Party Discovery: CATHAY BANK, A CALIFORNIA BANKING CORPORATION VS. RAYMOND XIANG ZHANG et al

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                                UMC

SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO

Document Scanning Lead Sheet
Oct-15-2012 4:17 pm

Case Number: CGC-10-500934
Filing Date: Oct-15-2012 4:16
Filed by: VANESSA WU
Juke Box: 001 Image: 03802791
GENERIC CIVIL FILING (NO FEE)

CATHAY BANK, A CALIFORNIA BANKING CORPORATION VS. RAYMOND
XIANG ZHANG et al

001003802791

Instructions:
Please place this sheet on top of the document to be scanned.BY FAX

SoU me IY DH BRB YW ND

Michael Gerard Fletcher (State Bar No. 070849)
mfletcher@frandzel.com

Kenneth N. Russak (State Bar No. 107283)
krussak@frandzel.com

Hanna B. Raanan (State Bar No. 261014)
hraanan@frandzel.com

FRANDZEL ROBINS BLOOM & CSATO, L.C.

6500 Wilshire Boulevard

Seventeenth Floor

Los Angeles, California 90048-4920

Telephone: (323) 852-1000

Facsimile: (323) 651-2577

Attorneys for Plaintiff and Cross-Defendant
CATHAY BANK

SUPERIOR COURT OF CALIFORNIA

COUNTY OF SAN FRANCISCO, NORTHERN DISTRICT

CATHAY BANK, a California banking
corporation,

Plaintiff,
v.

RAYMOND XIANG KAI ZHANG, aka
RAYMOND KAI ZHANG, aka RAYMOND
ZHANG, aka XIANG KAI ZHANG, aka
XIANG ZHANG, aka ZHANG XIANG, an
individual; CINDY ZHANG, an individual;
DONG YING QUI, an individual; XIANG
KAI, LLC, a California limited liability
company ; RAY KAI, LLC, a California
limited liability company; ZHANGS, LLC,
California limited liability company; and
DOES | through 200, inclusive,

Defendant.

RAYMOND XIANG KAI ZHANG, an
individual, CINDY ZHANG, an individual;
DONG YING QUI, an individual; RAY KAI,
LLC, a California limited liability company;
and ZHANGS, LLC, a California limited
liability company,

Cross-Complainant,

1093195.1 | 02300-0790

CASE No. CGC-10-500934

PLAINTIFF'S RESPONSE TO
DEFENDANTS' SEPARATE
STATEMENT OF DISPUTED
DISCOVERY REQUESTS UNDER CRC
3.1345 IN SUPPORT OF MOTION TO
COMPEL FURTHER RESPONSES TO
SPECIAL INTERROGATORIES, SET
ONE (CCP §2030.300) AND FOR
SANCTIONS CCP §§2023.030,

2030.290(C))

Date: October 26, 2012
Time: 9:00 a.m.

Dept.: 302

1_
PLAINTIFF'S RESPONSE TO DEFENDANTS' SEPARATE STATEMENT OF DISPUTED DISCOVERY
REQUESTS UNDER CRC 3.1345 IN SUPPORT OF MOTION TO COMPEL FURTHER RESPONSES TO
SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300) AND FOR SANCTIONS CCP §§2023.030,
2030.290(C))FRANDZEL ROBINS BLOOM & CsATo, L.C,
‘6500 WILSHIRE BOULEVARD, | 7TH FLOOR
LOS ANGELES, CALIFORNIA 0048-4920

(323) 852-1000

Co ON DH BF WwW KY m

YB N YY YN YN NR RNY! Be ew Be ewe ew we we
ery rnyvr FF VPN FEF SO we KH AAEHE HAS

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v.

CATHAY BANK, a California banking
corporation; and DOES 201-230, Inclusive,

Cross-Defendant.

AND RELATED CROSS-ACTION

SPECIAL INTERROGATORY NO. 2:
Identify all documents that refer to the CONSTRUCTION LOAN.

PLAINTIFF'S RESPONSE TO SPECIAL INTERROGATORY NO. 2:

Objection. The Bank objects to this Interrogatory on the grounds that it is overbroad,
unduly burdensome and oppressive. Due to the fact that the "Construction Loan" (as that term is
defined by the propounding party) began in 2006 and continued until the Borrower's default in
2010 and because numerous documents exist which "refer" to the Construction Loan, an
compilation, [sic] abstract, audit or summary of the responding party's records is necessary in -
order to answer the interrogatory; and no such compilation presently exists. As a result, the burden
or expense of preparing or making it would be substantially the same for the interrogating party as
for the responding party. Therefore, pursuant to CCP §2030.230, Cathay Bank will provide
Propounding Party a reasonable opportunity to examine, audit, or inspect the non-privileged, non-
confidential documents which refer to the Construction Loan and to make copies, compilations,
abstracts, or summaries of them on a date to be agreed to between counsel for the parties.

REASONS WHY FURTHER RESPONSE SHOULD BE COMPELLED TO SPECIAL

INTERROGATORY NO. 2:

Plaintiffs objections are meritless and should be overruled. To the extent Plaintiff objects
that this interrogatory is unduly burdensome and oppressive, such objections are valid only if the
burden is demonstrated to result in injustice. See West Pico Furniture Co. v. Superior Court

(1961) 56 Cal.2d 407, 418. Plaintiff has not asserted, or made any attempt to show, any injustice

1093195.1 | 023000-0790 2
PLAINTIFF'S RESPONSE TO DEFENDANTS’ SEPARATE STATEMENT OF DISPUTED DISCOVERY
REQUESTS UNDER CRC 3.1345 IN SUPPORT OF MOTION TO COMPEL FURTHER RESPONSES TO
SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300) AND FOR SANCTIONS CCP §§2023.030,
2030.290(C))LOS ANGELES, CALIFORNIA 90048-4920
(323) 852-1000

FRANDZEL ROBINS BLOoM & CsaTo, L.C.
500 WisHIRE BOULEVARD, | 7H FLOOR

SOU mem YD DH RB WN

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here and this objection should be overruled.

