Preview
1 Brian Zimmerman (admitted pro hac vice)
Nicholas Reisch (admitted pro hac vice)
2 Jessica E. Chong (SBN 317869)
SPENCER FANE LLP
3 3040 Post Oak Blvd., Suite 1400
Houston, TX 77056
4 (713) 552-1234 telephone
5 Ernesto F. Aldover (SBN 157625)
RETZ & ALDOVER, LLP
6 2550 Via Tejon, Suite 3A
Palos Verdes Estates, California 90274
7 (310) 540-9800 telephone
8 Attorneys for Defendants
SVRV 385 Moore, LLC; SVRV 387 Moore, LLC;
9 Gregory J. Davis; Kevin Wolfe; Jason Justesen;
Paramont Woodside, LLC; Paramont Capital,
10 LLC; Monks Family Trust; TEH Capital, LLC;
Caproc III, LLC; WZ Partners LLC; McLan
11 Trust; Wild Rose Irrevocable Trust; Black
Horse Holdings, LLC; Phil Stoker; Diane
12 Stoker; Scott O’Neil; and Dale Huish
13
SUPERIOR COURT OF THE STATE OF CALIFORNIA
14
COUNTY OF SAN MATEO
15
16 Robert Arntsen; Mary Lee; Arntsen Case No. 22-CIV-01148 consolidated
Family Partnership, LP; and Brian with Case No. 22-CIV-01099
17 Christopher Dunn Custodianship;
PARAMONT DEFENDANTS’
18 Plaintiffs, OMNIBUS OPPOSITION TO
PLAINTIFFS’ MOTIONS IN
19 -vs- LIMINE NOS. 1-12
20 David M. Bragg; Kurtis Stuart Kludt;
Silicon Valley Real Ventures, LLC; SVRV Honorable Jeffrey Finigan
21 385 Moore, LLC; SVRV 387 Moore, LLC; Dept: 24
Gregory J. Davis; Kevin Wolfe; Jason
22 Justesen; Paramont Woodside, LLC; and
Paramont Capital, LLC;
23
Defendants.
24
25
26
27
28
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1 John Ho and Quanyu Huang;
2 Plaintiffs,
3 -vs-
4 David M. Bragg; Silicon Valley Real
Ventures, LLC; SVRV 385 Moore, LLC;
5 SVRV 387 Moore, LLC; Gregory J. Davis;
Kevin Wolfe; Jason Justesen; Paramont
6 Woodside, LLC; Paramont Capital, LLC;
Monks Family Trust; TEH Capital, LLC;
7 Caproc III, LLC; WZ Partners LLC;
McLan Trust; Wild Rose Irrevocable
8 Trust; Black Horse Holdings, LLC; Phil
Stoker; Diane Stoker; Scott O’Neil; and
9 Dale Huish;
10 Defendants.
11
12 I. INTRODUCTION
13 On February 19, 2024, Plaintiffs filed motions in limine (“MIL”) seeking to
14 exclude twelve (12) broad categories of evidence. As a preliminary matter, the
15 Defendants other than Bragg and SVRV do not oppose motion numbers 1, 2, 8, and
16 12. Bragg and SVRV will separately oppose some of those motions.
17 But all Defendants oppose Plaintiffs’ Motions in Limine Nos. 3, 4, 5, 6, 7, 9, 10,
18 and 11. The subject of those motions are as follows:
19
Motion in limine number 3 seeks to exclude any evidence, testimony, or
20 argument that Paramont Defendants did not receive the file bearing the title
“Detail Inv Spent” and bates number Davis000494 in July or August 2019;
21
Motion in limine number 4 seeks to exclude all deposition answers to which
22 changes were timely made through errata or questions about the same;
23 Motion in limine number 5 seeks to exclude all evidence or testimony relating
to Plaintiffs’ prior or current ownership of real estate or investment in any real
24 estate project, except those managed by any of the defendants;
25 Motion in limine number 6 seeks to exclude all evidence or testimony relating
to Plaintiffs’ financial condition;
26
Motion in limine number 7 seeks to exclude all evidence, testimony, and
27 argument as to whether any plaintiff was an accredited investors;
28
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Motion in limine number 9 seeks to exclude any evidence, testimony, or
1 argument by Bragg or SVRV that is contrary to the well-pleaded allegations
contained in Plaintiffs’ original complaint dated March 15, 2022.
