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1 SPERTUS, LANDES & UMHOFER, LLP
Matthew Donald Umhofer (SBN 206607)
2 Diane H. Bang (SBN 271939)
1990 South Bundy Dr., Suite 705
3 Los Angeles, California 90025
Telephone: (310) 826-4700
4 Facsimile: (310) 826-4711
matthew@spertuslaw.com
5 diane@spertuslaw.com
6 Attorneys for Mark Schaub and TLG Ltd.
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
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FOR THE COUNTY OF SANTA BARBARA
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10 MARK SCHAUB, an individual;
TELEPHONE 310-826-4700; FACSIMILE 310-826-4711
Case No.: 20CV02113
Spertus, Landes & Umhofer, LLP
TLG LTD., a Hong Kong limited
11 liability company,
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Hon. Donna D. Geck
LOS ANGELES, CA 90025
12 Plaintiffs,
13 PLAINTIFF MARK SCHAUB’S
v. MEMORANDUM OF POINTS &
14 AUTHORITIES IN SUPPORT OF
ANDREW WYLES WATERS, an MOTION TO COMPEL FURTHER
individual; FCP CORPORATE (HK) RESPONSES BY DEFENDANT
15 LTD., a Hong Kong limited liability ANDREW WATERS AND REQUEST
company; FCP PRIVATE, LLC, a FOR SANCTIONS; DECLARATION
16 California limited liability OF DIANE H. BANG AND EXHIBITS
corporation; and DOES 1 through 10
17 inclusive,
[Notice of Motion to Compel Further
18 Defendants. Responses to Interrogatories; Notice of
Motion to Compel Further Responses to
19 Requests for Production; Notice of
Motion to Compel Further Responses to
20 Requests for Admissions; Separate
Statement; and Request for Judicial
21 Notice filed concurrently]
22 Hearing Date: August 12, 2022
Hearing Time: 10:00 a.m.
23 Dept.: 4
24 SAC filed: June 14, 2021
Trial: Not set
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SCHAUB’S MEMORANDUM OF POINTS & AUTHORITIES TO COMPEL
DISCOVERY BY WATERS
1 TABLE OF CONTENTS
2 PAGE
3 MEMORANDUM OF POINTS AND AUTHORITIES........................................ 1
4 I. INTRODUCTION ........................................................................................ 1
5 II. FACTUAL BACKGROUND ...................................................................... 2
6 A. Overview of Plaintiffs’ Allegations ................................................... 2
7 B. Discovery Served on Defendants ....................................................... 3
8 III. ARGUMENT ............................................................................................... 4
9 A. Plaintiff Is Entitled To Expansive Discovery Rights ......................... 4
10 B. Objections Based On A Breakdown Of The Attorney-Client
Relationship ....................................................................................... 5
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C. Defendant Waters’ Responses to Form Interrogatories Are
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12 Evasive and Without Merit ................................................................ 5
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13 1. Form Interrogatories related to background information
(2.2, 2.3, 2.5, 2.6, 2.7, 2.8, and 2.11) ....................................... 6
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2. Form Interrogatories related to insurance (4.1 and 4.2) .......... 6
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3. Form Interrogatories related to property damage and
16 other damages (7.1, 7.2, 9.1, 9.2) ............................................ 6
17 4. Form Interrogatories related to loss of income or earning
capacity (8.1, 8.2, 8.4, 8.6, 8.7, and 8.8) ................................. 7
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5. Form Interrogatories related to other damages (9.1 and
19 9.2) ........................................................................................... 7
20 6. Form Interrogatories related to investigation (12.1 thru
12.6) ......................................................................................... 8
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7. Form Interrogatories related to statutory or regulatory
22 violations (14.1) ....................................................................... 8
23 8. Form Interrogatories related to denials and special or
affirmative defenses (15.1) ...................................................... 8
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9. Form Interrogatories related to responses to request for
25 admissions (17.1) ..................................................................... 9
26 10. Form Interrogatories related to contracts (50.1 thru 50.6) ...... 9
27 D. Defendant Waters’ Responses to Requests for Production Are
Evasive and Without Merit .............................................................. 10
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1 E. Defendant Waters’ Responses to Requests for Admissions Are
Evasive and Without Merit .............................................................. 11
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F. Defendant Waters Should Be Sanctioned ........................................ 12
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IV. CONCLUSION .......................................................................................... 13
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1 TABLE OF AUTHORITIES
2 CASES PAGE(S)
3 Burke v. Superior Ct. of Sacramento Cty.,
(1969) 71 Cal. 2d 276..................................................................................... 6, 8, 9
4
Cembrook v. Superior Ct. In & For City & Cty. of San Francisco,
5 56 Cal. 2d 423 (1961)........................................................................................... 12
6 Collisson & Kaplan v. Hartunian,
21 Cal. App. 4th 1611 (1994) .............................................................................. 12
7
Deyo v. Kilbourne,
8 (1978) 84 Cal. App. 3d 771...................................................................... 7, 8, 9, 10
9 Glenfed Dev. Corp. v. Superior Court,
(1997) 53 Cal. App. 4th 1113 .............................................................................. 10
10
Lopez v. Watchtower Bible & Tract Soc’y of N.Y., Inc.,
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Spertus, Landes & Umhofer, LLP
(2016) 246 Cal. App. 4th 566 ............................................................................ 1, 4
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12 Murillo v. Superior Court,
LOS ANGELES, CA 90025
(2006) 143 Cal. App. 4th 730 ................................................................................ 9
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Orange County Water Dist. v. The Arnold Eng. Co.,
14 (2018) 31 Cal. App. 5th 96 .................................................................................... 9
15 Pioneer Electronics (USA), Inc. v. Superior Court,
(2007) 40 Cal. 4th 360 ......................................................................................... 11
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Seahaus La Jolla Owners Assn. v. Superior Court,
17 (2014) 224 Cal. App. 4th 754 .............................................................................. 10
18 Thomas G. Ferruzzo, Inc. v. Superior Court,
(1980) 104 Cal. App. 3d 501.................................................................................. 4
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Thoren v. Johnston & Washer,
20 (1972) 29 Cal. App. 3d 270.......................................................................... 7, 8, 12
21 STATUTES
22 Cal. Civ. Proc. Code § 2017.010 ............................................................................... 4
23 Cal. Civ. Proc. Code § 2017.210 ............................................................................... 6
24 Cal. Civ. Proc. Code § 2023.010 ............................................................................... 4
25 Cal. Civ. Proc. Code § 2030.300(a)........................................................................... 5
26 Cal. Civ. Proc. Code § 2030.300(d) ........................................................................ 12
27 Cal. Civ. Proc. Code § 2031.210 ....................................................................... 10, 11
28 Cal. Civ. Proc. Code § 2031.220 ............................................................................. 10
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1 Cal. Civ. Proc. Code § 2031.230 ............................................................................. 10
2 Cal. Civ. Proc. Code § 2031.240 ............................................................................. 10
3 Cal. Civ. Proc. Code § 2031.310(a)......................................................................... 10
4 Cal. Civ. Proc. Code § 2031.310(h) ........................................................................ 12
5 Cal. Civ. Proc. Code § 2033.220(a)......................................................................... 11
6 Cal. Civ. Proc. Code § 2033.290(a)......................................................................... 11
7 Cal. Civ. Proc. Code § 2033.290(d) ........................................................................ 12
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1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. INTRODUCTION
3 Plaintiffs Mark Schaub and his company, TLG Ltd., had $2 million stolen
4 from them by Defendants. Plaintiffs were fraudulently induced into sending funds
5 to accounts controlled by Defendant Andrew Waters, and now Defendant Waters
6 refuses to return those funds, making up more lies along the way. Through his
7 companies, Defendants FCP Corporate Ltd. and FCP Private, LLC, Defendant
8 Waters has been operating a Ponzi scheme, luring unsuspecting wealthy investors
9 into sending him hundreds of thousands of dollars, which he then misappropriates
10 for his own personal use. (Request for Judicial Notice (“RJN”) Ex. F (Second Am.