Further, Plaintiff improperly attempts to invoke CCP §2030.230. Plaintiff has not shown
that the burden or expense of preparing or making a compilation, abstract, audit, or summary of or
from the documents would be substantially the same for both parties, a requirement for CCP
§2030.230 to apply. To the contrary, Plaintiff has access to all such documents and the burden
would be substantially greater for Defendants. Thus, a reference to CCP §2030.230 is an evasive
response. CCP §2023.010(f). Further, to comply with CCP 2030.230, a sufficient answer requires
Plaintiff "to specify the writings from which the answer may be derived or ascertained. This
specification shall be in sufficient detail to permit the propounding party to locate and to identify,
as readily as the responding party can, the documents from which the answer may be ascertained.”
CCP §2030.230. Only then would Plaintiffs offer to "afford to the propounding party a reasonable
opportunity to examine, audit or inspect these documents and make copies, compilations,
abstracts, or summaries of them" be appropriate. Since Plaintiff completely failed to provide any
such specifications, but merely stated that "numerous documents exist which ‘refer’ to the
Construction Loan," Plaintiff may not rely on CCP §2030.230 and must be compelled to identify
the documents that refer to the CONSTRUCTION LOAN, as requested.

PLAINTIFF'S RESPONSE AND REASON WHY NO FURTHER RESPONSE IS

REQUIRED TO SPECIAL INTERROGATORY NO. 2:

Defendant's protest regarding Plaintiff's response is unjustified, particularly since Plaintiff

has produced all documents in its files related to the Construction Loan, in the manner in which
they are kept in the ordinary course of business, which are not privileged and not confidential,
comprising some 8,328 pages and the large majority of which are documents of between three and
ten pages long. Defendants, thus, not only have equal access to the documents, they have the
documents themselves as part of a production of documents comprising some 8,328 pages of
documents, the vast majority of which are documents of ten or fewer pages. No purpose would be
served by requiring Plaintiff to make a list of the documents already in the possession of the cross-

defendants that “refer to” the construction loan, as that information is readily apparent from the
1093195.1 | 02300-0790 3
PLAINTIFF'S RESPONSE TO DEFENDANTS’ SEPARATE STATEMENT OF DISPUTED DISCOVERY
REQUESTS UNDER CRC 3.1345 IN SUPPORT OF MOTION TO COMPEL FURTHER RESPONSES TO
SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300) AND FOR SANCTIONS CCP §§2023.030,
2030.290(C))FRANOZEL ROBINS BLOOM & CsarTo, L.C.
‘6500 WILSHIRE BOULEVARO, | 7TH FLOOR
LOS ANGELES, CALIFORNIA 90048-4920

(323) 852-1000

e @

face of the documents. Defendants’ refusal to acknowledge the appropriateness of Plaintiff's
reliance on CCP 2030.230 not only is entirely unjustified, but is affirmative evidence of
Defendants’ motive to harass, burden and oppress Plaintiff.

SPECIAL INTERROGATORY NO. 3:

Identify the content of the negotiations between YOU and KAI, including KAI's members
RAYMOND and CINDY, XIANG, ZHANGS, or any other person or entity regarding the
CONSTRUCTION LOAN.

PLAINTIFF'S RESPONSE TO SPECIAL INTERROGATORY NO. 3:

Objection. The interrogatory is vague and ambiguous, including without limitation,
because the term [sic] "negotiations". The Bank also objects to this interrogatory on the grounds
that it requests information protected by attorney-client privilege and information that is attorney-
work product. The Bank further objects to this interrogatory as overbroad, unduly burdensome and
oppressive. Subject to and without waiving the objections, and to the extent this interrogatory
refers to communications and discussions prior to October 19, 2006 relating to the terms of the
Construction Loan, Cathay Bank responds as follows: the contents of the discussions and
communications regarding, and the ultimate agreement between Bank and Kai, including its
members, the Construction Loan [sic] are evidenced and encompassed by construction loan
agreement dated October 19, 2006, the promissory note dated October 19, 2006, and the
Construction Deed of Trust dated October 19, 2006, all of which are attached to Cathay Bank's
Verified Complaint respectively as Exhibits 10, 11, and 12.

REASONS WHY FURTHER RESPONSE SHOULD BE COMPELLED TO SPECIAL

INTERROGATORY NO. 3:

Plaintiff's objections to this interrogatory are frivolous, without merit and should be
overruled. Plaintiff owes a duty to respond in good faith as best it can. Deyo v. Kilbourne (1978)
84 Cal.App. 771, 783. The term "negotiations" is a common term and in the context of this
litigation, which involved multiple agreements, its meaning is clear and Plaintiff's feigned inability

to understand is in bad faith. If Plaintiff had any confusion with respect to the term, its counsel
1093195.1 | 23000-0790 4
PLAINTIFF'S RESPONSE TO DEFENDANTS' SEPARATE STATEMENT OF DISPUTED DISCOVERY
REQUESTS UNDER CRC 3.1345 IN SUPPORT OF MOTION TO COMPEL FURTHER RESPONSES TO
SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300) AND FOR SANCTIONS CCP §§2023.030,
2030.290(C))FRANDZEL ROBINS BLOOM & CSATO, L.C.
‘6500 WILSHIRE BOULEVARD, | 7TH FLOOR
LOS ANGELES, CALIFORNIA GOO48-4920
(323) 8S2-1000

Co me NY DH RB WN

10

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could have contacted our office for clarification at any time. Plaintiff's objections that there
interrogatories seek information protected by attorney-client privilege are also meritless. Attorney
client privilege attached to communications between an attomey and its client and the work
product doctrine protects the work product of attorneys. Cal. Evid. Code § 354; CCP §2018.030.
The act of relaying facts to counsel does not make such information privileged. "{T]he attorney-
client privilege only protects disclosure of communication between the attorney and the client; it
does not protect disclosure of underlying facts which may be referenced within a qualifying
communication." State Farm Fire & Casualty Co. v. Superior Court (1997) 54 Cal.App.4" 625,
639. This interrogatory merely seeks information regarding negotiations that took place between
Cathay Bank and Defendants, which would destroy any claim to privilege, prior to litigation and
in anticipation of an agreement between Plaintiff and Defendants. To the extent Plaintiff Object
that this interrogatory is unduly burdensome and oppressive, such objections are valid only if the
burden is demonstrated to result in injustice. See West Pico Furniture Co. v. Superior Court
(1961) 56 Cal.2d 407, 418. Plaintiff has not asserted, or made any attempt to show, any injustice
here and this objection should be overruled.

