Preview
1 TROUTMAN SANDERS LLP
Marcus T. Hall, Bar No. 206495 E-FILED
2 marcus.hall@troutman.com 12/7/2018 11:37 PM
Dean A. Morehous, Bar No. 111841 FRESNO COUNTY SUPERIOR COURT
3 dean.morehous@troutman.com By: M. Sanchez, Deputy
Craig Crockett, Bar No. 265161
4 craig.crockett@troutman.com
Ryan Lewis, Bar No. 307253
5 ryan.lewis@troutman.com
580 California Street, Suite 1100
6 San Francisco, CA 94104
Telephone: 415.477.5700
7 Facsimile: 415.477.5710
8 Attorneys for Plaintiff
CALIFORNIA FARM MANAGEMENT, INC.
9
10 SUPERIOR COURT OF THE STATE OF CALIFORNIA
11 COUNTY OF FRESNO
TROUTMAN SANDERS LLP
12
13 In Re CALIFORNIA FARM Case No. 17JCCP04915
MANAGEMENT CASES
14 This document relates to Fresno Superior Court
This document relates to: Case Nos. 16CECG03722, 17CECG03058,
15 1 7CECGO3059, 1 7CECGO3318, 1 7CECGO3555,
California Farm Management, Inc. v. All 17CECG03882, 17CECG03922, 17CECG03950,
16 Ag, Inc. et al., No. 16CECG03722, 18CECG00431
17 California Farm Management, Inc. v. PLAINTIFF'S EVIDENTIARY
Maravilla et al., No. 17CECG03058 OBJECTIONS TO DEFENDANTS'
18 DECLARATIONS IN OPPOSITION TO
California Farm Management, Inc. v. PLAINTIFF'S MOTION FOR SUMMARY
19 Precision Hay Company, et al., No. JUDGMENT OR, IN THE ALTERNATIVE,
17CECG03059 SUMMARY ADJUDICATION
20
California Farm Management, Inc. v. Date: December 13, 2018
21 Marcos Renteria Ag Services, Inc. et al., No. Time: 3:30 p.m.
17CECG03318 Dept: 502
22 Judge: Hon. Donald S. Black
California Farm Management, Inc. v.
23 Anderson's Tree Care Specialist, Inc. et al.,
No. 17CECG03555
24
California Farm Management, Inc. v. Soto
25 et al., No. 17CECG03882
26 California Farm Management, Inc. v.
Tapestry Vineyards, Inc. et al., No.
27 17CECG03922
28
CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ
1
California Farm Management, Inc. v.
2 Madrigal et al., No. 17CECG03950
3 California Farm Management, Inc. v.
Colligere Farm Management Company et
4 al., No. 18CECG00431
5
6 Plaintiff California Farm Management, Inc. ("CFM") hereby submits its Evidentiary
7 Objections to the Declarations of Kim Piersol and Veronica Darling in connection with
8 Defendants' Opposition to CFM's Motion for Summary Judgment or, in the Alternative,
9 Summary Adjudication:
10 I. OBJECTIONS TO KIM PIERSOL DECLARATION
11 Objection Number 1
TROUTMAN SANDERS LLP
12 (Piersol Declaration, Paragraph 5)
13 "Based on my review of CFM's actuarial reports and audited financial statements, as well as
14 industry-wide data for administration of self-insurance groups such as CFM, I have concluded
15 that CFM's alleged deficit (also referred to as the Group Net (Loss)) is overstated by $9,548,118
16 or more. My analysis is preliminary and does not include discounts to the overall alleged deficits
17 that would be attributable to claims mishandling and potentially other areas of claimed expense
18 by CFM. My calculations are reflected in the documents I created, attached hereto as Exhibit B.
19 The fields in light blue reflect numbers generated by CFM's actuary — CACI, and the fields in
20 dark blue reflect my indicated changes to the assessment analysis when I applied by actuarial
21 analysis based upon the data and information produced by CFM and CACI. Besides an overall
22 calculation, there is a sheet for each individual defendant, and the group totals are represented in
23 the right far right column. My conclusion that the alleged deficit is overstated is discussed
24 below."
25 Grounds for Objection 1: Lacks foundation. Cal. Evid. Code §§ 702, 800. Statements are
26 improper expert testimony in that methodology underlying "overstated" deficit is not disclosed in
27 testimony or attachments. Improper expert testimony. Evid. Code §§ 800-801_ 803.
28
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CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ
1
Court's Ruling On Objection 1: Sustained:
2
Overruled:
3
4
5
Objection Number 2
6
(Piersol Declaration, Paragraph 7)
7
"In the 2017 year end actuarial report, CACI has reduced its own projections for the assessment
8
years 2005 through 2015, resulting in a substantial reduction in the alleged deficit from 2015 to
9
2017 of $3,332,212. This means that, were the assessments of these Defendants calculated today
10
using CACI's 2017 Actuarial Reserve Analysis, CFM's own overall projected 'deficit' number
11
would be $3,332,212 lower than it was when CFM issued the assessments in 2016. This number
12
is reflected in the field of Exhibit B entitled "CACI Discounted Ultimate Loss Development
13
TROUTMAN S
12/15 through 12/17."