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11 Compl. (“SAC”)) ¶ 1.) Defendant Waters created various shell companies to
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12 mislead potential investors, including Plaintiffs, into believing each company
13 would be profitable. (Ibid.) Plaintiffs are entitled to discovery regarding these
14 companies in order to prove up his claims for conversion, fraud, concealment,
15 breaches of contract, and unjust enrichment.
16 Under California law, parties are afforded expansive discovery rights, with
17 rules liberally applied in favor of discovery. Lopez v. Watchtower Bible & Tract
18 Soc’y of N.Y., Inc. (2016) 246 Cal. App. 4th 566, 590-91. Defendants cannot
19 ignore these rights by serving nothing but unmeritorious, evasive objections, as
20 they have done here. Defendants were given two extensions of time to respond
21 and produce documents, first as a courtesy because of the holidays, and second
22 based on counsel’s representation that “the discovery is voluminous.” (Decl. of
23 Diane H. Bang in Supp. of Mot. to Compel (“Bang Decl.”) ¶¶ 3-4, Ex. A.) Despite
24 the courtesy given, Defendants served only boilerplate objections and no
25 documents, even though counsel agreed in writing that Dixon would respond to
26 Plaintiffs’ contention discovery on December 28, 2022. Defendants should be
27 sanctioned for their conduct for this type of misuse of the discovery process.
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1 II. FACTUAL BACKGROUND
2 A. Overview of Plaintiffs’ Allegations
3 Through his companies, Defendants FCP Corporate Ltd. and FCP Private,
4 LLC, Defendant Waters has essentially been operating a shell factory enterprise by
5 creating various startup companies and misleading potential investors to believe
6 each company would be operating and profitable. Plaintiff Mark Schaub is an
7 individual who, while living in Hong Kong, was befriended and then ultimately
8 defrauded by Defendant Waters. He believed Defendant Waters to be a successful
9 businessman and that he was running real businesses with real potential for growth
10 and profitability. (SAC ¶¶ 17-18.)
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11 In 2019, Mr. Schaub was informed that HSBC was planning to close his
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12 company account, TLG Ltd. Defendant Waters convinced Mr. Schaub that HSBC
13 was closing the account because the bank believed it to contain tainted funds. Mr.
14 Schaub was unfamiliar with Hong Kong banking regulations and believed
15 Defendant Waters’ representations. Defendant Waters induced Mr. Schaub to have
16 approximately $50,000 transferred to the FCP Corporate account controlled by
17 Waters, promising that this was a client account and that the funds would be held
18 in trust. (SAC ¶ 27.)
19 In July 2019, instead of the planned $50,000, approximately $2 million was
20 mistakenly transferred from TLG to FCP Corporate’s account. (SAC ¶ 32.) When
21 Mr. Schaub inquired about the money, rather than returning the funds to Mr.
22 Schaub, Defendant Waters proceeded to drain FCP Corporate’s account of the
23 entire $2 million. (SAC ¶ 41.) Meanwhile, Defendant Waters falsely told Mr.
24 Schaub that the bank had frozen the accounts where Plaintiffs’ funds were
25 transferred to, that the bank believed the funds were from an illegitimate source,
26 and that he would have to go to Hong Kong to resolve the situation with the frozen
27 accounts. For months, Defendant Waters proceeded to string Mr. Schaub along
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1 with these lies. (SAC ¶¶ 42-43.) Mr. Schaub demanded the immediate return of
2 his funds, Defendant Waters refused, and he continues to refuse to this day.
3 B. Discovery Served on Defendants
4 On October 29, 2021, Plaintiff served a set of form interrogatories, requests
5 for production of documents (“RFPs”), and requests for admissions (“RFAs”)
6 relating to the allegations of the SAC on all three defendants. (Bang Decl. ¶ 2.)
7 On November 16, 2021, per Defendants’ request, Plaintiffs agreed to extend the
8 deadline for Defendants’ discovery responses to December 15, 2021, as a courtesy
9 to counsel. (Bang Decl. ¶ 3, Ex. A.) On December 10, 2021, Defendants made a
10 second request to extend the deadline to respond to discovery, stating that “the
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11 discovery is voluminous.” (Ibid. ¶ 4, Ex. A) Believing that Defendants would
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12 respond in good faith and that they were in the process of gathering and reviewing
13 documents for production, Plaintiffs agreed to extend the deadline to December 28,
14 2021, giving Defendants an additional four weeks from their statutory deadline to
15 respond. (Ibid. ¶ 5.)
16 However, on the agreed upon deadline, Defendants served boilerplate,
17 evasive objections and did not produce a single document. (Bang Decl. ¶ 6, Exs.
18 B-D.) One of the objections repeated by Defendants in response to every request
19 was that “[b]ecause Defendants’ counsel’s motion to be relieved as counsel was
20 based on a material breakdown in the attorney-client relationship, Defendants’
21 counsel is not able to provide full and complete responses at this time.” (See ibid.)
22 Yet, in counsel’s communications with Plaintiffs’ counsel regarding the second
23 extension, there was no indication that discovery responses would be deficient in
24 any way, and Plaintiffs were informed that “counsel will be substituting into the
25 case.” (Bang Decl. ¶ 4, Ex. A.)
26 Even though counsel’s motion to be relieved as counsel was filed in October
27 2021, (RJN, Ex. H), and even though California law requires corporate entities to
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1 be represented by counsel, Thomas G. Ferruzzo, Inc. v. Superior Court (1980) 104
2 Cal. App. 3d 501, 503 (“The rule is clear in this state that, with the sole exception
3 of small claims court, a corporation cannot act in propria persona in a California
4 state court.”), no counsel has appeared on behalf of Defendants FCP Corporate
5 Ltd. and FCP Private, LLC.1 Defendants have now had plenty of time obtain new
6 counsel and amend or supplement their discovery responses, but have failed to do
7 so. Accordingly, Plaintiff Mark Schaub’s Motion to Compel Further Responses
8 (the “Motion”) should be granted and sanctions should be awarded.
9 III. ARGUMENT
10 A. Plaintiff Is Entitled To Expansive Discovery Rights
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11 “California law provides parties with expansive discovery rights.” Lopez v.
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12 Watchtower Bible & Tract Soc’y of N.Y., Inc. (2016) 246 Cal. App. 4th 566, 590.
13 “[A]ny party may obtain discovery regarding any matter, not privileged, that is
14 relevant to the subject matter involved in the pending action . . . if the matter either
15 is itself admissible in evidence or appears reasonably calculated to lead to the
16 discovery of admissible evidence.” Cal. Civ. Proc. Code § 2017.010. “The
17 statutory phrase ‘subject matter’ is broader than the issues and is not limited to
18 admissible evidence.” Lopez, 246 Cal. App. 4th at 591 (citation and internal
19 quotation marks omitted). The discovery rules “are applied liberally in favor of
20 discovery [citation], and (contrary to popular belief), fishing expeditions are
21 permissible in some cases.” Ibid. (citation and internal quotation marks omitted).