2
Motion in limine number 10 seeks to exclude any evidence, testimony, or
3 argument relating to Plaintiffs’ relationship or communications with their
attorneys;
4
Motion in limine number 11 seeks to exclude any evidence, testimony, or
5 argument that operating agreements other than the effective operating
agreements existed prior to or at the time of incorporation of the Moore Road
6 LLCs.
7 The basis for Plaintiffs’ motions is two-fold: (1) the evidence, testimony, and/or
8 arguments are not relevant and (2) they are more prejudicial than probative.
9 Plaintiffs’ arguments fail for the reasons described in detail below.
10 II. LEGAL STANDARD
11 California courts take a broad view of relevancy of evidence. (Ruiz v. Minnesota
12 Mining & Manufacturing Co. (1971) 15 Cal.App.3d 462, 467.) Relevant evidence
13 “means any evidence having a rational tendency to prove or disprove any disputed fact
14 that is of consequence to the determination of the action.” (Id.) Thus, where evidence
15 is offered to render the desired inference more probable that it would be without the
16 evidence, that evidence is considered to be relevant. (Id. at 467-468, n. 3.) Moreover,
17 under Evidence Code section 351, all relevant evidence is admissible unless otherwise
18 provided by statute. Evidence Code Section 352 grants courts the discretion to exclude
19 evidence where its “probative value is substantially outweighed by the probability
20 that its admission will (a) necessitate undue consumption of time or (b) create
21 substantial danger of undue prejudice, of confusing the issues, or of misleading the
22 jury.
23 III. ARGUMENT
24
A. MIL No. 3 improperly and unjustifiably asks the Court to declare a
25 disputed fact as true based on unwarranted supposition.
26 In reality, MIL No. 3 is not a motion in limine at all, but a disguised motion for
27 summary judgment in which Plaintiffs improperly ask the Court to make a factual
28 finding that is within the province of the jury to decide. It is improper to use a motion
PAGE 3
1 in limine to seek a summary judgment or summary adjudication on an issue. (Clemens
2 v. American Warranty Corp. (1987) 193 Cal.App.3d 444, 451.) The reasons are
3 numerous. Motions in limine do not have the procedural protections put in place for
4 summary adjudication to ensure parties have sufficient time to respond. They also do
5 not have evidentiary requirements or clear burdens of proof to ensure that a fact issue
6 is not improperly taken away from the jury. In addition, the circumstances of this case
7 make this improper request even more problematic given that it was the Plaintiffs
8 that chose to seek a preferential trial setting knowing that it would preclude motions
9 for summary judgment. The mere fact that MIL No. 3 is an improper motion for
10 summary judgment is a sufficient basis to deny it.
11 But even ignoring the procedural deficiencies, the relief sought in MIL No. 3 is
12 not justified. Defendants Davis, Paramont Woodside, and Paramont Capital do not
13 contest that they did, at some point, receive the Excel spreadsheet bearing the title
14 “Detail Inv Spent” (bates labeled Davis000494). However, they do dispute that they
15 received this document in “July or August 2019” as Plaintiffs claim. And many of the
16 other defendants—the investors in Paramont Woodside—dispute ever receiving the
17 spreadsheet. It simply is not something it would ever make sense for them to receive.
18 Further, despite Plaintiffs’ contentions to the contrary, this issue has not been
19 sufficiently established such that exclusion of “any evidence, testimony, or argument”
20 on this issue is proper. The evidence referenced in Plaintiffs’ motion in limine does not
21 “prove” otherwise. At most, the evidence proffered by Plaintiffs shows that: (1) on July
22 29, 2019, and again on August 15, 2019, Lukas Leuthold sent Paramont Defendants
23 an email with a link to a certain Google Drive folder; (2) the link and folder are still
24 active; (3) as of today, a different document resembling the Spreadsheet is available in
25 the folder; and (4) data from this different document indicates that it was first
26 uploaded to the folder on August 15, 2019. From this, Plaintiffs surmise that
27
28
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1 “evidently” the spreadsheet had been uploaded to the folder at some earlier point,
2 downloaded by Paramont, and then replaced by the “resembling” document.
