaintiff’s counsel also agreed to redact the names or identifying features of any alleged victims of sexual assault. This information would also be protected by a stipulated confidentiality order. Defense counsel has apparently rejected these concessions and wishes the Court to rule on this dispute.

First, as mentioned in the Court’s August 22, 2020 order regarding the motions to quash plaintiff’s deposition subpoenas for production of business records, “Prior similar incidents, knowledge, policy and corporate action or inaction are unquestionably relevant, not just to ratification and a prima facie claim for elder abuse, but to Vaughn’s theories of negligence as well (see Phillips v. TLC Plumbing, Inc. (2009) 172 CA4th 1133, 1139.)” Order p. 4.

The heart of this case centers around plaintiff’s rape at Webster House on June 9, 2019 by a certified nursing assistant, defendant Frago Rodriquez. Mr. Rodriquez was also accused of an earlier sexual assault at the same facility on June 5, 2015. He began his employment at the facility in 2006. While the Court agrees that the original Request No. 8 was a bit broad, plaintiff’s counsel has agreed to narrow it considerably and the documents requested are extremely relevant to plaintiff’s case.

Second, as set forth in the Court’s August 22, 2020 order, the Court is not persuaded of the existence or viability of the “quality assurance privilege.” 42 C.F.R. Section 483.75. The Court is equally unpersuaded that the subsequent remedial measures objection under Evidence Code Section 1151 applies. And, even if it did, defendants are free to file a motion in limine at trial to attempt to exclude this evidence under that theory. But, responsive documents must be produced at the discovery stage. Defendants also assert objections based on Evidence Code Sections 1156.1 and 1157. These objections are overruled as the Court does not find these objections applicable or meritorious. Even if they did apply, as set forth in the Court’s August 22, 2020 order, measures can be implemented to safeguard confidentiality and privacy concerns.

To be sure, plaintiff’s counsel has agreed to redact the names of any other sexual assault victims and any other identifying information. He has also agreed to keep the information protected under a stipulated confidentiality order. Given the importance of the information sought to plaintiff’s case and the measures that were employed to narrow the time frame and scope of the request and address any privilege and privacy concerns, the Court grants plaintiff’s request to compel defendant’s compliance with Request No. 8.

In conclusion, the time frame of the request is narrowed to 2006 to the present date and shall apply to Webster House only, not all Covia Communities. The names and identifying information of any victims of alleged sexual assault shall be redacted. And, this information shall be kept confidential under a stipulated protective order. Should any documents be withheld on the grounds of attorney-client or work-product privileges, a privilege log must be provided. Defendants must produce responsive documents within 20 days of the date of this order. Monetary sanctions are denied. The Court will prepare the order.

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