22 Misuses of the discovery process include unmeritorious objections to
23 discovery without substantial justification and making evasive responses. Cal. Civ.
24 Proc. Code § 2023.010. These are precisely the type of objections set forth by FCP
25 Corporate, which the Court should not permit to stand.
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If an attorney does not appear on behalf of Defendants FCP Corporate and
FCP Private, Plaintiffs intend to file a motion to strike Defendants FCP Corporate
28 and FCP Private’s Answer and request that default be entered against these entities.
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1 B. Objections Based On A Breakdown Of The Attorney-Client
2 Relationship
3 In each and every response to Mr. Schaub’s discovery requests, Defendant
4 Waters states that “[b]ecause Defendants’ counsel’s motion to be relieved as
5 counsel was based on a material breakdown in the attorney-client relationship,
6 Defendants’ counsel is not able to provide full and complete responses at this
7 time.” This is not a basis for withholding discovery. In any case, Defendant
8 Waters has been on notice since October 12, 2021, that its attorney was requesting
9 to be relieved as counsel from this case. (RJN, Ex. H.) Defendant Waters did not
10 file an objection to counsel’s request, (RJN, Ex. I), and the Court granted the
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11 motion to be relieved as counsel on January 7, 2022, (RJN, Ex. J). Defendant
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12 Waters has had ample time to find new counsel and amend or supplement its
13 responses, but has failed to do so. The responses should be amended with this
14 objection removed.
15 C. Defendant Waters’ Responses to Form Interrogatories Are
16 Evasive and Without Merit
17 A party may move for an order compelling a further response if: “(1) An
18 answer to a particular interrogatory is evasive or incomplete. (2) An exercise of
19 the option to produce documents under Section 2030.230 is unwarranted or the
20 required specification of those documents is inadequate. (3) An objection to an
21 interrogatory is without merit or too general.” Cal. Civ. Proc. Code § 2030.300(a).
22 Plaintiff’s form interrogatories, which are approved by the Judicial Council,
23 requested that Defendant Waters identify which specific allegations of the SAC he
24 denies and to disclose what, if any, facts, witnesses, and documents would support
25 those denials and his affirmative defenses, his position on Plaintiff’s contracts
26 claims, and denials to RFAs.
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1 1. Form Interrogatories related to background information
2 (2.2, 2.3, 2.5, 2.6, 2.7, 2.8, and 2.11)
3 Because Plaintiffs were authorized by statute to request information
4 pertaining to Defendant Waters’ background, Defendant Waters’ refusal to
5 produce that information in response to Form Interrogatory Nos. 2.2, 2.3, 2.5, 2.6,
6 2.7, 2.8, and 2.11 is improper. See Cal. Code Civ. Pro. § 2017.210 (“A party may
7 obtain discovery of the existence and contents of any agreement under which any
8 insurance carrier may be liable to satisfy in whole or in part a judgment that may
9 be entered in the action or to indemnify or reimburse for payments made to satisfy
10 the judgment.”).
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11 2. Form Interrogatories related to insurance (4.1 and 4.2)
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12 Because Plaintiffs were authorized by statute to request information
13 pertaining to Defendant Waters’ liability insurance, Defendant Waters’ refusal to
14 produce that information in response to Form Interrogatory Nos. 4.1 and 4.2 is
15 improper. See Cal. Code Civ. Pro. § 2017.210 (“A party may obtain discovery of
16 the existence and contents of any agreement under which any insurance carrier
17 may be liable to satisfy in whole or in part a judgment that may be entered in the
18 action or to indemnify or reimburse for payments made to satisfy the judgment.”).
19 3. Form Interrogatories related to property damage and other
20 damages (7.1, 7.2, 9.1, 9.2)
21 “[A] defendant in California courts may be required through discovery to
22 disclose not only the evidentiary facts underlying his affirmative defenses and
23 denials but also whether or not he makes a particular contention, either as to the
24 facts or as to the possible issues in the case.” Burke v. Superior Ct. of Sacramento
25 Cty. (1969) 71 Cal. 2d 276, 281 (internal citations omitted).
26 Defendants’ sixth affirmative defense alleges that “Defendants have been
27 damaged in an amount equal to or greater than the amount of damages, if any, to
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1 which Plaintiffs might be entitled.” (RJN, Ex. G.) Plaintiff is therefore entitled to
2 a description of the damages, when the damages occurred, and the amount of
3 damages being claimed.
4 4. Form Interrogatories related to loss of income or earning
5 capacity (8.1, 8.2, 8.4, 8.6, 8.7, and 8.8)
6 “Interrogatories relevant to the subject matter are permissible including
7 questions which might possibly lead to the discovery of admissible evidence or
8 information which would be helpful in preparing for the trial of a particular cause.”
9 Deyo v. Kilbourne (1978) 84 Cal. App. 3d 771, 781. “Interrogatories also serve to
10 facilitate preparation for trial by providing a means of securing evidence and
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11 evidentiary leads.” Ibid. at 779. It is also appropriate for a party to serve
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12 interrogatories seeking the identification of documents that supports a defendant’s
13 defenses. Thoren v. Johnston & Washer (1972) 29 Cal. App. 3d 270, 274.
14 The SAC alleges that Defendant Waters has threatened Plaintiff Schaub with
15 litigation for Defendant Waters’ failed business transactions, including a deal with
16 Hearst Communications. (SAC ¶ 54.) Defendant Waters is likely to make this
17 argument as an affirmative defense and to offset damages. Plaintiffs are therefore
18 entitled to discovery related to Defendant Waters’ loss of income or earning
19 capacity.
20 5. Form Interrogatories related to other damages (9.1 and 9.2)
21 “Interrogatories relevant to the subject matter are permissible including
22 questions which might possibly lead to the discovery of admissible evidence or
23 information which would be helpful in preparing for the trial of a particular cause.”
24 Deyo v. Kilbourne (1978) 84 Cal. App. 3d 771, 781. “Interrogatories also serve to
25 facilitate preparation for trial by providing a means of securing evidence and
26 evidentiary leads.” Ibid. at 779. It is also appropriate for a party to serve
27 interrogatories seeking the identification of documents that supports a defendant’s
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1 defenses. Thoren v. Johnston & Washer (1972) 29 Cal. App. 3d 270, 274. If
2 Defendant Waters believes that he has been damaged in any way by Plaintiffs
3 actions, Plaintiffs are entitled to that information.
4 6. Form Interrogatories related to investigation (12.1 thru
5 12.6)
6 “Interrogatories relevant to the subject matter are permissible including
7 questions which might possibly lead to the discovery of admissible evidence or
8 information which would be helpful in preparing for the trial of a particular cause.”