14
Grounds for Objection 2: Relevance. Evid. Code § 350. Not relevant to the subject matter of
15
CFM's motion, as CFM's deficit and assessment was predicated on the actuarial analysis as of
16
December 31, 2015, as provided to Travis Harper on April 6, 2016, and any later actuarial
17
forecast or related testimony completed after the assessment was issued is irrelevant to the deficit
18
and assessment at issue.
19
Court's Ruling On Objection 2: Sustained:
20
Overruled:
21
22
23
Objection Number 3
24
(Piersol Declaration, Paragraph 8)
25
"Applying actuarial standards of practice and principles to the data received from CFM and CACI
26
to CFM's financial and actuarial reports through year end 2017, I have concluded that CACI has
27
significantly overestimated their deficits for the assessment years 2005 through 2015 by
28
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CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ
1 $3,518,979. When taken together, the reduction in the alleged deficit reflected in CFM's own
2 analysis, as well as the application of my best estimate totals $6,851,191. This number is
3 reflected in the field of Exhibit B entitled "December 31, 2018 Huggins Discounted Reserve
4 Adjustment."
5 Grounds for Objection 3: Relevance. Evid. Code § 350. Not relevant to the subject matter of
6 CFM's motion, as CFM's deficit and assessment was predicated on the actuarial analysis as of
7 December 31, 2015, as provided to Travis Harper on April 6, 2016, and any later actuarial
8 forecast or related testimony completed after the assessment was issued, including CACI's 2017
9 Actuarial Reserve Analysis, is irrelevant to the deficit and assessment at issue. Lacks foundation.
10 Cal. Evid. Code §§ 702, 800. Statements are improper expert testimony in that methodology
11 underlying "overestimated" deficit is not disclosed in testimony or attachments. Improper expert
12 testimony. Evid. Code §§ 800-801, 803.
13 Court's Ruling On Objection 3: Sustained:
14 Overruled:
15
16
17 Objection Number 4
18 (Piersol Declaration, Paragraph 9)
19 "Defendants are not responsible for each of these years they were not a member. Nevertheless,
20 using CFM's own numbers taken directly from documents produced by CFM in this matter and
21 including a 10% surcharge that CFM's documents refer to as a 'shield' discussed above, when the
22 offsets or overcharges set forth above are added up, the total is $9,548,118 that CFM seeks over
23 what it needs according to my actuarial analysis. When this number is applied to CFM's
24 projected paper deficit, CFM's overall Group Net (Loss), the remaining alleged deficit is
25 significantly less than CFM projected."
26 Grounds for Objection 4: Relevance. Evid. Code § 350. Not relevant to the subject matter of
27 CFM's motion, as CFM's deficit and assessment was predicated on the actuarial analysis as of
28
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CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ
1 December 31, 2015, as provided to Travis Harper on April 6, 2016, and any later actuarial
2 forecast or related testimony completed after the assessment was issued is irrelevant to the deficit
3 and assessment at issue. Lacks foundation. Cal. Evid. Code §§ 702, 800. Statements are
4 improper expert testimony in that methodology underlying "overestimated" deficit is not
5 disclosed in testimony or attachments. Improper expert testimony. Evid. Code §§ 800-801, 803.
6 Court's Ruling On Objection 4: Sustained:
7 Overruled:
8
9
10 Objection Number 5
11 (Piersol Declaration, Paragraph 10)
TROUTMAN SANDERS LLP
12 "It is important to note that CACI's projected losses for the assessment years 2005-2015 have
13 been decreasing over the past few yews. so CFM's paper deficit may decrease even more by the
14 time the 2018 financials are completed and analyzed — even using CACI's assumptions and
15 methodologies.
16 Grounds for Objection 5: Relevance. Evid. Code § 350. Not relevant to the subject matter of
17 CFM's motion, as CFM's deficit and assessment was predicated on the actuarial analysis as of
18 December 31, 2015, as provided to Travis Harper on April 6, 2016, and any later actuarial
19 forecast or related testimony completed after the assessment was issued is In-L.:levant to the deficit
20 and assessment at issue. Lacks foundation, speculative Cal. Evid. Code §§ 702, 800. Declarant
21 speculates that "CFM's paper deficit may" decrease, and provides no foundation. Improper expert
22 testimony. Evid. Code §§ 800-801, 803.