Plaintiff's response to this interrogatory by referring to the written agreements is blatantly
inadequate. such a response fails to provide the contents of the negotiations as requested.
Plaintiff is well aware that the terms of the Construction Loan are at issue in this case. This
interrogatory seeks the content of negotiations, which, by definition, anticipate agreements and are
not identical to agreements themselves. Plaintiff's failure to response with the content of the
discussions and communications prior to entering into an agreement is in bad faith. Plaintiff's
failure to provide such information is evasive and a misuse of the discovery process under CCP
§2023.010(f).

PLAINTIFF'S RESPONSE AND REASON WHY NO FURTHER RESPONSE IS

REQUIRED TO SPECIAL INTERROGATORY NO. 3:

Defendant's protest as to Plaintiff's assertion of attorney client and work-product privileges

is misguided at best. Plaintiff has not withheld any non-privileged information about the

1093195.1 | 023000-0790 5
PLAINTIFF'S RESPONSE TO DEFENDANTS’ SEPARATE STATEMENT OF DISPUTED DISCOVERY
REQUESTS UNDER CRC 3.1345 IN SUPPORT OF MOTION TO COMPEL FURTHER RESPONSES TO
SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300) AND FOR SANCTIONS CCP §§2023.030,
2030.290(C))SO wm ND HW BF WN

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6500 WILSHIRE BOULEVARD, | 77H FLOOR
LOS ANGELES, CALIFORNIA 90048-4920

FRANDZEL ROBINS BLOOM & CsaTo, L.C.
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“negotiations” that, if any, might have been communicated to counsel for Cathay Bank during the
period in which the events at issue in this case were occurring. The Bank’s assertion of privilege
seeks to protect the results of the efforts of counsel in the within litigation to prepare for the trial
of this case and, in particular, to defend against the two cross-complaints pending in this
proceeding, including the results of its interviews of witness, including third party witnesses.

Such information is subject to absolute protection as opinion work product, unless the witness
interviews are reduced to formal witness statements (and that has not occurred), in which case they
would nonetheless be subject to qualified work product protection. Coito v. Superior Court
(2012) 54 Cal. 4th 480.

With regards to Defendant's unhappiness as to the Plaintiff's objection to the term
"negotiation", “Negotiation” is defined in the Oxford English Dictionary as follows:

“a discussion or process of treaty with another (or others) aimed at reaching an

agreement about a particular issue, problem, etc., esp. in affairs of state; an instance

of negotiating. Freq. in pi.”

http://www.oed.com/view/Entry/125879?redirectedFrom=negotiations#eid. Thus, Defendants’
interrogatory seeks the contents of all discussions that were aimed at reaching an agreement about
the construction loan. Interpreted literally, it does not seek the content of discussions that pre-
dated the formation of the construction loan, because the construction loan was not then in
existence; but it does seek the content of every discussion that may have occurred after the
formation of the construction loan aimed at reaching an agreement about the construction Joan.
Those discussions occurred over a period of years, and presumably encompassed a multitude of
issues about the construction loan, from reallocating construction budget line items, to the six
various modification and extension agreements that are distinctly at issue in this action.

If the interrogatory is interpreted to include discussions that lead up to the formation of the
construction loan agreement, the burdensomeness of the interrogatory is even more manifest. The
response Defendants apparently expect is to have a recitation about the contents of every
discussion with the bank aimed at reaching any agreement with Cathay Bank about the

construction loan over a three+ year period, including not only the multitude of agreements that in
1093195.1 | 02300-0790 6
PLAINTIFF'S RESPONSE TO DEFENDANTS’ SEPARATE STATEMENT OF DISPUTED DISCOVERY
REQUESTS UNDER CRC 3.1345 IN SUPPORT OF MOTION TO COMPEL FURTHER RESPONSES TO
SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300) AND FOR SANCTIONS CCP §§2023.030,
2030.290(C))LOS ANGELES, CALIFORNIA 90048-4920
(323) 852-1000

FRANDZEL ROBINS BLOOM & CsarTo, L.C.
‘6500 WILSHIRE BOULEVARD, | 7TH FLOOR:

om Nn aA

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fact were reached, but also agreements that one side or the other may have hoped for, but not
achieved. The best evidence of the content of the negotiations is the agreements that, in fact,
were reached. If Defendants have specific negotiating sessions or issues at mind, it is their burden
to specifically inquire about the negotiations over those sessions or issues; but the interrogatory as
written is improper on its face.

SPECIAL INTERROGATORY NO. 5:

Identify all documents that refer to the extension that resulted in the CONSTRUCTION
LOAN'S modification on June 4, 2008, including, but not limited to, any review, analysis, or
report.

PLAINTIFF'S RESPONSE TO SPECIAL INTERROGATORY NO. 5:

Objection. this interrogatory is vague and ambiguous, including without limitation,
because of the term "extensions." The interrogatory is also vague, ambiguous and unintelligible,
including without limitation, because of the following phrase: "Construction Loan's extension that
resulted a loan modification". Subject to and without waiving said objections, and to the extent
the interrogatory refers to the first extension of the Construction Loan's maturity date
memorialized by the Extension of Maturity Date Agreement dated June 4, 2001, Cathay Bank
responses as follows: Extension of Maturity date Agreement dated June 4, 2008; Credit
Committee Memorandum. Discovery is ongoing.