9 Deyo v. Kilbourne (1978) 84 Cal. App. 3d 771, 781. “Interrogatories also serve to
10 facilitate preparation for trial by providing a means of securing evidence and
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11 evidentiary leads.” Ibid. at 779. It is also appropriate for a party to serve
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12 interrogatories seeking the identification of documents that supports a defendant’s
13 defenses. Thoren v. Johnston & Washer (1972) 29 Cal. App. 3d 270, 274. If
14 Defendant Waters has any information with respect to any investigation that may
15 have been conducted with respect to Plaintiff’s funds that were transferred to FCP
16 Corporate’s account, Plaintiff is entitled to that information.
17 7. Form Interrogatories related to statutory or regulatory
18 violations (14.1)
19 Defendants’ seventh affirmative defense alleges that “Plaintiffs are barred in
20 whole or in part from prosecuting the purported causes of action set forth in the
21 Complaint by the doctrine of unclean hands.” (RJN, Ex. G.) Plaintiff is entitled to
22 any discovery relating to statutory or regulatory rules that Defendant Waters
23 contends he has broken. Burke, supra, 71 Cal. 2d at 281.
24 8. Form Interrogatories related to denials and special or
25 affirmative defenses (15.1)
26 It is appropriate to serve interrogatories requiring the disclosure of the
27 identity and location of persons having knowledge of relevant facts. Deyo v.
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1 Kilbourne (1978) 84 Cal. App. 3d 771, 781. FCP Corporate’s failure to supply
2 specific facts supporting each of its general denial and nine affirmative defenses in
3 response to Form Interrogatory No. 15.1 prevents Plaintiffs from determining
4 whether those defenses have merit or are a sham. Burke, supra, 71 Cal.2d at 285
5 (“[N]o reason appears why such an interrogatory should not be permitted under
6 this principle where, as here, the answer consists solely of a disfavored overbroad
7 general denial which gives the plaintiff no guidance whatsoever regarding what
8 specific matters legitimately are at issue and warrant discovery.”) Plaintiffs are not
9 required to guess as which facts, witnesses, documents, and other information
10 support Defendant Waters’ contentions. Because Defendant Waters lacks any
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11 legitimate grounds to refuse to produce information responsive to Plaintiffs’ form
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12 interrogatories, this motion to compel must be granted.
13 9. Form Interrogatories related to responses to request for
14 admissions (17.1)
15 RFAs are aimed at resolving triable issues, narrowing the matters in dispute,
16 and expediting the trial. Orange County Water Dist. v. The Arnold Eng. Co.
17 (2018) 31 Cal. App. 5th 96, 115; Murillo v. Superior Court (2006) 143 Cal. App.
18 4th 730, 735. Each of these requests are designed to serve the purpose of
19 discovery, i.e. provide greater assistance to the parties in ascertaining the truth, and
20 by providing an effective means of detecting and exposing false, fraudulent, and
21 sham claims and defenses. Deyo v. Kilbourne (1978) 84 Cal. App. 3d 771, 779.
22 Form Interrogatory 17.1 seeks facts, witnesses, and documents related to
23 each RFA that is not an unqualified admission. Defendant Waters should be
24 ordered to provide meaningful responses.
25 10. Form Interrogatories related to contracts (50.1 thru 50.6)
26 The SAC alleges two different breaches of contract. Because Form
27 Interrogatories No. 50.1-50.6 request information pertaining to private contracts
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1 between Defendant Waters and Plaintiff, irrelevance objections do not excuse
2 Defendant Waters from producing responsive information. See Deyo v. Kilbourne,
3 84 Cal. App. 3d 771, 783 (1978) (“A party cannot state, ‘not applicable’ where the
4 interrogatory is clearly applicable to him.”).
5 D. Defendant Waters’ Responses to Requests for Production Are
6 Evasive and Without Merit
7 A party may move for an order compelling further response to requests for
8 documents if: “(1) A statement of compliance with the demand is incomplete.
9 (2) A representation of inability to comply is inadequate, incomplete, or evasive.
10 (3) An objection in the response is without merit or too general.” Cal. Civ. Proc.
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11 Code § 2031.310(a). “[T]he scope of permissible discovery is one of reason, logic
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LOS ANGELES, CA 90025
12 and common sense.” Seahaus La Jolla Owners Assn. v. Superior Court (2014) 224
13 Cal. App. 4th 754, 767. In the context of a request to produce documents, “where .
14 . . there is no privilege issue or claim of attorney work product, that burden is met
15 simply by a fact-specific showing of relevance.” Glenfed Dev. Corp. v. Superior
16 Court (1997) 53 Cal. App. 4th 1113, 1117.
17 Plaintiff’s RFPs are drawn directly from the SAC. They inquire into the
18 nature and ownership of companies Defendant Waters is associated with,
19 Defendant Waters’ relationship with respect to the other two defendant companies,
20 documents related to the stolen funds, documents related to agreements between
21 the parties, and documents relating to employees/agents who may have knowledge
22 about the allegations. Reason, logic, and common sense dictate that Plaintiff’s
23 discovery seeks relevant information.
24 The Discovery Act requires Defendant Waters to produce responsive
25 documents in his possession, custody, or control. Cal. Code. Civ. Pro.
26 §§ 2031.210, 2031.220, 2031.230, 2031.240.
Preview
1 SPERTUS, LANDES & UMHOFER, LLP Matthew Donald Umhofer (SBN 206607) 2 Diane H. Bang (SBN 271939) 1990 South Bundy Dr., Suite 705 3 Los Angeles, California 90025 Telephone: (310) 826-4700 4 Facsimile: (310) 826-4711 matthew@spertuslaw.com 5 diane@spertuslaw.com 6 Attorneys for Mark Schaub and TLG Ltd. 7 SUPERIOR COURT OF THE STATE OF CALIFORNIA 8 FOR THE COUNTY OF SANTA BARBARA 9 10 MARK SCHAUB, an individual; TELEPHONE 310-826-4700; FACSIMILE 310-826-4711 Case No.: 20CV02113 Spertus, Landes & Umhofer, LLP TLG LTD., a Hong Kong limited 11 liability company, 1990 SOUTH BUNDY DR., SUITE 705 Hon. Donna D. Geck LOS ANGELES, CA 90025 12 Plaintiffs, 13 PLAINTIFF MARK SCHAUB’S v. MEMORANDUM OF POINTS & 14 AUTHORITIES IN SUPPORT OF ANDREW WYLES WATERS, an MOTION TO COMPEL FURTHER individual; FCP CORPORATE (HK) RESPONSES BY DEFENDANT 15 LTD., a Hong Kong limited liability ANDREW WATERS AND REQUEST company; FCP PRIVATE, LLC, a FOR SANCTIONS; DECLARATION 16 California limited liability OF DIANE H. BANG AND EXHIBITS corporation; and DOES 1 through 10 17 inclusive, [Notice of Motion to Compel Further 18 Defendants. Responses to Interrogatories; Notice of Motion to Compel Further Responses to 19 Requests for Production; Notice of Motion to Compel Further Responses to 20 Requests for Admissions; Separate Statement; and Request for Judicial 21 Notice filed concurrently] 22 Hearing Date: August 12, 2022 Hearing Time: 10:00 a.m. 23 Dept.: 4 24 SAC filed: June 14, 2021 Trial: Not set 25 26 27 28 SCHAUB’S MEMORANDUM OF POINTS & AUTHORITIES TO COMPEL DISCOVERY BY WATERS 1 TABLE OF CONTENTS 2 PAGE 3 MEMORANDUM OF POINTS AND AUTHORITIES........................................ 