23 Court's Ruling On Objection 5: Sustained:
24 Overruled:
25
26
27
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CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ
1 II. OBJECTIONS TO VERONICA DARLING DECLARATION
2
Objection Number 1
3
4 (Darling Declaration, Paragraph 3, ins. 3-27)
5 "CFM has not been consistent in its calculated Group Net (Loss) numbers and used different
6 Group Net (Loss) numbers in its calculations and demands for payment from various defendants.
7 For example, the Group Net (Loss) numbers used by CFM for All Ag, Inc., Colligere Farm
8 Management, Inc., and Augustin Madrigal (El Dorado) are approximately 10% lower than the
9 Group Net (Loss) numbers for the remaining defendants. Additionally, active members of CFM
10 are not assessed for Group Net (Loss) through the 2014 and 2015 program years; only inactive
11 (i.e., former) members of CFM have been issued assessments for those years."
12 Grounds for Objection 1: Lacks foundation. Cal. Evid. Code §§ 702, 800. Declarant does not
13 identify the "various defendants" referred to, nor does declarant provide foundation for the
14 statements regarding CFM's assessment of active or inactive members.
15 Court's Ruling On Objection 1: Sustained:
16 Overruled:
17
18
19 Objection Number 2
20 (Darling Declaration, Paragraph 4 and Exhibit 11)
21 "A true and correct copy of Plaintiff's 2017 Program Year Actuarial Reserve Report, Bates Nos.
22 CFM 013565-13636 is attached hereto as Exhibit 11."
23 Grounds for Objection 2: Relevance. Evid. Code § 350. not relevant to the subject matter of
24 CFM's motion, as CFM's deficit and assessment was predicated on the actuarial analysis as of
25 December 31, 2015, as provided to Travis Harper on April 6, 2016, and any later actuarial
26 forecast or related testimony completed after the assessment was issued is irrelevant to the deficit
27 and assessment at issue.
28
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CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ
1
Court's Ruling On Objection 2: Sustained:
2
Overruled:
3
4
5
Objection Number 3
6
(Darling Declaration, Paragraph 5, lns. 15-19, Exhibit 12)
7
"Mr. Harper testified that CFM's current operating expenses make up approximately 40 percent
8
of CFM's total expenses. Additionally, Mr. Harper testified that CFM has never been at risk of
9
being unable to pay a workers' compensation claim. Attached hereto as Exhibit 12 is a true and
10
correct copy of the relevant excerpts of Mr. Harper's deposition, in conformance with California
11
Rule of Court 3.1116."
12
Grounds for Objection 3: Relevance. Evid. Code § 350. Not relevant to the subject matter of
13
CFM's motion, as CFM's deficit and assessment was predicated on the actuarial analysis as of
14
December 31, 2015, as provided to Travis Harper on April 6, 2016, and any later actuarial
15
forecast or related testimony completed after the assessment was issued is irrelevant to the deficit
16
and assessment at issue. CFM's ability to pay claims is not relevant to the existence of CFM's
17
deficit or its assessment.
18
Court's Ruling On Objection 3: Sustained:
19
Overruled:
20
21
22 Objection Number 4
23 (Darling Declaration, Paragraph 6, lns. 21-27 and Exhibit 13)
24 "During his deposition, Mr. Johnson testified that CFM's "deficit" is "a paper deficit because it's
25 not money that is actually owed now." Mr. Johnson distinguished CFM's paper deficit from an
26 actual deficit in which CFM was without money to pay claims. Mr. Johnson was adamant that
27 CFM's deficit is paper only, and that no workers' compensation claim has ever been at risk of
28 going unpaid for lack of funds. Attached hereto as Exhibit 13 is a true and correct copy of the
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CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ
1 relevant excerpts of Mr. Johnson's deposition, in conformance with California Rule of Court
2 3.1116."
3 Grounds for Objection 4: Irrelevant and Prejudicial. Evid. Code §§ 350, 352. Not relevant to
4 the subject matter of CFM's motion. CFM's ability to pay claims is not relevant to the existence
5 of CFM's deficit or its assessment. Distinction between "paper" and "actual" deficit irrelevant
6 and misleading; CFM's "paper" deficit sufficient cause to issue assessment.
7 Court's Ruling On Objection 4: Sustained:
8 Overruled:
9
10
11 Objection Number 5
TROUTMAN SANDERS LLP
12 (Darling Declaration, Paragraph 7)
13 "CFM's UMF No. 12 states that the assessment was approved by OSIP as an element of the
14 August 2012 Corrective Action Plan. This "fact" is misleading, as the earliest that OSIP was
15 notified of CFM's intent to impose an assessment plan was August 2016, according to CFM's
16 own documents. CFM's attempt to imply that the assessment was approved in 2012, or that the
17 issuance of a 2016 assessment was approved in 2012, is patently false. A true and correct copy of
18 correspondence from David Johnson to OSIP dated August 31, 2016 is attached hereto as Exhibit
19 14, Bates No. CFM 0017562."
20 Grounds for Objection 5: Statements lacking foundation and personal knowledge, speculation.
21 Evid. Code §§ 403, 702. Counsel provides no foundation for personal knowledge. Misleading
22 and Argumentative. Cheviot Vista Homeowners Ass'n v. State Farm Fire & Cas. Co., 143 Cal.