REASONS WHY FURTHER RESPONSE SHOULD BE COMPELLED TO SPECIAL

INTERROGATORY NO. 5:

This interrogatory seeks the identification of all documents that refer to the extensions that
resulted in the CONSTRUCTION LOAN's modification of June 4, 2008. Plaintiff owes a duty to
respond in good faith as best it can. Deyo v. Kilbourne (1978) 84 Cal.App. 771, 783. Plaintiff's
objections are frivolous and must be overruled. The term "extensions" and phrase "extensions that
resulted in the Construction Loan's modification" are not vague, ambiguous or unintelligible as
Plaintiff and Plaintiffs counsel claims. The term Construction Loan is clearly defined in paragraph

1 of the Definitions Section of the Special Interrogatories.
1093195.1 | 02300-0790 71
PLAINTIFF'S RESPONSE TO DEFENDANTS’ SEPARATE STATEMENT OF DISPUTED DISCOVERY
REQUESTS UNDER CRC 3.1345 IN SUPPORT OF MOTION TO COMPEL FURTHER RESPONSES TO.
SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300) AND FOR SANCTIONS CCP §§2023.030,
2030.290(C))FRANDZEL ROBINS BLOOM & Csaro, L.C.
6500 WILSHIRE BOULEVARD, 1 77H FLOOR
LOS ANGELES, CALIFORNIA 90048-4920

(323) 852-1000

e ®

Further, Plaintiffs response to Form Interrogatory 15.1(a) recites facts of the construction
loan shows that Plaintiff is readily familiar with the circumstances of the multiple extensions and
their corresponding dates, including the extension referenced in this interrogatory, as Plaintiffs
answer includes the sentence, "[o]n June 4, 2008, the Borrower entered into an Extension
Agreement with Cathay Bank to extend the maturity date of the [Construction Loan Agreement]
("First Extension Agreement").

Plaintiff's counsel's statement in its meet and confer letter in response to this issue, "Wile
Bank is unaware of any extension of the Loan which resulted in a loan modification. The Bank did
agree to modify the construction loan on several occasions by granting extensions of the maturity
date of the construction loan, and those modifications were evidenced by written agreements,"
exposes the absurdity of this objection and failure to respond. Defendants have no duty to frame
interrogatories to Plaintiff's liking and these objections must be overruled.

This interrogatory seeks "all documents that refer to the extensions that resulted in the
CONSTRUCTION LOAN's modification on June 4, 2008, including, but not limited to, any
review, analysis, or report." Plaintiff's response of a June 4, 2008 Extension of Maturity date
Agreement a vague reference to some unidentifiable credit committee memorandum is a deficient
response to this interrogatory. Here, Plaintiff response indicates that it has not made a good faith
effort to identify all of the documents that refer to the subject extension, as requested. For
example, upon a preliminary review of the 7,500 pages of documents produced in response to
Defendants’ Request for Production of Documents, said documents include a draft of a June 4,
2008 Extension of Maturity Date Agreement (#000000304) which requires a different extension
fee than the signed June 4, 2008 Agreement (#000000300), and two Reaffirmations of Guaranty
(#0000003 13, #000000315) which reference a June 4, 2008 Extension of Maturity Date
Agreement. The documents also include fax cover sheets referencing an agreement related to the
subject extension. (#000000317, #0000003 19) The documents produced include countless emails
and multiple drafts of credit committee reports over the span of the relevant time period without

any categorization. Defendants find it difficult to believe that there are not many more documents

1093195.1 | 023000-0790 g
PLAINTIFF'S RESPONSE TO DEFENDANTS’ SEPARATE STATEMENT OF DISPUTED DISCOVERY
REQUESTS UNDER CRC 3.1345 IN SUPPORT OF MOTION TO COMPEL FURTHER RESPONSES TO
SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300) AND FOR SANCTIONS CCP §§2023.030,
2030.290(C))FRANDZEL ROBINS BLOOM & CsaTo, L.C.

6500 WILSHIRE BOULEVARD, | 77H FLOOR

LOS ANGELES, CALIFORNIA 60048-4920,

(323) 882-1000

Ce IN DN

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which reference the subject extension, including email correspondence and Cathay Bank's internal
notes which Defendants are entitled to have properly identified. Plaintiff's failure to provide such
information is evasive and a misuse of the discovery process under CCP §2023.010(f).

Plaintiff's response that "discovery is ongoing" is inappropriate after more than two years
of litigation. Plaintiff must provide an answer "as complete and straightforward as the has access
to all of these documents and its failure to properly identify the documents requested is evasive
and a misuse of the discovery process. C.C.P. §2030.010(f).

PLAINTIFF'S RESPONSE AND REASON WHY NO FURTHER RESPONSE IS

REQUIRED TO SPECIAL INTERROGATORY NO. 5:

The phrase “the extension that resulted in the CONSTRUCTION LOAN'S modification on

June 4, 2008” is vague and ambiguous because it assumes there was “an extension” that “resulted
in” a modification of the construction loan. In other words, it assumes two transactional events:
(1) an extension that (2) caused a modification. As far as Cathay Bank is aware, each extension or
modification agreement at issue in this action was not the result of an extension but was (together
with the other documents executed as part of the extension or modification transaction) itself the
operative agreement that effected the extension of the maturity date of the construction loan.

Plaintiff has produced every non-privileged document in the loan files it maintains in
connection with the loans at issue in this action. Defendants’ surprise that they’ve found no
document to support their factual contentions should be instructive to them. It is not grounds for a
motion to compel.

Contrary to the Obligors' allegations, Cathay Bank did adequately identify the documents,
and has provided all of them to the Obligors as part of its production. Since those documents are
now equally available to the Obligors, there is no legal authority that requires Cathay Bank to do
Obligors' review for them. All of the documents identified by Cathay Bank are available to the
Obligors, as Cathay Bank has produced all non-privileged, non-confidential documents in its
possession related to this case.

Defendants’ statement regarding Cathay Bank's ongoing discovery efforts is misguided.
1093195.1 | 023000-0790 9
PLAINTIFF'S RESPONSE TO DEFENDANTS' SEPARATE STATEMENT OF DISPUTED DISCOVERY
REQUESTS UNDER CRC 3.1345 IN SUPPORT OF MOTION TO COMPEL FURTHER RESPONSES TO
SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300) AND FOR SANCTIONS CCP §§2023.030,
2030.290(C))FRANDZEL ROBINS BLOOM & CsaTo, L.C.
6500 WILSHIRE BOULEVARD, | 77H FLOOR
LOS ANGELES, CALIFORNIA 90048-4920
(323) 852-1000

cm NIN DH PB WwW iN

10

Contrary to what they would have the Court believe, Plaintiff has not had two years to ascertain
certain information. In fact, the Defendant filed his third amended cross-complaint in January
2012 alleging an entirely new set of facts which had never been pled before. In addition, the
special interrogatories were served on or about July 3, 2012 and Cathay Bank served its response
on August 7, 2012. As Defendants are aware, there has been substantial additional discovery since
August 7, 2012. A responding party is not required to supplement its responses as discovery
continues, and information that is discovered after service of proper responses does not make the
initial response inadequate. “An interrogatory may not be made a continuing so as to impose on
the party responding to it a duty to supplement an answer that was initially correct and complete
with later acquire information.” California Code of Civil Procedure §2030.060(g). The Bank
reasonably responded to the best of its ability at the time the response was served.