3 Even if the facts as Plaintiffs state them are accepted as true, their conclusion
4 does not follow. It simply cannot be presumed from these facts—i.e., from the existence
5 of a similar (but different) document in an online folder almost five years after the
6 time-period in question—that, in 2019, Paramont Defendants accessed and
7 downloaded the spreadsheet from that same online folder. Indeed, Plaintiffs’
8 assumption that the spreadsheet was ever uploaded to the folder is pure speculation.
9 Once again, this is a disputed issue for the jury to decide. Defendants Davis,
10 Paramont Woodside, and Paramont Capital acknowledge that they did come into
11 possession of the spreadsheet at some point and did produce the spreadsheet as part
12 of discovery in this case. But they do not concede that they received this document in
13 the time period claimed by Plaintiffs. And Paramont Investors do not even admit to
14 receiving the document at all.
15 Plaintiffs are free to present evidence supporting their claim at trial for the jury
16 to evaluate. But the evidence simply does not render their assertion “undisputable”
17 even setting aside the impropriety of the disguised motion for summary judgment.
18 There is basis to exclude evidence, testimony, or argument on this issue.
19
B. MIL No. 4 improperly seeks to exclude deposition answers changed
20 through errata or questions about those answers.
21 Almost two months after the depositions of Mary Lee, Martha Dunn, and Robert
22 Arnsten, these witnesses submitted extensive errata sheets making a total of 191
23 changes to their testimonies: 25 for Lee, 61 for Dunn, and 105 for Arnsten. These
24 changes go beyond correcting typographical or transcribing errors. Instead, many of
25 the errata substantially recast or outright contradict their previous answers. Consider
26 the following examples:
27
28
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1 Mary Lee
2 Page/Line Original Answer Errata Sheet Answer
3 40:17 Yes, we didn’t agree I am not sure.
to it.
4
45:25 No. Yes, as I said earlier, I believed
5 we were on the same page even
6 though I never got a document to
sign.
7
78:11 I am sure. I am not sure.
8
9 (Lee Errata Sheet, Ex. 1.)
10
11 Martha Dunn
12 Page/Line Original Answer Errata Sheet Answer
13 132:20 No. Yes. Dave told us we were
members in the Moore Road LLCs
14 in emails.
15 140:3 No. Yes, I think our email
16 communications reflect our
understanding that we had an
17 agreement and that we were
members in the Moore Road
18 LLCs.
19 227:25 correct Incorrect
20
21 (Dunn Errata Sheet, Ex. 2.)
22
23 Robert Arnsten
24 Page/Line Original Answer Errata Sheet Answer
25 107:17-18 No, there was no Yes, the terms in the February
document that I 2018 operating agreements. We
26 agreed with. would have signed those once the
LLCs were completed as they
27 stood with the names and account
28
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1 numbers for the accounts for each
piece of property.
2
108:5 Correct. Incorrect. We agreed to the terms
3 only in the February 2018
operating agreements.
4
249:10-11 I would say true, we We did have an agreement, but
5 never came to a real then he violated it and never gave
agreement. us the final documents to sign.
6
7 (Arntsen Errata Sheet, Ex. 3.)
8 The California Code of Civil Procedure gives deponents thirty days from the
9 date a deposition is transcribed to change answers. (Civ. Proc. Code § 2025.520.)
10 Afterward, the deposition officer notes the errata by the deponent (Id.) Plaintiffs argue
11 that section 2025.520 states that an errata sheet effectively expunges the deponents’
12 original answers from the record and renders them inadmissible for all purposes. But
13 nothing in section 2025.520 mandates this result. Rather, 2025.520 merely requires
14 the deposition officer to “indicate on the original of the transcript . . . any action taken
15 by the deponent”. (Id.) (emphasis added). Nothing in the statute indicates that the
16 prior answers are expunged or legally cease to exist. Indeed, section 2025.520’s
17 directive that revisions be “indicated on” the transcript implies that the original
18 answers will remain. See Lugtig v. Thomas, 89 F.R.D. 639, 641-42 (N.D. Ill. 1981)
19 (Similar federal instruction implies that original answers remain and “the original
20 answer to the deposition questions [. . .] can be read at the trial.”); accord Podell v.