23 App. 4th 1486 (2006) (Counsel's unsupported testimony and statements made in his declaration
24 are insufficient to create a triable issue of material fact.) Counsel misstates the content of CFM's
25 UMF No. 12, which states that the assessment was approved by CADIR "as an element of
26 CFM's CAP.
27
28
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CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ
1
Court's Ruling On Objection 5: Sustained:
2
Overruled:
3
4 Objection Number 6
5 (Darling Declaration, Paragraph 8)
6 "Additionally, contrary to CFM's representations to this Court, CFM has never provided any
7 evidence that OSIP is aware CFM has not assessed current members for program year 2014 and
8 2015. Rather, CFM has only described the assessment plan in general terms to OSIP — never
9 distinguishing the treatment between current and former members. A true and correct copy of
10 David Johnson's February 28, 2017 correspondence with OSIP is attached hereto as Exhibit 15,
11 Bates No. CFM 009270."
12 Grounds for Objection 6: Relevance. Evid. Code § 350. Statement not relevant to the subject
13 matter of CFM's motion, which deals with an assessment against former members. Statements
14 lacking foundation and personal knowledge, speculation. Evid. Code §§ 403, 702. Counsel
15 provides no foundation for personal knowledge. Misleading and Argumentative. Cheviot Vista
16 Homeowners Ass'n v. State Farm Fire & Cas. Co., 143 Cal. App. 4th 1486 (2006) (Counsel's
17 unsupported testimony and statements made in his declaration are insufficient to create a triable
18 issue of material fact.)
19 Court's Ruling On Objection 6: Sustained:
20 Overruled:
21
22
23 Objection Number 7
24 (Darling Declaration, Paragraph 9)
25 "On October 29, 2018, I appeared in Salinas, California and took the deposition of Tammy
26 Nunez, a current member of the CFM' Board of Trustees. During that deposition, Ms. Nunez
27 authenticated the documents attached hereto as Exhibit 16 (Bates No. Nunez000001-000005. In
28 Exhibit 16, another Board member, Denise Fiorini, forwards Ms. Nunez emails from 2009, in
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CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ
1 which the principal of CFM's Group Administrator began covering up its' various paper deficits,
2 by switching actuaries because the Group Administrator felt the initial actuarial report for 2009
3 overstated losses. Attached hereto as Exhibit 17 is a true and correct copy of the relevant excerpts
4 of Ms. Nunez's deposition, in conformance with California Rule of Court 3.1116."
5 Grounds for Objection 7:
6 Lack of Authentication. Cal. Evid. Code § 1400-1401. The excerpt of testimony attached as
7 Exhibit 17 to the Darling Declaration does not properly authenticate the email attached as Exhibit
8 16. Ms. Nunez merely testified that her recollection was refreshed regarding a different
9 discussion. (Darling Dec., Ex. 17, at p. 133, lns. 21-24). Hearsay. Cal. Evid. Code § 1200.
10 Exhibit 16 is also offered for the truth of the matter asserted by the attorney declarant, i.e., Ms.
11 Darling's assertion that CFM was engaged in a "cover-up" of its deficit in 2009. As such, Exhibit
TROUTMAN SANDERS LLP
12 16 is therefore inadmissible hearsay.
13 Court's Ruling On Objection 7: Sustained:
14 Overruled:
15
16
17 Objection Number 8
18 (Darling Declaration, Exhibit 16, Bates-stamped NUNEZ000003-04, at June 3, 2009 email from
19 Travis Harper)
20 Grounds for Objection 8:
21 Lack of Authentication. Cal. Evid. Code § 1400-1401. The excerpt of testimony attached as
22 Exhibit 17 to the Darling Declaration does not properly authenticate the email attached as Exhibit
23 16. Ms. Nunez merely testified that her recollection was refreshed regarding a different
24 discussion. (Darling Dec., Ex. 17, at p. 133, lns. 21-24). Hearsay. Cal Evid. Code § 1200.
25 Exhibit 16 is also offered for the truth of the matter asserted by the attorney declarant, i.e., Ms.
26 Darling's assertion that CFM was engaged in a "cover-up" of its deficit in 2009. As such, Exhibit
27 16 is inadmissible hearsay.
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CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ
1
Court's Ruling On Objection 8: Sustained:
2
Overruled:
3
4
5
Dated: December 7, 2018 TROUTMAN SA LPG S LLP
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7
By:
8 Marcus T. al
Dean A. Morehous
9 Craig Crockett
Ryan A. Lewis
10 Attorneys for Plaintiff
CALIFORNIA FARM MANAGEMENT, INC.