1 4 I. INTRODUCTION ........................................................................................ 1 5 II. FACTUAL BACKGROUND ...................................................................... 2 6 A. Overview of Plaintiffs’ Allegations ................................................... 2 7 B. Discovery Served on Defendants ....................................................... 3 8 III. ARGUMENT ............................................................................................... 4 9 A. Plaintiff Is Entitled To Expansive Discovery Rights ......................... 4 10 B. Objections Based On A Breakdown Of The Attorney-Client Relationship ....................................................................................... 5 TELEPHONE 310-826-4700; FACSIMILE 310-826-4711 11 Spertus, Landes & Umhofer, LLP C. Defendant Waters’ Responses to Form Interrogatories Are 1990 SOUTH BUNDY DR., SUITE 705 12 Evasive and Without Merit ................................................................ 5 LOS ANGELES, CA 90025 13 1. Form Interrogatories related to background information (2.2, 2.3, 2.5, 2.6, 2.7, 2.8, and 2.11) ....................................... 6 14 2. Form Interrogatories related to insurance (4.1 and 4.2) .......... 6 15 3. Form Interrogatories related to property damage and 16 other damages (7.1, 7.2, 9.1, 9.2) ............................................ 6 17 4. Form Interrogatories related to loss of income or earning capacity (8.1, 8.2, 8.4, 8.6, 8.7, and 8.8) ................................. 7 18 5. Form Interrogatories related to other damages (9.1 and 19 9.2) ........................................................................................... 7 20 6. Form Interrogatories related to investigation (12.1 thru 12.6) ......................................................................................... 8 21 7. Form Interrogatories related to statutory or regulatory 22 violations (14.1) ....................................................................... 8 23 8. Form Interrogatories related to denials and special or affirmative defenses (15.1) ...................................................... 8 24 9. Form Interrogatories related to responses to request for 25 admissions (17.1) ..................................................................... 9 26 10. Form Interrogatories related to contracts (50.1 thru 50.6) ...... 9 27 D. Defendant Waters’ Responses to Requests for Production Are Evasive and Without Merit .............................................................. 10 28 i SCHAUB’S MEMORANDUM OF POINTS & AUTHORITIES TO COMPEL DISCOVERY BY WATERS 1 E. Defendant Waters’ Responses to Requests for Admissions Are Evasive and Without Merit .............................................................. 11 2 F. Defendant Waters Should Be Sanctioned ........................................ 12 3 IV. CONCLUSION .......................................................................................... 13 4 5 6 7 8 9 10 TELEPHONE 310-826-4700; FACSIMILE 310-826-4711 11 Spertus, Landes & Umhofer, LLP 1990 SOUTH BUNDY DR., SUITE 705 12 LOS ANGELES, CA 90025 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ii SCHAUB’S MEMORANDUM OF POINTS & AUTHORITIES TO COMPEL DISCOVERY BY WATERS 1 TABLE OF AUTHORITIES 2 CASES PAGE(S) 3 Burke v. Superior Ct. of Sacramento Cty., (1969) 71 Cal. 2d 276..................................................................................... 6, 8, 9 4 Cembrook v. Superior Ct. In & For City & Cty. of San Francisco, 5 56 Cal. 2d 423 (1961)........................................................................................... 12 6 Collisson & Kaplan v. Hartunian, 21 Cal. App. 4th 1611 (1994) .............................................................................. 12 7 Deyo v. Kilbourne, 8 (1978) 84 Cal. App. 3d 771...................................................................... 7, 8, 9, 10 9 Glenfed Dev. Corp. v. Superior Court, (1997) 53 Cal. App. 4th 1113 .............................................................................. 10 10 Lopez v. Watchtower Bible & Tract Soc’y of N.Y., Inc., TELEPHONE 310-826-4700; FACSIMILE 310-826-4711 11 Spertus, Landes & Umhofer, LLP (2016) 246 Cal. App. 4th 566 ............................................................................ 1, 4 1990 SOUTH BUNDY DR., SUITE 705 12 Murillo v. Superior Court, LOS ANGELES, CA 90025 (2006) 143 Cal. App. 4th 730 ................................................................................ 9 13 Orange County Water Dist. v. The Arnold Eng. Co., 14 (2018) 31 Cal. App. 5th 96 .................................................................................... 9 15 Pioneer Electronics (USA), Inc. v. Superior Court, (2007) 40 Cal. 4th 360 ......................................................................................... 11 16 Seahaus La Jolla Owners Assn. v. Superior Court, 17 (2014) 224 Cal. App. 4th 754 .............................................................................. 10 18 Thomas G. Ferruzzo, Inc. v. Superior Court, (1980) 104 Cal. App. 3d 501.................................................................................. 4 19 Thoren v. Johnston & Washer, 20 (1972) 29 Cal. App. 3d 270.......................................................................... 7, 8, 12 21 STATUTES 22 Cal. Civ. Proc. Code § 2017.010 ............................................................................... 4 23 Cal. Civ. Proc. Code § 2017.210 ............................................................................... 6 24 Cal. Civ. Proc. Code § 2023.010 ............................................................................... 4 25 Cal. Civ. Proc. Code § 2030.300(a)........................................................................... 5 26 Cal. Civ. Proc. Code § 2030.300(d) ........................................................................ 12 27 Cal. Civ. Proc. Code § 2031.210 ....................................................................... 10, 11 28 Cal. Civ. Proc. Code § 2031.220 ............................................................................. 10 iii SCHAUB’S MEMORANDUM OF POINTS & AUTHORITIES TO COMPEL DISCOVERY BY WATERS 1 Cal. Civ. Proc. Code § 2031.230 ............................................................................. 10 2 Cal. Civ. Proc. Code § 2031.240 ............................................................................. 10 3 Cal. Civ. Proc. Code § 2031.310(a)......................................................................... 10 4 Cal. Civ. Proc. Code § 2031.310(h) ........................................................................ 12 5 Cal. Civ. Proc. Code § 2033.220(a)......................................................................... 11 6 Cal. Civ. Proc. Code § 2033.290(a)......................................................................... 11 7 Cal. Civ. Proc. Code § 2033.290(d) ........................................................................ 