21 Citicorp Diners Club, Inc., 112 F.3d 98, 103 (2d Cir. 1997).1
22 “A deposition is not a take home examination,” and rules permitting errata do
23 not give a deponent carte blanche to change their testimony without repercussion.
24 Greenway v. Int'l Paper Co., 144 F.R.D. 322, 325 (W.D. La. 1992); accord Hambleton
25 Bros. Lumber Co. v. Balkin Enterprises, Inc., 397 F.3d 1217, 1225 (9th Cir. 2005).
26
27 1Because section 2025.520 is substantially similar in word and purpose to Rule 30(e) of the
Federal Rules of Civil Procedure, federal decisions are useful authority on interpretation for
28 California courts. (In re Joyner (1989) 48 Cal.3d 487, 492–493.)
PAGE 7
1 Otherwise, “one could merely answer the questions with no thought at all then return
2 home and plan artful responses.” Id. Indeed, the “majority approach” among federal
3 courts is to treat “[t]he fact and extent of the change[s]” to a deponent’s testimony “as
4 subjects for impeachment[.]” E.E.O.C. v. J.H. Walker, Inc., No. CIV.A.H-05-2232, 2007
5 WL 172626, at *11 (S.D. Tex. Jan. 18, 2007). The policy behind this approach is
6 straightforward:
7 [T]he cross-examiner and the jury are likely to be keenly interested in
8 the reasons [the deponent] changed his testimony. There is no apparent
reason why the witness who changes his mind between the giving of the
9 deposition and its transcription should stand in any better case. The Rule
is less likely to be abused if the deponent knows that [. . .] the original
10 answers as well as the changes and the reasons will be subject to
11 examination by the trier of fact.
12 Lugtig, 89 F.R.D. at 642 (internal quotations omitted).
13 For this reason, California courts hold that witnesses may be cross-examined
14 on revisions to their testimony. (George v. Double-D Foods, Inc. (1984) 155 Cal.App.3d
15 36, 45.) Indeed, Lewis concluded it would be error not to allow a party to read the
16 original deposition answers and cross-examine the witnesses regarding them. (Lewis
17 v. Western Truck Line (1941) 44 Cal.App.2d 455, 461.)
18 Plaintiffs also argue that the risk of unduly consuming the court and jury’s time
19 outweighs the probative value of Lee, Dunn, and Arntsen’s original testimony. But
20 Plaintiffs’ argument is premised on their counsel raising objections to the use of such
21 original deposition testimony. The fact that a trial will be delayed by party’s self-
22 interested assertion of objections is not a valid basis to exclude evidence. That is
23 particularly true when, as here, such objections are legally frivolous.
24 Plaintiffs also complain that there is a risk of confusing or misleading the jury
25 by having to explain the reasons for the changed testimony. But such an argument
26 does not make any sense. It has always been the exclusive role of a jury to weigh
27 “contradictions between a witness’s testimony and his or her prior statements” and to
28
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1 determine “which, if any, of a witness’s assertions are credible.” (Lobo v. Tamco (2014)
2 230 Cal.App.4th 438, 445.) Untangling the obscurities of conflicting testimony is part
3 and parcel of “the jury’s duty to assess witness credibility,” (Moran v. Foster Wheeler
4 Energy Corp. (2016) 246 Cal.App.4th 500, 518.)
5 In addition, Plaintiffs’ concern over the risk of “extended redirect” is unfounded
6 because this same risk exists for all types of impeachment evidence. The entire
7 purpose of redirect examination is to “explain or rebut adverse testimony or inferences
8 developed on cross-examination, and to rehabilitate a witness whose credibility has
9 been impeached.” (People v. Cleveland (2004) 32 Cal.4th 704, 745.)