SPECIAL INTERROGATORY NO. 6:

Identify the dates and content of the negotiations between YOU and KAI, including KAI's
members RAYMOND and CINDY, XIANG, ZHANGS, or any other person or entity regarding
the CONSTRUCTION LOAN 's extensions that resulted in a loan modification on June 4, 2008.
PLAINTIFF'S RESPONSE TO SPECIAL INTERROGATORY NO. 6:

Objection. This interrogatory is vague and ambiguous, including without limitation,
because of the term "negotiations". The interrogatory is also vague, ambiguous and unintelligible,
including without limitation, because of the following phrase: "Construction Loan's extension that
resulted a loan modification". Subject to and without waiving said objections, and to the extent the
interrogatory refers to the first extension of the Construction Loan's maturity date memorialized by
the Extension of Maturity Date Agreement dated June 4, 2008, Cathay Bank responds as follows:
the contents of Cathay Bank's discussions and communications with Kai and its members is
evidenced by the Extension of Maturity Date Agreement dated June 4, 2008.

REASONS WHY FURTHER RESPONSE SHOULD BE COMPELLED TO SPECIAL

INTERROGATORY NO, 6:

Plaintiffs objection that this interrogatory is vague, ambiguous and unintelligible because

1093195.1 | 02300-0790 10
PLAINTIFF'S RESPONSE TO DEFENDANTS' SEPARATE STATEMENT OF DISPUTED DISCOVERY
REQUESTS UNDER CRC 3.1345 IN SUPPORT OF MOTION TO COMPEL FURTHER RESPONSES TO.
SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300) AND FOR SANCTIONS CCP §§2023.030,
2030.290(C))(323) 852-1000

FRANOZEL RoBiNS BLOoM & CsATo, L.C.
6500 WILSHIRE BOULEVARD, | 77H FLOOR
LOS ANGELES, CALIFORNIA 90048-4920

e e

of the term "negotiations" and the phrase "construction Loan's extension that resulted a loan
modification" is meritless and should be overruled. The term "negotiations" is a common term and
in the context of this litigation, which involves multiple agreements, its meaning is clear and
Plaintiff's feigned inability to understand is in bad faith. If Plaintiff had any confusion with respect
to this term, its counsel could have contacted our office for clarification at any time.

With respect to the phrase "construction Loan's extension that resulted in a loan
modification," Construction Loan is clearly defined in paragraph | of the Definitions Section of
the Special Interrogatories. Further, Plaintiffs response to Form Interrogatory 15.1(a) recites facts
of the construction loan showing that Plaintiff is readily familiar with the circumstances of the
multiple extensions and their corresponding dates, including the extension referenced in this
interrogatory, as Plaintiff's answer includes the sentence, "[o]n June 4, 2008, the Borrower entered
into an Extension Agreement with Cathay Bank to extend the maturity date of the [Construction
Loan Agreement] ("First Extension Agreement").

Plaintiff's counsel's statement in its meet and confer letter in response to this issue, "[t]he
Bank is unaware of any extension of the Loan which resulted in a loan modification. The Bank did
agree to modify the construction loan on several occasions by granting extensions of the maturity
date of the construction loan, and those modifications were evidenced by written agreements,"
exposes the absurdity of this objection. Defendants have no duty to frame interrogatories to
Plaintiff's liking and these objections must be overruled.

Plaintiff's reference to the written agreements is a blatantly inadequate response to this
interrogatory. Such a response fails to provide the contents and dates of the negotiations as
requested. Plaintiff is well aware that the terms of such agreements are at issue in this case and a
failure to respond with the content of the discussions and communications prior to entering into
such agreements is in bad faith. Plaintiff's failure to provide such information is evasive and a

misuse of the discovery process under CCP §2023.010(f).

1093195.1 | 023000-0790 ui
PLAINTIFF'S RESPONSE TO DEFENDANTS' SEPARATE STATEMENT OF DISPUTED DISCOVERY
REQUESTS UNDER CRC 3.1345 IN SUPPORT OF MOTION TO COMPEL FURTHER RESPONSES TO
SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300) AND FOR SANCTIONS CCP §§2023.030,
2030.290(C))FRANDZEL ROBINS BLOOM & CsaTo, L.C.
‘6500 WILSHIRE BOULEVARD, | 7TH FLOOR
LOS ANGELES, CALIFORNIA GOO48-4920
(323) 852-1000

Cc em YN DA HW & wW HN

10

PLAINTIFF'S RESPONSE AND REASON WHY NO FURTHER RESPONSE IS

REQUIRED TO SPECIAL INTERROGATORY NO. 6:

The phrase “CONSTRUCTION LOAN'S extension that resulted in a loan modification on”

a date certain is vague and ambiguous because it assumes there was “an extension” that “resulted
in” a modification of the construction loan. In other words, it assumes two transactional events:
(1) an extension that (2) caused a modification. As far as Cathay Bank is aware, each extension or
modification agreement at issue in this action was not the result of an extension but was (together
with the other documents concurrently with the extension or modification agreement) itself the
operative agreement that effected the extension of the maturity date of the construction loan.

, Plaintiff has produced every non-privileged document in the loan files it maintains in
connection with the loans at issue in this action. Defendants’ surprise that they’ve found no
document to support their factual contentions should be instructive to them. It is not grounds for a
motion to compel.