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TROUTMAN SANDERS LLP
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CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ
Preview
1 TROUTMAN SANDERS LLP Marcus T. Hall, Bar No. 206495 E-FILED 2 marcus.hall@troutman.com 12/7/2018 11:37 PM Dean A. Morehous, Bar No. 111841 FRESNO COUNTY SUPERIOR COURT 3 dean.morehous@troutman.com By: M. Sanchez, Deputy Craig Crockett, Bar No. 265161 4 craig.crockett@troutman.com Ryan Lewis, Bar No. 307253 5 ryan.lewis@troutman.com 580 California Street, Suite 1100 6 San Francisco, CA 94104 Telephone: 415.477.5700 7 Facsimile: 415.477.5710 8 Attorneys for Plaintiff CALIFORNIA FARM MANAGEMENT, INC. 9 10 SUPERIOR COURT OF THE STATE OF CALIFORNIA 11 COUNTY OF FRESNO TROUTMAN SANDERS LLP 12 13 In Re CALIFORNIA FARM Case No. 17JCCP04915 MANAGEMENT CASES 14 This document relates to Fresno Superior Court This document relates to: Case Nos. 16CECG03722, 17CECG03058, 15 1 7CECGO3059, 1 7CECGO3318, 1 7CECGO3555, California Farm Management, Inc. v. All 17CECG03882, 17CECG03922, 17CECG03950, 16 Ag, Inc. et al., No. 16CECG03722, 18CECG00431 17 California Farm Management, Inc. v. PLAINTIFF'S EVIDENTIARY Maravilla et al., No. 17CECG03058 OBJECTIONS TO DEFENDANTS' 18 DECLARATIONS IN OPPOSITION TO California Farm Management, Inc. v. PLAINTIFF'S MOTION FOR SUMMARY 19 Precision Hay Company, et al., No. JUDGMENT OR, IN THE ALTERNATIVE, 17CECG03059 SUMMARY ADJUDICATION 20 California Farm Management, Inc. v. Date: December 13, 2018 21 Marcos Renteria Ag Services, Inc. et al., No. Time: 3:30 p.m. 17CECG03318 Dept: 502 22 Judge: Hon. Donald S. Black California Farm Management, Inc. v. 23 Anderson's Tree Care Specialist, Inc. et al., No. 17CECG03555 24 California Farm Management, Inc. v. Soto 25 et al., No. 17CECG03882 26 California Farm Management, Inc. v. Tapestry Vineyards, Inc. et al., No. 27 17CECG03922 28 CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ 1 California Farm Management, Inc. v. 2 Madrigal et al., No. 17CECG03950 3 California Farm Management, Inc. v. Colligere Farm Management Company et 4 al., No. 18CECG00431 5 6 Plaintiff California Farm Management, Inc. ("CFM") hereby submits its Evidentiary 7 Objections to the Declarations of Kim Piersol and Veronica Darling in connection with 8 Defendants' Opposition to CFM's Motion for Summary Judgment or, in the Alternative, 9 Summary Adjudication: 10 I. OBJECTIONS TO KIM PIERSOL DECLARATION 11 Objection Number 1 TROUTMAN SANDERS LLP 12 (Piersol Declaration, Paragraph 5) 13 "Based on my review of CFM's actuarial reports and audited financial statements, as well as 14 industry-wide data for administration of self-insurance groups such as CFM, I have concluded 15 that CFM's alleged deficit (also referred to as the Group Net (Loss)) is overstated by $9,548,118 16 or more. My analysis is preliminary and does not include discounts to the overall alleged deficits 17 that would be attributable to claims mishandling and potentially other areas of claimed expense 18 by CFM. My calculations are reflected in the documents I created, attached hereto as Exhibit B. 19 The fields in light blue reflect numbers generated by CFM's actuary — CACI, and the fields in 20 dark blue reflect my indicated changes to the assessment analysis when I applied by actuarial 21 analysis based upon the data and information produced by CFM and CACI. Besides an overall 22 calculation, there is a sheet for each individual defendant, and the group totals are represented in 23 the right far right column. My conclusion that the alleged deficit is overstated is discussed 24 below." 25 Grounds for Objection 1: Lacks foundation. Cal. Evid. Code §§ 702, 800. Statements are 26 improper expert testimony in that methodology underlying "overstated" deficit is not disclosed in 27 testimony or attachments. Improper expert testimony. Evid. Code §§ 800-801_ 803. 28 -2- CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ 1 Court's Ruling On Objection 1: Sustained: 2 Overruled: 3 4 5 Objection Number 2 6 (Piersol Declaration, Paragraph 7) 7 "In the 2017 year end actuarial report, CACI has reduced its own projections for the assessment 8 years 2005 through 2015, resulting in a substantial reduction in the alleged deficit from 2015 to 9 2017 of $3,332,212. This means that, were the assessments of these Defendants calculated today 10 using CACI's 2017 Actuarial Reserve Analysis, CFM's own overall projected 'deficit' number 11 would be $3,332,212 lower than it was when CFM issued the assessments in 2016. This number 12 is reflected in the field of Exhibit B entitled "CACI Discounted Ultimate Loss Development 13 TROUTMAN S 12/15 through 12/17." 