10 Lastly, Plaintiffs stress the deponents’ age and recent hospitalizations,
11 presumably imply that it would be unfair to hold them to their original testimony. But
12 there is no basis in the law for this argument. Moreover, each of the deponents
13 expressly testified that any health issues did not make them unable to proceed with
14 their deposition. (Lee Depo., Ex. 4 6:18-7:4, 11:23-12; Dunn Depo., Ex. 5 7:20-9:3;
15 Arntsen Depo., Ex. 6 10:7-10:10, 11:10-11:17, 12:15-13:4.) In fact, Arnsten—who had
16 by far the most deposition changes—testified that (1) he did not suffer any cognitive
17 deficits or memory loss as a result of the stroke, and (2) a neurologist did not identify
18 any cognitive deficits. (Arntsen Depo., Ex. 6 21:12-15; 21:24-22:1). If Plaintiffs believe
19 that Lee, Dunn, and Arntsen’s health problems (or other factors) are to blame for their
20 changing testimony, they are free to offer that explanation to the jury, but this is not
21 a basis for limiting cross-examination.
22 In the alternative, Plaintiffs’ improper errata sheets should be stricken.
23 Plaintiffs’ motion is nothing more than a pretext because Plaintiffs and/or their
24 counsel are well aware that their errata sheets are improper sham erratas.
25 Consequently, Defendants seek to strike the Plaintiffs’ improper errata
26 sheets. Courts routinely reject “sham” corrections to deposition testimony –
27 corrections that are not “limited to corrections or stenographic errors” and that are
28
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1 “used to alter deposition testimony provided under oath and correctly transcribed.”
2 Moriarty v. Am. Gen. Life. Ins. Co., 2018 WL 4628365, at *2 (S.D. Cal. Sept. 27, 2018)
3 (citation omitted; emphasis added); see also Hambleton Bros., 397 F. 3d at 1225-26
4 (striking changes that were contradictory, not corrective); Greer v. Pac. Gas & Elec.
5 Co., 2017 WL 2389567, at *1 (E.D. Cal. June 1, 2017) (striking errata that improperly
6 attempted to substantively alter sworn testimony); ViaSat, Inc., v. Acacia Commc’ns,
7 Inc., 2018 WL 899250, at *3 (S.D. Cal. Feb. 15, 2018 (holding same).
8 As one court aptly put it:
9 [T]o survive, the errata must, at minimum, still be “corrective,” targeted
at ameliorating some defect, not new and more “artful responses” to
10 questions previously propounded. Logically, errata that “materially
change[s] the answers,” and “represent[s] lawyerly fixing of potentially
11 problematic testimony” cannot be so classified.
12 Blair v. CBE Grp. Inc., 2015 WL 3397629, at *6 (S.D. Cal. May 26, 2015) (internal
13 citations omitted). The “rewriting of sworn testimony…is not a legitimate purpose of
14 errata submitted…” In re Cathode Ray Tube (CRT) Antitrust Litig., 2014 WL
15 12647874, at *2 (N.D. Cal. Dec. 12, 2014).
16 There are clear policy reasons for courts to prohibit these types of changes.
17 To allow such changes would eliminate the purpose of deposition
testimony, which is to elicit a witness’s testimony under oath, in a
18 recorded setting, subject to questioning without coaching from any other
person. These errata sheets are not deposition testimony and
19 should not be considered when evaluating such
testimony…their deposition testimony remains what was said at
20 their depositions. Greer, 2017 WL 2389567, at *7 (emphasis added);
Blair, 2015 WL 3397629, at *10 (“The purpose of depositions is to
21 determine the facts of the case while the witness is under the scrutiny
of examination. The purpose is certainly not to find out how the witness
22 answers questions with the ability to calmly reflect on the response for
30 days in collaboration with counsel.”).
23
24 Plaintiffs have not offered, and cannot offer, any legitimate purpose or reason as to
25 replacing their prior sworn deposition testimony with their errata, and consequently,
26 this Court should strike the errata all together.
27 C. MIL No. 5 improperly seeks exclude evidence of Plaintiffs’ prior real
estate and investment experience relevant to Plaintiffs’ claims.
28
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1 Reasonable reliance on an alleged misrepresentation, concealment, or false
2 promise, has long been an element of such fraud claims. (Lingsch v. Savage (1963) 213
3 Cal.App.2d 729, 737–739.) In Wagner v. Benson, the appellate court concluded that
4 evidence of a plaintiff’s past investments was relevant and properly admitted by the
5 trial court. (Wagner v. Benson, (1980) 101 Cal.App.3d 27, 36.) Wagner explained that
6 “plaintiffs’ reasonable reliance on the alleged misrepresentation is an essential
7 element of fraud...and [that] reliance may be demonstrated to be unreasonable in light
8 of plaintiffs’ intelligence and experience.” (Id.) (citations omitted).