Contrary to the Obligors' allegations, Cathay Bank did adequately identify the documents,
and has provided all of them to the Obligors as part of its production. Since those documents are
now equally available to the Obligors, there is no legal authority that requires Cathay Bank to do
Obligors' review for them. All of the documents identified by Cathay Bank are available to the
Obligors, as Cathay Bank has produced all non-privileged, non-confidential documents in its
possession related to this case.

Defendants' statement regarding Cathay Bank's ongoing discovery efforts is misguided.
Contrary to what they would have the Court believe, Plaintiff has not had two years to ascertain
certain information. In fact, the Defendant filed his third amended cross-complaint in January
2012 alleging an entirely new set of facts which had never been pled before. In addition, the
special interrogatories were served on or about July 3, 2012 and Cathay Bank served its response
on August 7, 2012. As Defendants are aware, there has been substantial additional discovery since
August 7, 2012. A responding party is not required to supplement its responses as discovery

continues, and information that is discovered after service of proper responses does not make the

1093195.1 | 023000-0790 12
PLAINTIFF'S RESPONSE TO DEFENDANTS' SEPARATE STATEMENT OF DISPUTED DISCOVERY
REQUESTS UNDER CRC 3.1345 IN SUPPORT OF MOTION TO COMPEL FURTHER RESPONSES TO
SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300) AND FOR SANCTIONS CCP §§2023.030,
2030.290(C))LOS ANGELES, CALIFORNIA 90048-4920
(323) 852-1000

FRANOZEL ROBINS BLOOM & CsaTo, L.C,
6500 WILSHIRE BOULEVARD, | 7TH FLOOR

initial response inadequate. “An interrogatory may not be made a continuing so as to impose on
the party responding to it a duty to supplement an answer that was initially correct and complete
with later acquire information.” California Code of Civil Procedure §2030.060(g). The Bank
reasonably responded to the best of its ability at the time the response was served.

SPECIAL INTERROGATORY NO. 8:

Identify all documents that refer to the extension that resulted in the CONSTRUCTION
LOAN's modification on September 12, 2008, including, but not limited to, any review, analysis,
or report.

PLAINTIFF'S ORIGINAL RESPONSE TO SPECIAL INTERROGATORY NO. 8:

Objection. The Bank objects to this interrogatory on the grounds that it is vague,
ambiguous and unintelligible. The Bank objects to this interrogatory to the extent it seeks
information protected by attorney client privilege and attorney work product doctrine. The Bank
further objects to this interrogatory on the grounds that the phrase "extension that resulted in the
Construction Loan's modification" is vague, ambiguous and unintelligible. Subject to and without
waiving said objections, and to the extent the interrogatory refers to documents in Cathay Bank's
possession which refer to the second extension of the Construction Loan's maturity date
memorialized by the Extension of Maturity Date Agreement dated September 12, 2008 Cathay
Bank responses as follows: Raymond Zhang, Nicholas Chung, Daniel Schorr.

PLAINTIFF'S AMENDED RESPONSE TO SPECIAL INTERROGATORY NO. 8:

Objection. The Bank objects to this interrogatory on the grounds that it is vague,
ambiguous and unintelligible. The Bank objects to this interrogatory to the extent it seeks
information protected by attorney client privilege and attorney work product doctrine. The Bank
further objects to this interrogatory on the grounds that the phrase "extension that resulted in the
Construct Loan's modification" is vague, ambiguous and unintelligible. Subject to and without
waiving said objections, and to the extent the interrogatory refers to documents in Cathay Bank's
possession which refer to the second extension of the Construction Loan's maturity date

memorialized by the Extension of Maturity Date Agreement dated September 12, 2008, Cathay
1093195.1 | 02300-0790 B.

PLAINTIFF'S RESPONSE TO DEFENDANTS’ SEPARATE STATEMENT OF DISPUTED DISCOVERY

REQUESTS UNDER CRC 3.1345 IN SUPPORT OF MOTION TO COMPEL FURTHER RESPONSES TO

SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300) AND FOR SANCTIONS CCP §§2023.030,
2030.290(C))Los ANGELES, CALIFORNIA 80048-4920
(323) 882-1000

FRANDZEL ROBINS BLOOM & CsaTo, L.C.
500 WILSHIRE BOULEVARD, | 77H FLOOR

oC UD ON DH RB WN

Bank responses as follows: Credit committee memorandum regarding September 12, 2008
extension of maturity date agreement, Extension of Maturity Date Agreement dated September 12,
2008.

REASONS WHY FURTHER RESPONSE SHOULD BE COMPELLED TO SPECIAL

INTERROGATORY NO. 8:

This interrogatory seeks the identification of all documents that refer to the extensions that
resulted in the CONSTRUCTION LOAN 's modification of September 12, 2008. Plaintiff owes a
duty to respond in good faith as best it can. Deyo v. Kilbourne (1978) 84 Cal-App. 771, 783.
Plaintiff's objections are frivolous and must be overruled. The phrase "extensions that resulted in
the Construction Loan's modification" is not vague, ambiguous or unintelligible as Plaintiff and
Plaintiffs counsel claims. The term Construction Loan is clearly defined in paragraph 1 of the
Definitions Section of the Special Interrogatories. Further, Plaintiff's response to Form
Interrogatory 15.1(a) recites facts of the construction loan shows that Plaintiff is readily familiar
with the circumstances of the multiple extension and their corresponding dates, including the
extension referenced in this interrogatory, as Plaintiff's answer includes the sentence "[t]he Second
Extension provided that as of the date of the agreement (September 12, 2008) the outstanding
principal balance was $4,323,336,79."