12 8 9 10 TELEPHONE 310-826-4700; FACSIMILE 310-826-4711 11 Spertus, Landes & Umhofer, LLP 1990 SOUTH BUNDY DR., SUITE 705 12 LOS ANGELES, CA 90025 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iv SCHAUB’S MEMORANDUM OF POINTS & AUTHORITIES TO COMPEL DISCOVERY BY WATERS 1 MEMORANDUM OF POINTS AND AUTHORITIES 2 I. INTRODUCTION 3 Plaintiffs Mark Schaub and his company, TLG Ltd., had $2 million stolen 4 from them by Defendants. Plaintiffs were fraudulently induced into sending funds 5 to accounts controlled by Defendant Andrew Waters, and now Defendant Waters 6 refuses to return those funds, making up more lies along the way. Through his 7 companies, Defendants FCP Corporate Ltd. and FCP Private, LLC, Defendant 8 Waters has been operating a Ponzi scheme, luring unsuspecting wealthy investors 9 into sending him hundreds of thousands of dollars, which he then misappropriates 10 for his own personal use. (Request for Judicial Notice (“RJN”) Ex. F (Second Am. TELEPHONE 310-826-4700; FACSIMILE 310-826-4711 Spertus, Landes & Umhofer, LLP 11 Compl. (“SAC”)) ¶ 1.) Defendant Waters created various shell companies to 1990 SOUTH BUNDY DR., SUITE 705 LOS ANGELES, CA 90025 12 mislead potential investors, including Plaintiffs, into believing each company 13 would be profitable. (Ibid.) Plaintiffs are entitled to discovery regarding these 14 companies in order to prove up his claims for conversion, fraud, concealment, 15 breaches of contract, and unjust enrichment. 16 Under California law, parties are afforded expansive discovery rights, with 17 rules liberally applied in favor of discovery. Lopez v. Watchtower Bible & Tract 18 Soc’y of N.Y., Inc. (2016) 246 Cal. App. 4th 566, 590-91. Defendants cannot 19 ignore these rights by serving nothing but unmeritorious, evasive objections, as 20 they have done here. Defendants were given two extensions of time to respond 21 and produce documents, first as a courtesy because of the holidays, and second 22 based on counsel’s representation that “the discovery is voluminous.” (Decl. of 23 Diane H. Bang in Supp. of Mot. to Compel (“Bang Decl.”) ¶¶ 3-4, Ex. A.) Despite 24 the courtesy given, Defendants served only boilerplate objections and no 25 documents, even though counsel agreed in writing that Dixon would respond to 26 Plaintiffs’ contention discovery on December 28, 2022. Defendants should be 27 sanctioned for their conduct for this type of misuse of the discovery process. 28 1 SCHAUB’S MEMORANDUM OF POINTS & AUTHORITIES TO COMPEL DISCOVERY BY WATERS 1 II. FACTUAL BACKGROUND 2 A. Overview of Plaintiffs’ Allegations 3 Through his companies, Defendants FCP Corporate Ltd. and FCP Private, 4 LLC, Defendant Waters has essentially been operating a shell factory enterprise by 5 creating various startup companies and misleading potential investors to believe 6 each company would be operating and profitable. Plaintiff Mark Schaub is an 7 individual who, while living in Hong Kong, was befriended and then ultimately 8 defrauded by Defendant Waters. He believed Defendant Waters to be a successful 9 businessman and that he was running real businesses with real potential for growth 10 and profitability. (SAC ¶¶ 17-18.) TELEPHONE 310-826-4700; FACSIMILE 310-826-4711 Spertus, Landes & Umhofer, LLP 11 In 2019, Mr. Schaub was informed that HSBC was planning to close his 1990 SOUTH BUNDY DR., SUITE 705 LOS ANGELES, CA 90025 12 company account, TLG Ltd. Defendant Waters convinced Mr. Schaub that HSBC 13 was closing the account because the bank believed it to contain tainted funds. Mr. 14 Schaub was unfamiliar with Hong Kong banking regulations and believed 15 Defendant Waters’ representations. Defendant Waters induced Mr. Schaub to have 16 approximately $50,000 transferred to the FCP Corporate account controlled by 17 Waters, promising that this was a client account and that the funds would be held 18 in trust. (SAC ¶ 27.) 19 In July 2019, instead of the planned $50,000, approximately $2 million was 20 mistakenly transferred from TLG to FCP Corporate’s account. (SAC ¶ 32.) When 21 Mr. Schaub inquired about the money, rather than returning the funds to Mr. 22 Schaub, Defendant Waters proceeded to drain FCP Corporate’s account of the 23 entire $2 million. (SAC ¶ 41.) Meanwhile, Defendant Waters falsely told Mr. 24 Schaub that the bank had frozen the accounts where Plaintiffs’ funds were 25 transferred to, that the bank believed the funds were from an illegitimate source, 26 and that he would have to go to Hong Kong to resolve the situation with the frozen 27 accounts. For months, Defendant Waters proceeded to string Mr. Schaub along 28 2 SCHAUB’S MEMORANDUM OF POINTS & AUTHORITIES TO COMPEL DISCOVERY BY WATERS 1 with these lies. (SAC ¶¶ 42-43.) Mr. Schaub demanded the immediate return of 2 his funds, Defendant Waters refused, and he continues to refuse to this day. 3 B. Discovery Served on Defendants 4 On October 29, 2021, Plaintiff served a set of form interrogatories, requests 5 for production of documents (“RFPs”), and requests for admissions (“RFAs”) 6 relating to the allegations of the SAC on all three defendants. (Bang Decl. ¶ 2.) 7 On November 16, 2021, per Defendants’ request, Plaintiffs agreed to extend the 8 deadline for Defendants’ discovery responses to December 15, 2021, as a courtesy 9 to counsel. (Bang Decl. ¶ 3, Ex. A.) On December 10, 2021, Defendants made a 10 second request to extend the deadline to respond to discovery, stating that “the TELEPHONE 310-826-4700; FACSIMILE 310-826-4711 Spertus, Landes & Umhofer, LLP 11 discovery is voluminous.” (Ibid. ¶ 4, Ex. A) Believing that Defendants would 1990 SOUTH BUNDY DR., SUITE 705 LOS ANGELES, CA 90025 12 respond in good faith and that they were in the process of gathering and reviewing 13 documents for production, Plaintiffs agreed to extend the deadline to December 28, 14 2021, giving Defendants an additional four weeks from their statutory deadline to 15 respond. (Ibid. ¶ 5.) 16 However, on the agreed upon deadline, Defendants served boilerplate, 17 evasive objections and did not produce a single document. (Bang Decl. ¶ 6, Exs. 18 B-D.) One of the objections repeated by Defendants in response to every request 19 was that “[b]ecause Defendants’ counsel’s motion to be relieved as counsel was 20 based on a material breakdown in the attorney-client relationship, Defendants’ 21 counsel is not able to provide full and complete responses at this time.” (See ibid.) 22 Yet, in counsel’s communications with Plaintiffs’ counsel regarding the second 23 extension, there was no indication that discovery responses would be deficient in 24 any way, and Plaintiffs were informed that “counsel will be substituting into the 25 case.” (Bang Decl. ¶ 4, Ex. A.) 26 Even though counsel’s motion to be relieved as counsel was filed in October 27 2021, (RJN, Ex. H), and even though California law requires corporate entities to 28 3 SCHAUB’S MEMORANDUM OF POINTS & AUTHORITIES TO COMPEL DISCOVERY BY WATERS 1 be represented by counsel, Thomas G. Ferruzzo, Inc. v. Superior Court (1980) 104 2 Cal. App. 3d 501, 503 (“The rule is clear in this state that, with the sole exception 3 of small claims court, a corporation cannot act in propria persona in a California 4 state court.”), no counsel has appeared on behalf of Defendants FCP Corporate 5 Ltd. and FCP Private, LLC.1 Defendants have now had plenty of time obtain new 6 counsel and amend or supplement their discovery responses, but have failed to do 7 so. Accordingly, Plaintiff Mark Schaub’s Motion to Compel Further Responses 8 (the “Motion”) should be granted and sanctions should be awarded. 