9 Here, the Plaintiffs have accused the Defendants of numerous legal theories of
10 of fraud based on multiple different alleged misrepresentations, concealments, and
11 false promises. The law clearly makes reasonable reliance an element of each such
12 claim. Like the plaintiff in Wagner, Plaintiffs are seeking to exclude evidence of their
13 past business ventures and experience. The Plaintiffs’ knowledge and sophistication
14 gained through ownership of real estate and investment in any real estate project is
15 undoubtedly relevant to this action, which deals with investments and ownership of
16 real estate properties.
17 For example, the Arntsen Plaintiffs (Arntsen, Lee, and Dunn) are sophisticated
18 real estate investors who, for more than two decades, have owned more than twenty
19 (20) single family homes in Dallas, Texas, through a limited partnership for which
20 they are members. As members of that partnership, they received K-1s, which is a
21 yearly tax document that is used for business partnerships to report to the IRS.
22 Arntsen even received K-1s from Defendant SVRV for prior investments. Although
23 Plaintiffs knew that K-1s were provided to members, based on their experience as
24 members of their family’s partnership, they did not receive any in relation to the
25 Moore Road project. Plaintiffs Ho and Huang have similar investment experience.
26 Plaintiffs allege, among other things, that they were defrauded into believing
27 they were members of SVRV 385 Moore and SVRV 387 Moore. But their prior
28
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1 investment experience is directly relevant as to whether they could have reasonably
2 relied on any such representations.
3 Additionally, the probative value of this evidence would not be substantially
4 outweighed by undue prejudice because there is no prejudice to Plaintiffs. Asking
5 questions directly related to Plaintiffs’ own experience, qualities that are
6 transferrable to how they conducted their investment in this case, does not indicate
7 that Plaintiffs are “independently wealthy.” For all the jury knows, Plaintiffs can be
8 taking a loss every year on their investment(s). The fact that someone owns property
9 does not equate to being independently wealthy—it simply means that they own
10 property and have experience with owning property. And regardless, evidence directly
11 relevant to an element of a Plaintiffs’ cause of action cannot be excluded because it is
12 “prejudicial.” If that were the standard, no evidence could ever be admitted because it
13 would necessarily be prejudicial to one party or the other.
14 MIL No. 5 should be denied as unjustified and inconsistent with California law.
15 D. MIL No. 6 seeking to exclude evidence of Plaintiffs’ financial condition
is improper because such evidence is relevant to Plaintiffs’ claims.
16
17 Without specifying precisely what type of evidence Plaintiffs seek to exclude,
18 they seek a broad prohibition on evidence of “Plaintiffs’ financial condition.” It is
19 unclear where the desired boundaries of exclusion exist. Presumably, Plaintiffs simply
20 want to a ruling from the Court excluding any such evidence Defendants wish to
21 admit, while not restricting Plaintiffs. Such a broad exclusion of evidence would likely
22 hamstring Defendants’ ability to put on their case and respond to evidence introduced
23 during the trial. Testimony at trial “sometimes defies pretrial predictions,” and events
24 at trial “may change the context in which the evidence is offered.” (Kelly v. New W.
25 Fed. Sav. (1996) 49 Cal.App.4th 659, 671.) Plaintiffs’ motion, if granted, would exclude
26 a broad swath of potentially highly probative evidence before it is even known how
27 such evidence might be used in the context of the trial. The undefined boundaries of
28
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1 the motion should be enough basis on its own to deny it.
2 Nonetheless, the motion should also be denied because Plaintiffs’ financial
3 condition cannot be separated from their experience and sophistication relating to
4 prior investments, which is relevant to Plaintiffs’ fraud claim as demonstrated above.