14 Grounds for Objection 2: Relevance. Evid. Code § 350. Not relevant to the subject matter of 15 CFM's motion, as CFM's deficit and assessment was predicated on the actuarial analysis as of 16 December 31, 2015, as provided to Travis Harper on April 6, 2016, and any later actuarial 17 forecast or related testimony completed after the assessment was issued is irrelevant to the deficit 18 and assessment at issue. 19 Court's Ruling On Objection 2: Sustained: 20 Overruled: 21 22 23 Objection Number 3 24 (Piersol Declaration, Paragraph 8) 25 "Applying actuarial standards of practice and principles to the data received from CFM and CACI 26 to CFM's financial and actuarial reports through year end 2017, I have concluded that CACI has 27 significantly overestimated their deficits for the assessment years 2005 through 2015 by 28 -3- CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ 1 $3,518,979. When taken together, the reduction in the alleged deficit reflected in CFM's own 2 analysis, as well as the application of my best estimate totals $6,851,191. This number is 3 reflected in the field of Exhibit B entitled "December 31, 2018 Huggins Discounted Reserve 4 Adjustment." 5 Grounds for Objection 3: Relevance. Evid. Code § 350. Not relevant to the subject matter of 6 CFM's motion, as CFM's deficit and assessment was predicated on the actuarial analysis as of 7 December 31, 2015, as provided to Travis Harper on April 6, 2016, and any later actuarial 8 forecast or related testimony completed after the assessment was issued, including CACI's 2017 9 Actuarial Reserve Analysis, is irrelevant to the deficit and assessment at issue. Lacks foundation. 10 Cal. Evid. Code §§ 702, 800. Statements are improper expert testimony in that methodology 11 underlying "overestimated" deficit is not disclosed in testimony or attachments. Improper expert 12 testimony. Evid. Code §§ 800-801, 803. 13 Court's Ruling On Objection 3: Sustained: 14 Overruled: 15 16 17 Objection Number 4 18 (Piersol Declaration, Paragraph 9) 19 "Defendants are not responsible for each of these years they were not a member. Nevertheless, 20 using CFM's own numbers taken directly from documents produced by CFM in this matter and 21 including a 10% surcharge that CFM's documents refer to as a 'shield' discussed above, when the 22 offsets or overcharges set forth above are added up, the total is $9,548,118 that CFM seeks over 23 what it needs according to my actuarial analysis. When this number is applied to CFM's 24 projected paper deficit, CFM's overall Group Net (Loss), the remaining alleged deficit is 25 significantly less than CFM projected." 26 Grounds for Objection 4: Relevance. Evid. Code § 350. Not relevant to the subject matter of 27 CFM's motion, as CFM's deficit and assessment was predicated on the actuarial analysis as of 28 -4- CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ 1 December 31, 2015, as provided to Travis Harper on April 6, 2016, and any later actuarial 2 forecast or related testimony completed after the assessment was issued is irrelevant to the deficit 3 and assessment at issue. Lacks foundation. Cal. Evid. Code §§ 702, 800. Statements are 4 improper expert testimony in that methodology underlying "overestimated" deficit is not 5 disclosed in testimony or attachments. Improper expert testimony. Evid. Code §§ 800-801, 803. 6 Court's Ruling On Objection 4: Sustained: 7 Overruled: 8 9 10 Objection Number 5 11 (Piersol Declaration, Paragraph 10) TROUTMAN SANDERS LLP 12 "It is important to note that CACI's projected losses for the assessment years 2005-2015 have 13 been decreasing over the past few yews. so CFM's paper deficit may decrease even more by the 14 time the 2018 financials are completed and analyzed — even using CACI's assumptions and 15 methodologies. 16 Grounds for Objection 5: Relevance. Evid. Code § 350. Not relevant to the subject matter of 17 CFM's motion, as CFM's deficit and assessment was predicated on the actuarial analysis as of 18 December 31, 2015, as provided to Travis Harper on April 6, 2016, and any later actuarial 19 forecast or related testimony completed after the assessment was issued is In-L.:levant to the deficit 20 and assessment at issue. Lacks foundation, speculative Cal. Evid. Code §§ 702, 800. Declarant 21 speculates that "CFM's paper deficit may" decrease, and provides no foundation. Improper expert 22 testimony. Evid. Code §§ 800-801, 803. 23 Court's Ruling On Objection 5: Sustained: 24 Overruled: 25 26 27 28 -5- CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ 1 II. OBJECTIONS TO VERONICA DARLING DECLARATION 2 Objection Number 1 3 4 (Darling Declaration, Paragraph 3, ins. 3-27) 5 "CFM has not been consistent in its calculated Group Net (Loss) numbers and used different 6 Group Net (Loss) numbers in its calculations and demands for payment from various defendants. 