9 III. ARGUMENT 10 A. Plaintiff Is Entitled To Expansive Discovery Rights TELEPHONE 310-826-4700; FACSIMILE 310-826-4711 Spertus, Landes & Umhofer, LLP 11 “California law provides parties with expansive discovery rights.” Lopez v. 1990 SOUTH BUNDY DR., SUITE 705 LOS ANGELES, CA 90025 12 Watchtower Bible & Tract Soc’y of N.Y., Inc. (2016) 246 Cal. App. 4th 566, 590. 13 “[A]ny party may obtain discovery regarding any matter, not privileged, that is 14 relevant to the subject matter involved in the pending action . . . if the matter either 15 is itself admissible in evidence or appears reasonably calculated to lead to the 16 discovery of admissible evidence.” Cal. Civ. Proc. Code § 2017.010. “The 17 statutory phrase ‘subject matter’ is broader than the issues and is not limited to 18 admissible evidence.” Lopez, 246 Cal. App. 4th at 591 (citation and internal 19 quotation marks omitted). The discovery rules “are applied liberally in favor of 20 discovery [citation], and (contrary to popular belief), fishing expeditions are 21 permissible in some cases.” Ibid. (citation and internal quotation marks omitted). 22 Misuses of the discovery process include unmeritorious objections to 23 discovery without substantial justification and making evasive responses. Cal. Civ. 24 Proc. Code § 2023.010. These are precisely the type of objections set forth by FCP 25 Corporate, which the Court should not permit to stand. 26 27 1 If an attorney does not appear on behalf of Defendants FCP Corporate and FCP Private, Plaintiffs intend to file a motion to strike Defendants FCP Corporate 28 and FCP Private’s Answer and request that default be entered against these entities. 4 SCHAUB’S MEMORANDUM OF POINTS & AUTHORITIES TO COMPEL DISCOVERY BY WATERS 1 B. Objections Based On A Breakdown Of The Attorney-Client 2 Relationship 3 In each and every response to Mr. Schaub’s discovery requests, Defendant 4 Waters states that “[b]ecause Defendants’ counsel’s motion to be relieved as 5 counsel was based on a material breakdown in the attorney-client relationship, 6 Defendants’ counsel is not able to provide full and complete responses at this 7 time.” This is not a basis for withholding discovery. In any case, Defendant 8 Waters has been on notice since October 12, 2021, that its attorney was requesting 9 to be relieved as counsel from this case. (RJN, Ex. H.) Defendant Waters did not 10 file an objection to counsel’s request, (RJN, Ex. I), and the Court granted the TELEPHONE 310-826-4700; FACSIMILE 310-826-4711 Spertus, Landes & Umhofer, LLP 11 motion to be relieved as counsel on January 7, 2022, (RJN, Ex. J). Defendant 1990 SOUTH BUNDY DR., SUITE 705 LOS ANGELES, CA 90025 12 Waters has had ample time to find new counsel and amend or supplement its 13 responses, but has failed to do so. The responses should be amended with this 14 objection removed. 15 C. Defendant Waters’ Responses to Form Interrogatories Are 16 Evasive and Without Merit 17 A party may move for an order compelling a further response if: “(1) An 18 answer to a particular interrogatory is evasive or incomplete. (2) An exercise of 19 the option to produce documents under Section 2030.230 is unwarranted or the 20 required specification of those documents is inadequate. (3) An objection to an 21 interrogatory is without merit or too general.” Cal. Civ. Proc. Code § 2030.300(a). 22 Plaintiff’s form interrogatories, which are approved by the Judicial Council, 23 requested that Defendant Waters identify which specific allegations of the SAC he 24 denies and to disclose what, if any, facts, witnesses, and documents would support 25 those denials and his affirmative defenses, his position on Plaintiff’s contracts 26 claims, and denials to RFAs. 27 28 5 SCHAUB’S MEMORANDUM OF POINTS & AUTHORITIES TO COMPEL DISCOVERY BY WATERS 1 1. Form Interrogatories related to background information 2 (2.2, 2.3, 2.5, 2.6, 2.7, 2.8, and 2.11) 3 Because Plaintiffs were authorized by statute to request information 4 pertaining to Defendant Waters’ background, Defendant Waters’ refusal to 5 produce that information in response to Form Interrogatory Nos. 2.2, 2.3, 2.5, 2.6, 6 2.7, 2.8, and 2.11 is improper. See Cal. Code Civ. Pro. § 2017.210 (“A party may 7 obtain discovery of the existence and contents of any agreement under which any 8 insurance carrier may be liable to satisfy in whole or in part a judgment that may 9 be entered in the action or to indemnify or reimburse for payments made to satisfy 10 the judgment.”). TELEPHONE 310-826-4700; FACSIMILE 310-826-4711 Spertus, Landes & Umhofer, LLP 11 2. Form Interrogatories related to insurance (4.1 and 4.2) 1990 SOUTH BUNDY DR., SUITE 705 LOS ANGELES, CA 90025 12 Because Plaintiffs were authorized by statute to request information 13 pertaining to Defendant Waters’ liability insurance, Defendant Waters’ refusal to 14 produce that information in response to Form Interrogatory Nos. 4.1 and 4.2 is 15 improper. See Cal. Code Civ. Pro. § 2017.210 (“A party may obtain discovery of 16 the existence and contents of any agreement under which any insurance carrier 17 may be liable to satisfy in whole or in part a judgment that may be entered in the 18 action or to indemnify or reimburse for payments made to satisfy the judgment.”). 19 3. Form Interrogatories related to property damage and other 20 damages (7.1, 7.2, 9.1, 9.2) 21 “[A] defendant in California courts may be required through discovery to 22 disclose not only the evidentiary facts underlying his affirmative defenses and 23 denials but also whether or not he makes a particular contention, either as to the 24 facts or as to the possible issues in the case.” Burke v. Superior Ct. of Sacramento 25 Cty. (1969) 71 Cal. 2d 276, 281 (internal citations omitted). 26 Defendants’ sixth affirmative defense alleges that “Defendants have been 27 damaged in an amount equal to or greater than the amount of damages, if any, to 28 6 SCHAUB’S MEMORANDUM OF POINTS & AUTHORITIES TO COMPEL DISCOVERY BY WATERS 1 which Plaintiffs might be entitled.” (RJN, Ex. G.) Plaintiff is therefore entitled to 2 a description of the damages, when the damages occurred, and the amount of 3 damages being claimed. 4 4. Form Interrogatories related to loss of income or earning 5 capacity (8.1, 8.2, 8.4, 8.6, 8.7, and 8.8) 6 “Interrogatories relevant to the subject matter are permissible including 7 questions which might possibly lead to the discovery of admissible evidence or 8 information which would be helpful in preparing for the trial of a particular cause.” 9 Deyo v. Kilbourne (1978) 84 Cal. App. 3d 771, 781. “Interrogatories also serve to 10 facilitate preparation for trial by providing a means of securing evidence and TELEPHONE 310-826-4700; FACSIMILE 310-826-4711 Spertus, Landes & Umhofer, LLP 11 evidentiary leads.” Ibid. at 779. It is also appropriate for a party to serve 1990 SOUTH BUNDY DR., SUITE 705 LOS ANGELES, CA 90025 12 interrogatories seeking the identification of documents that supports a defendant’s 13 defenses. Thoren v. Johnston & Washer (1972) 29 Cal. App. 3d 270, 274. 