Plaintiff's counsel's statement in its meet and confer letter in response to this issue,
“[t]he Bank is unaware of any extension of the Loan which resulted in a loan modification. The
Bank did agree to modify the construction loan on several occasions by granting extensions of the
maturity date of the construction loan, and those modifications were evidenced by written
agreements," exposes the absurdity of this objection and failure to respond. Defendants have no
duty to frame interrogatories to Plaintiff's liking and Plaintiff is in no way excused from providing
a good faith response. Plaintiff is well aware of the meaning of this interrogatory and must provide
a good faith response. Plaintiff's objections that these interrogatories seek information protected
by attorney client privilege and work product doctrine are also meritless. Attorney client privilege

attaches to communications between an attorney and its client and the work product doctrine
1093195.1 | 02300-0790 4

1
PLAINTIFF'S RESPONSE TO DEFENDANTS’ SEPARATE STATEMENT OF DISPUTED DISCOVERY
REQUESTS UNDER CRC 3.1345 IN SUPPORT OF MOTION TO COMPEL FURTHER RESPONSES TO
SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300) AND FOR SANCTIONS CCP §§2023.030,
2030.290(C))FRANDZEL ROBINS BLOOM & CsaTo, L.C.
6500 WILSHIRE BOULEVARD, | 77H FLooR
LOS ANGELES, CALIFORNIA SOO48-4920

(323) 852-1000

Cc Oe YN DA WH RF WwW NY

o

11

protects the work product of attorneys. Cal. Evid. Code § 954; CCP § 2018.030. The act of
relaying facts to counsel does not make such information privileged. "[T]he attorney-client
privilege only protects disclosure of communications between the attorney and the client; it does
not protect disclosure of underlying facts which may be referenced within a qualifying
communication." State Farm Fire & Casualty Co. v. Superior Court (1997) 54 Cal.App.4th 625,
639.This interrogatory merely seeks documents created in anticipation of an extension prior to
litigation and in anticipation of an agreement between Plaintiff and Defendants.

Plaintiffs reference to an Extension of Maturity Date Agreement dated September 12,
2008 and a credit committee report memorandum is a deficient response. Here, Plaintiff response
indicates that it has not made a good faith effort to identify all of the documents that refer to the
subject extension, as requested. For example, upon a preliminary review of the 7,500 pages of
documents produced in response to Defendants' Request for Production of Documents, said
documents include at least two drafis of Credit Committee Reports relating to the subject
extension (#000000428, #0000000442), and a Transmittal Summary related to the subject
extension dated September 11, 2008. (4000000728) The documents also include an email over the
span of the relevant time period without any categorization. Defendants find it difficult to believe
that there are not many more documents which reference the subject extension, including email
correspondence and Cathay Bank's internal notes which Defendants are entitled to have properly
identified. Thus, Plaintiff's failure to properly identify the documents as requested is evasive and a
misuse of the discovery process. C.C.P. §2030.010(f).
PLAINTIFF'S RESPONSE AND REASON WHY NO FURTHER RESPONSE IS

REQUIRED TO SPECIAL INTERROGATORY NO. 8:

The phrase “the extension that resulted in the CONSTRUCTION LOAN'S modification

on” a date certain is vague and ambiguous because it assumes there was “an extension” that
“resulted in” a modification of the construction loan. In other words, it assumes two transactional
events: (1) an extension that (2) caused a modification. As far as Cathay Bank is aware, each

extension or modification agreement at issue in this action was not the result of an extension but

1093195.1 | 023000-0790 15
PLAINTIFF'S RESPONSE TO DEFENDANTS’ SEPARATE STATEMENT OF DISPUTED DISCOVERY
REQUESTS UNDER CRC 3.1345 IN SUPPORT OF MOTION TO COMPEL FURTHER RESPONSES TO.
SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300) AND FOR SANCTIONS CCP §§2023.030,
2030.290(C))LOS ANGELES, CALIFORNIA @0048-4920
(323) 852-1000

FRANOZEL ROBINS BLOom & CsaTo, L.C,
6500 WILSHIRE BouLevarD, | 7TH FLOOR

was (together with the other documents concurrently with the extension or modification
agreement) itself the operative agreement that effected the extension of the maturity date of the
construction loan.

Plaintiff has produced every non-privileged document in the Joan files it maintains in
connection with the loans at issue in this action. Defendants’ surprise that they’ve found no
document to support their factual contentions should be instructive to them. It is not grounds for a
motion to compel.

Contrary to the Obligors' allegations, Cathay Bank did adequately identify the documents,
and has provided all of them to the Obligors as part of its production. Since those documents are
now equally available to the Obligors, there is no legal authority that requires Cathay Bank to do
Obligors' review for them. All of the documents identified by Cathay Bank are available to the
Obligors, as Cathay Bank has produced all non-privileged, non-confidential documents in its
possession related to this case.

Defendants’ statement regarding Cathay Bank's ongoing discovery efforts is misguided.
Contrary to what they would have the Court believe, Plaintiff has not had two years to ascertain
certain information. In fact, the Defendant filed his third amended cross-complaint in January
2012 alleging an entirely new set of facts which had never been pled before. In addition, the
special interrogatories were served on or about July 3, 2012 and Cathay Bank served its response
on August 7, 2012. As Defendants are aware, there has been substantial additional discovery since
August 7, 2012. A responding party is not required to supplement its responses as discovery
continues, and information that is discovered after service of proper responses does not make the
initial response inadequate. “An interrogatory may not be made a continuing so as to impose on
the party responding to it a duty to supplement an answer that was initially correct and complete
with later acquire information.” California Code of Civil Procedure §2030.060(g). The Bank
reasonably responded to the best of its ability at the time the response was served.

SPECIAL INTERROGATORY NO. 9:

Identify the dates and content of the negotiations between YOU and KAI, including KAI's

1093195.1 | 02300-0790 16
PLAINTIFF'S RESPONSE TO DEFENDANTS' SEPARATE STATEMENT OF DISPUTED DISCOVERY
REQUESTS UNDER CRC 3.1345 IN SUPPORT OF MOTION TO COMPEL FURTHER RESPONSES TO

SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300) AND FOR SANCTIONS CCP §§2023.030,
2030.290(C))FRANDZEL ROBINS BLOom & CsaTo, L.C.
S00 WitsHiRe BOULEVARD, | 7TH FLOOR
LOS ANGELES, CALIFORNIA 90048-4920

(323) 852-1000

Co em YN DH HW PB Ww NY

S

11

members RAYMOND and CINDY XIANG, ZHANGS, or any other person or entity regarding
the CONSTRUCTION LOAN ' s extensions that resulted in a loan modification on September 12,
2008.
PLAINTIFF'S RESPONSE TO SPECIAL INTERROGATORY NO. 9:

Objection. This interrogatory is vague, ambiguous, overbroad and unduly burdensome.
The Bank objects to this interrogatory on the grounds that the term "negotiations" is vague and
ambiguous. The Bank objects to this interrogatory on the grounds that it seeks information
protected by the attorney-client privilege and the attorney work-product doctrine. The Bank also
objects on the grounds that the term "loan modification" is vague and ambiguous. The Bank
further objects on the grounds that the term "Construction Loan's extensions” is vague and
ambiguous. The Bank further objections [sic] on the grounds that the phrase "extension that
resulted in a loan modification" is vague, ambiguous and unintelligible. Subject to and without
waiving said objections, and to the extent the interrogatory refers to persons at Cathay Bank who
communicated with Kai and its representatives regarding the third extension of the Construction
Loan's maturity date memorialized by the Extension of Maturity Date Agreement dated September
12, 2008 Cathay Bank responds as follows: The Bank communicated with Kai and its members
regarding their request to further extend the maturity date of the construction loan following Kai's
July 1, 2008 default pursuant to the Construction Loan, Promissory Note, and Extension of
Maturity Date Agreement dated June 4, 2008 until an agreement was reached and memorialized
on or about September 12, 2008. The contents of the communications between Cathay Bank and
Kai, including its members, are memorialized in the Extension of Maturity Date Agreement date
[sic] September 12, 2008.
REASONS WHY FURTHER RESPONSE SHOULD BE COMPELLED TO SPECIAL

INTERROGATORY NO. 9:
Plaintiff's objections that this interrogatory is vague, ambiguous, overbroad and unduly
burdensome are meritless and should be overruled. To the extent Plaintiff objects that this

interrogatory is unduly burdensome and oppressive, such objections are valid only if the burden is

1093195.1 | 023000-0790 17
PLAINTIFF'S RESPONSE TO DEFENDANTS' SEPARATE STATEMENT OF DISPUTED DISCOVERY
REQUESTS UNDER CRC 3.1345 IN SUPPORT OF MOTION TO COMPEL FURTHER RESPONSES TO.
SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300) AND FOR SANCTIONS CCP §§2023.030,
2030.290(C))FRANDZEL ROBINS BLOOM & CsaTo, L.C.
S500 WILSHIRE BOULEVARD, | 7TH FLOOR
LOS ANGELES, CALIFORNIA 90048-4920
(323) 852-1000

w

demonstrated to result in injustice. See West Pico Furniture Co. v. Superior Court (1961) 56
Cal.2d 407, 418. Plaintiff has not asserted, or made any attempt to show, any injustice here and
these objections should be overruled. Plaintiff's assertion that the terms "negotiations," "loan
modification," and "Construction Loan's extensions" are vague and ambiguous are frivolous.
These words have common meanings and such phrases are entirely appropriate and easily
understandable in the context of this matter, which, as Plaintiff is well-aware, involves a
construction loan agreement, the maturity date of which was extended multiple times which
necessarily involved prior communication between the parties. As shown above, Plaintiff is
familiar with this particular extension. Plaintiff's feigned inability to understand these terms
constitutes bad faith and these objections should be overruled.

Plaintiff's objections that this interrogatory seeks information protected by attorney-client
privilege or the work-product doctrine are also without merit and should also be overruled.
Attorney client privilege attaches to communications between an attorney and its client and the
work product doctrine protects materials prepared in anticipation of litigation. This interrogatory
seeks information regarding the content of negotiations that took place between Cathay Bank and
Defendants, which would destroy any claim to privilege, prior to litigation and in anticipation of
an agreement between Plaintiff and Defendants.

Plaintiff's response to this interrogatory by stating that communications did take place and
then referring to the written agreements as memorializing the content of such communications is
blatantly inadequate. Such a response fails to provide the contents and dates of the negotiations
themselves as requested. Plaintiff is well aware that the terms of such agreements are at issue in
this case and a failure to respond with the content of the discussions and communications prior to
entering into such agreements is in bad faith. Plaintiff's failure to provide such information is

evasive and a misuse of the discovery process under CCP §2023.010(f).

PLAINTIFF'S RESPONSE AND REASON WHY NO FURTHER RESPONSE IS
REQUIRED TO SPECIAL INTERROGATORY NO. 9:

Whatever the meaning of “negotiations” might be in standard usage, Defendants appear to
1093195.1 | 23000-0790

18
PLAINTIFF'S RESPONSE TO DEFENDANTS' SEPARATE STATEMENT OF DISPUTED DISCOVERY
REQUESTS UNDER CRC 3.1345 IN SUPPORT OF MOTION TO COMPEL FURTHER RESPONSES TO
SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300) AND FOR SANCTIONS CCP §§2023.030,
2030.290(C))FRANDZEL ROBINS BLOOM & Csato, L.C.
6500 WILSHIRE BOULEVARD, | 7TH FLOOR
LOS ANGELES, CALIFORNIA 80048-4920

(323) 852-1000

co ew YN DH BF WW

10

interpret it to comprise discussions with third parties aimed at reaching an agreement to modify an
agreement to which the third party is a stranger. As such, the interrogatory is vague, ambiguous
and/or unintelligible. The interrogatory is overbroad and unduly burdensome because the only
evidence of the subject negotiations available at this stage of discovery is the evidence apparent
from the face of the loan file documents already made available to Defendants; and Defendants are
as capable of discerning what those documents reveal as is Plaintiff. Finally, Plaintiff responded
by asserting, as appears to be borne out by the loan file documents, that the only evidence of the
negotiations of the parties presently known to Cathay Bank are the final terms embodied in the
formal extension or modification agreements executed by the parties. Other evidence of the
contents of the negotiations may be developed as depositions of the former bank employees who
were primarily responsible for all negotiations regarding the loans at issue in this action.
Defendants has deposed one such witness already in connection with early case preliminary
injunction proceedings. He is scheduled for another deposition and the other knowledgeable
former employee is likewise scheduled for a deposition, both noticed by the Defendants to be
conducted in the next two weeks.

SPECIAL INTERROGATORY NO. 11:

Identify all documents that refer to the extensions that resulted in the CONSTRUCTION
LOAN's modification on December 18, 2008, including, but not limited