7 For example, the Group Net (Loss) numbers used by CFM for All Ag, Inc., Colligere Farm 8 Management, Inc., and Augustin Madrigal (El Dorado) are approximately 10% lower than the 9 Group Net (Loss) numbers for the remaining defendants. Additionally, active members of CFM 10 are not assessed for Group Net (Loss) through the 2014 and 2015 program years; only inactive 11 (i.e., former) members of CFM have been issued assessments for those years." 12 Grounds for Objection 1: Lacks foundation. Cal. Evid. Code §§ 702, 800. Declarant does not 13 identify the "various defendants" referred to, nor does declarant provide foundation for the 14 statements regarding CFM's assessment of active or inactive members. 15 Court's Ruling On Objection 1: Sustained: 16 Overruled: 17 18 19 Objection Number 2 20 (Darling Declaration, Paragraph 4 and Exhibit 11) 21 "A true and correct copy of Plaintiff's 2017 Program Year Actuarial Reserve Report, Bates Nos. 22 CFM 013565-13636 is attached hereto as Exhibit 11." 23 Grounds for Objection 2: Relevance. Evid. Code § 350. not relevant to the subject matter of 24 CFM's motion, as CFM's deficit and assessment was predicated on the actuarial analysis as of 25 December 31, 2015, as provided to Travis Harper on April 6, 2016, and any later actuarial 26 forecast or related testimony completed after the assessment was issued is irrelevant to the deficit 27 and assessment at issue. 28 -6- CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ 1 Court's Ruling On Objection 2: Sustained: 2 Overruled: 3 4 5 Objection Number 3 6 (Darling Declaration, Paragraph 5, lns. 15-19, Exhibit 12) 7 "Mr. Harper testified that CFM's current operating expenses make up approximately 40 percent 8 of CFM's total expenses. Additionally, Mr. Harper testified that CFM has never been at risk of 9 being unable to pay a workers' compensation claim. Attached hereto as Exhibit 12 is a true and 10 correct copy of the relevant excerpts of Mr. Harper's deposition, in conformance with California 11 Rule of Court 3.1116." 12 Grounds for Objection 3: Relevance. Evid. Code § 350. Not relevant to the subject matter of 13 CFM's motion, as CFM's deficit and assessment was predicated on the actuarial analysis as of 14 December 31, 2015, as provided to Travis Harper on April 6, 2016, and any later actuarial 15 forecast or related testimony completed after the assessment was issued is irrelevant to the deficit 16 and assessment at issue. CFM's ability to pay claims is not relevant to the existence of CFM's 17 deficit or its assessment. 18 Court's Ruling On Objection 3: Sustained: 19 Overruled: 20 21 22 Objection Number 4 23 (Darling Declaration, Paragraph 6, lns. 21-27 and Exhibit 13) 24 "During his deposition, Mr. Johnson testified that CFM's "deficit" is "a paper deficit because it's 25 not money that is actually owed now." Mr. Johnson distinguished CFM's paper deficit from an 26 actual deficit in which CFM was without money to pay claims. Mr. Johnson was adamant that 27 CFM's deficit is paper only, and that no workers' compensation claim has ever been at risk of 28 going unpaid for lack of funds. Attached hereto as Exhibit 13 is a true and correct copy of the -7- CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ 1 relevant excerpts of Mr. Johnson's deposition, in conformance with California Rule of Court 2 3.1116." 3 Grounds for Objection 4: Irrelevant and Prejudicial. Evid. Code §§ 350, 352. Not relevant to 4 the subject matter of CFM's motion. CFM's ability to pay claims is not relevant to the existence 5 of CFM's deficit or its assessment. Distinction between "paper" and "actual" deficit irrelevant 6 and misleading; CFM's "paper" deficit sufficient cause to issue assessment. 7 Court's Ruling On Objection 4: Sustained: 8 Overruled: 9 10 11 Objection Number 5 TROUTMAN SANDERS LLP 12 (Darling Declaration, Paragraph 7) 13 "CFM's UMF No. 12 states that the assessment was approved by OSIP as an element of the 14 August 2012 Corrective Action Plan. This "fact" is misleading, as the earliest that OSIP was 15 notified of CFM's intent to impose an assessment plan was August 2016, according to CFM's 16 own documents. CFM's attempt to imply that the assessment was approved in 2012, or that the 17 issuance of a 2016 assessment was approved in 2012, is patently false. A true and correct copy of 18 correspondence from David Johnson to OSIP dated August 31, 2016 is attached hereto as Exhibit 19 14, Bates No. CFM 0017562." 20 Grounds for Objection 5: Statements lacking foundation and personal knowledge, speculation. 