14 The SAC alleges that Defendant Waters has threatened Plaintiff Schaub with 15 litigation for Defendant Waters’ failed business transactions, including a deal with 16 Hearst Communications. (SAC ¶ 54.) Defendant Waters is likely to make this 17 argument as an affirmative defense and to offset damages. Plaintiffs are therefore 18 entitled to discovery related to Defendant Waters’ loss of income or earning 19 capacity. 20 5. Form Interrogatories related to other damages (9.1 and 9.2) 21 “Interrogatories relevant to the subject matter are permissible including 22 questions which might possibly lead to the discovery of admissible evidence or 23 information which would be helpful in preparing for the trial of a particular cause.” 24 Deyo v. Kilbourne (1978) 84 Cal. App. 3d 771, 781. “Interrogatories also serve to 25 facilitate preparation for trial by providing a means of securing evidence and 26 evidentiary leads.” Ibid. at 779. It is also appropriate for a party to serve 27 interrogatories seeking the identification of documents that supports a defendant’s 28 7 SCHAUB’S MEMORANDUM OF POINTS & AUTHORITIES TO COMPEL DISCOVERY BY WATERS 1 defenses. Thoren v. Johnston & Washer (1972) 29 Cal. App. 3d 270, 274. If 2 Defendant Waters believes that he has been damaged in any way by Plaintiffs 3 actions, Plaintiffs are entitled to that information. 4 6. Form Interrogatories related to investigation (12.1 thru 5 12.6) 6 “Interrogatories relevant to the subject matter are permissible including 7 questions which might possibly lead to the discovery of admissible evidence or 8 information which would be helpful in preparing for the trial of a particular cause.” 9 Deyo v. Kilbourne (1978) 84 Cal. App. 3d 771, 781. “Interrogatories also serve to 10 facilitate preparation for trial by providing a means of securing evidence and TELEPHONE 310-826-4700; FACSIMILE 310-826-4711 Spertus, Landes & Umhofer, LLP 11 evidentiary leads.” Ibid. at 779. It is also appropriate for a party to serve 1990 SOUTH BUNDY DR., SUITE 705 LOS ANGELES, CA 90025 12 interrogatories seeking the identification of documents that supports a defendant’s 13 defenses. Thoren v. Johnston & Washer (1972) 29 Cal. App. 3d 270, 274. If 14 Defendant Waters has any information with respect to any investigation that may 15 have been conducted with respect to Plaintiff’s funds that were transferred to FCP 16 Corporate’s account, Plaintiff is entitled to that information. 17 7. Form Interrogatories related to statutory or regulatory 18 violations (14.1) 19 Defendants’ seventh affirmative defense alleges that “Plaintiffs are barred in 20 whole or in part from prosecuting the purported causes of action set forth in the 21 Complaint by the doctrine of unclean hands.” (RJN, Ex. G.) Plaintiff is entitled to 22 any discovery relating to statutory or regulatory rules that Defendant Waters 23 contends he has broken. Burke, supra, 71 Cal. 2d at 281. 24 8. Form Interrogatories related to denials and special or 25 affirmative defenses (15.1) 26 It is appropriate to serve interrogatories requiring the disclosure of the 27 identity and location of persons having knowledge of relevant facts. Deyo v. 28 8 SCHAUB’S MEMORANDUM OF POINTS & AUTHORITIES TO COMPEL DISCOVERY BY WATERS 1 Kilbourne (1978) 84 Cal. App. 3d 771, 781. FCP Corporate’s failure to supply 2 specific facts supporting each of its general denial and nine affirmative defenses in 3 response to Form Interrogatory No. 15.1 prevents Plaintiffs from determining 4 whether those defenses have merit or are a sham. Burke, supra, 71 Cal.2d at 285 5 (“[N]o reason appears why such an interrogatory should not be permitted under 6 this principle where, as here, the answer consists solely of a disfavored overbroad 7 general denial which gives the plaintiff no guidance whatsoever regarding what 8 specific matters legitimately are at issue and warrant discovery.”) Plaintiffs are not 9 required to guess as which facts, witnesses, documents, and other information 10 support Defendant Waters’ contentions. Because Defendant Waters lacks any TELEPHONE 310-826-4700; FACSIMILE 310-826-4711 Spertus, Landes & Umhofer, LLP 11 legitimate grounds to refuse to produce information responsive to Plaintiffs’ form 1990 SOUTH BUNDY DR., SUITE 705 LOS ANGELES, CA 90025 12 interrogatories, this motion to compel must be granted. 13 9. Form Interrogatories related to responses to request for 14 admissions (17.1) 15 RFAs are aimed at resolving triable issues, narrowing the matters in dispute, 16 and expediting the trial. Orange County Water Dist. v. The Arnold Eng. Co. 17 (2018) 31 Cal. App. 5th 96, 115; Murillo v. Superior Court (2006) 143 Cal. App. 18 4th 730, 735. Each of these requests are designed to serve the purpose of 19 discovery, i.e. provide greater assistance to the parties in ascertaining the truth, and 20 by providing an effective means of detecting and exposing false, fraudulent, and 21 sham claims and defenses. Deyo v. Kilbourne (1978) 84 Cal. App. 3d 771, 779. 22 Form Interrogatory 17.1 seeks facts, witnesses, and documents related to 23 each RFA that is not an unqualified admission. Defendant Waters should be 24 ordered to provide meaningful responses. 25 10. Form Interrogatories related to contracts (50.1 thru 50.6) 26 The SAC alleges two different breaches of contract. Because Form 27 Interrogatories No. 50.1-50.6 request information pertaining to private contracts 28 9 SCHAUB’S MEMORANDUM OF POINTS & AUTHORITIES TO COMPEL DISCOVERY BY WATERS 1 between Defendant Waters and Plaintiff, irrelevance objections do not excuse 2 Defendant Waters from producing responsive information. See Deyo v. Kilbourne, 3 84 Cal. App. 3d 771, 783 (1978) (“A party cannot state, ‘not applicable’ where the 4 interrogatory is clearly applicable to him.”). 5 D. Defendant Waters’ Responses to Requests for Production Are 6 Evasive and Without Merit 7 A party may move for an order compelling further response to requests for 8 documents if: “(1) A statement of compliance with the demand is incomplete. 9 (2) A representation of inability to comply is inadequate, incomplete, or evasive. 10 (3) An objection in the response is without merit or too general.” Cal. Civ. Proc. TELEPHONE 310-826-4700; FACSIMILE 310-826-4711 Spertus, Landes & Umhofer, LLP 11 Code § 2031.310(a). “[T]he scope of permissible discovery is one of reason, logic 1990 SOUTH BUNDY DR., SUITE 705 LOS ANGELES, CA 90025 12 and common sense.” Seahaus La Jolla Owners Assn. v. Superior Court (2014) 224 13 Cal. App. 4th 754, 767. In the context of a request to produce documents, “where . 14 . . there is no privilege issue or claim of attorney work product, that burden is met 15 simply by a fact-specific showing of relevance.” Glenfed Dev. Corp. v. Superior 16 Court (1997) 53 Cal. App. 4th 1113, 1117. 17 Plaintiff’s RFPs are drawn directly from the SAC. They inquire into the 18 nature and ownership of companies Defendant Waters is associated with, 19 Defendant Waters’ relationship with respect to the other two defendant companies, 20 documents related to the stolen funds, documents related to agreements between 21 the parties, and documents relating to employees/agents who may have knowledge 22 about the allegations. Reason, logic, and common sense dictate that Plaintiff’s 23 discovery seeks relevant information. 24 The Discovery Act requires Defendant Waters to produce responsive 25 documents in his possession, custody, or control. Cal. Code. Civ. Pro. 26 §§ 2031.210, 2031.220, 2031.230, 2031.240.