21 Evid. Code §§ 403, 702. Counsel provides no foundation for personal knowledge. Misleading 22 and Argumentative. Cheviot Vista Homeowners Ass'n v. State Farm Fire & Cas. Co., 143 Cal. 23 App. 4th 1486 (2006) (Counsel's unsupported testimony and statements made in his declaration 24 are insufficient to create a triable issue of material fact.) Counsel misstates the content of CFM's 25 UMF No. 12, which states that the assessment was approved by CADIR "as an element of 26 CFM's CAP. 27 28 -8- CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ 1 Court's Ruling On Objection 5: Sustained: 2 Overruled: 3 4 Objection Number 6 5 (Darling Declaration, Paragraph 8) 6 "Additionally, contrary to CFM's representations to this Court, CFM has never provided any 7 evidence that OSIP is aware CFM has not assessed current members for program year 2014 and 8 2015. Rather, CFM has only described the assessment plan in general terms to OSIP — never 9 distinguishing the treatment between current and former members. A true and correct copy of 10 David Johnson's February 28, 2017 correspondence with OSIP is attached hereto as Exhibit 15, 11 Bates No. CFM 009270." 12 Grounds for Objection 6: Relevance. Evid. Code § 350. Statement not relevant to the subject 13 matter of CFM's motion, which deals with an assessment against former members. Statements 14 lacking foundation and personal knowledge, speculation. Evid. Code §§ 403, 702. Counsel 15 provides no foundation for personal knowledge. Misleading and Argumentative. Cheviot Vista 16 Homeowners Ass'n v. State Farm Fire & Cas. Co., 143 Cal. App. 4th 1486 (2006) (Counsel's 17 unsupported testimony and statements made in his declaration are insufficient to create a triable 18 issue of material fact.) 19 Court's Ruling On Objection 6: Sustained: 20 Overruled: 21 22 23 Objection Number 7 24 (Darling Declaration, Paragraph 9) 25 "On October 29, 2018, I appeared in Salinas, California and took the deposition of Tammy 26 Nunez, a current member of the CFM' Board of Trustees. During that deposition, Ms. Nunez 27 authenticated the documents attached hereto as Exhibit 16 (Bates No. Nunez000001-000005. In 28 Exhibit 16, another Board member, Denise Fiorini, forwards Ms. Nunez emails from 2009, in -9- CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ 1 which the principal of CFM's Group Administrator began covering up its' various paper deficits, 2 by switching actuaries because the Group Administrator felt the initial actuarial report for 2009 3 overstated losses. Attached hereto as Exhibit 17 is a true and correct copy of the relevant excerpts 4 of Ms. Nunez's deposition, in conformance with California Rule of Court 3.1116." 5 Grounds for Objection 7: 6 Lack of Authentication. Cal. Evid. Code § 1400-1401. The excerpt of testimony attached as 7 Exhibit 17 to the Darling Declaration does not properly authenticate the email attached as Exhibit 8 16. Ms. Nunez merely testified that her recollection was refreshed regarding a different 9 discussion. (Darling Dec., Ex. 17, at p. 133, lns. 21-24). Hearsay. Cal. Evid. Code § 1200. 10 Exhibit 16 is also offered for the truth of the matter asserted by the attorney declarant, i.e., Ms. 11 Darling's assertion that CFM was engaged in a "cover-up" of its deficit in 2009. As such, Exhibit TROUTMAN SANDERS LLP 12 16 is therefore inadmissible hearsay. 13 Court's Ruling On Objection 7: Sustained: 14 Overruled: 15 16 17 Objection Number 8 18 (Darling Declaration, Exhibit 16, Bates-stamped NUNEZ000003-04, at June 3, 2009 email from 19 Travis Harper) 20 Grounds for Objection 8: 21 Lack of Authentication. Cal. Evid. Code § 1400-1401. The excerpt of testimony attached as 22 Exhibit 17 to the Darling Declaration does not properly authenticate the email attached as Exhibit 23 16. Ms. Nunez merely testified that her recollection was refreshed regarding a different 24 discussion. (Darling Dec., Ex. 17, at p. 133, lns. 21-24). Hearsay. Cal Evid. Code § 1200. 25 Exhibit 16 is also offered for the truth of the matter asserted by the attorney declarant, i.e., Ms. 26 Darling's assertion that CFM was engaged in a "cover-up" of its deficit in 2009. As such, Exhibit 27 16 is inadmissible hearsay. 28 - 10 - CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ 1 Court's Ruling On Objection 8: Sustained: 2 Overruled: 3 4 5 Dated: December 7, 2018 TROUTMAN SA LPG S LLP 6 7 By: 8 Marcus T. al Dean A. Morehous 9 Craig Crockett Ryan A. Lewis 10 Attorneys for Plaintiff CALIFORNIA FARM MANAGEMENT, INC. 11 TROUTMAN SANDERS LLP 12 13 14 15 16 17 18 19 20 21 22 23 24 25 27 28 CFM'S EVIDENTIARY OBJECTIONS TO DECLARATIONS ISO DEFENDANTS' OPPOSITION TO MSJ