5 Further, Plaintiffs’ financial condition is also likely to be relevant to whether
6 their prior material breach of the requirement to make capital calls to cover loan
7 payments for the Moore Road properties precludes contract liability for the operating
8 agreements alleged by Plaintiffs. Under the operating agreements Plaintiffs allege
9 exist, they were required to contribute additional funds for capital calls requested by
10 SVRV. SVRV made such a capital call when it ran out of funds to pay the loan for the
11 Moore Road properties. After covering one such loan payment, Plaintiffs refused to
12 pay any more, risking foreclosure and loss of everyone’s investment. Plaintiffs’ ability
13 to make additional such payments (i.e. their financial condition) is directly relevant
14 to this issue, which Plaintiffs need to overcome to prevail on breach of contract.
15 In addition, part of the defense offered by Defendants is that Plaintiffs are
16 sophisticated investors that simply lost money on a risky investment while
17 understanding the risks, rather than being defrauded. Defendants cannot do so
18 without addressing Plaintiffs’ “financial condition.”
19 Moreover, evidence of Plaintiffs’ financial condition will likely go to Plaintiffs’
20 credibility. (See Evid. Code, § 210 (“relevant evidence” includes “evidence relevant to
21 the credibility of a witness”).) Plaintiffs will undoubtedly attempt to argue or sway the
22 jury’s opinions by painting themselves as destitute elderly persons and immigrants
23 who got swindled out of their life’s savings—when the evidence is to the contrary.
24 Evidence disproving such assertions is explicitly permissible. (See, e.g., Evid. Code, §
25 780, subd. (f).)
26 The probative value of admitting Plaintiffs’ financial condition is not
27 outweighed by undue prejudice because there is no prejudice to Plaintiffs. Any
28
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1 “concern” that Plaintiffs may have about a jury not awarding monetary damages due
2 to their “independent wealth” can easily be vetted during voir dire. On the other hand,
3 there would be prejudice to Defendants if a motion in limine inhibits their ability to
4 present relevant evidence to their defenses or refute any evidence presented by
5 Plaintiffs regarding their “financial condition.” The motion should be denied.
6 E. MIL No. 7 seeking exclusion of evidence of Plaintiffs’ status as
accredited investors is similarly improper because such evidence is
7 relevant to Plaintiffs’ claims.
8
“Accredited investor” is defined as, among other things, “any person who, on
9
the basis of such factors as financial sophistication, net worth, knowledge, and
10
experience in financial matters, or amount of assets under management qualifies as
11
an accredited investor under rules and regulations which the Commission shall
12
prescribe.” Morello v. White, No. CV1604440DMGAJW, 2017 WL 4404306, at *2 (C.D.
13
Cal. Sept. 5, 2017), report and recommendation adopted, No. CV 16-4440 DMG (AJW),
14
2017 WL 4355893 (C.D. Cal. Sept. 27, 2017). “The accredited investor definition
15
attempts to identify those persons whose financial sophistication and ability to sustain
16
the risk of loss of investment or ability to fend for themselves render the protection of
17
the Securities Act's registration process unnecessary.” Id. at *2.
18
Establishing an investor’s “accredited investor” status is an approach taken by
19
numerous businesses seeking to comply with securities laws. And Bragg and SVRV
20
do so in this case when soliciting investments from the Plaintiffs. Indeed, the
21
documents on which the Plaintiffs’ purport to base their claims include assertions by
22
each of them that they are accredited investors.
23
Without explicitly acknowledging it, Plaintiffs are apparently asking this Court
24
to redact or outright exclude documents they reviewed as part of their review of
25
investments in the Moore Road properties, documents that could not be more central
26
to all the Plaintiffs’ claims.
27
28
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1 Moreover, each Plaintiff’s accredited investor status is clearly relevant to the
2 reasonable reliance element of their fraud claims and admissible as demonstrated
3 above. As stated in Paramont Defendants’ opposition to Plaintiffs’ motion in limine
4 number 5 and 6, Plaintiffs’ “experience” and “financial condition” is relevant, and it is
5 directly tied to the definition of an accredited investor.
6 By attempting to exclude any evidence related to Plaintiffs being accredited
7 investors, they appear to be trying to rewrite history and portray themselves as
8 unsophisticated investors, who simply handed over their money with no knowledge or
9 no-how, and got taken advantage of and then asking the Court to bar Defendants from
10 contradicting this alternate version of reality. This is not a valid basis for a motion in
11 limine.
12 Additionally, the probative value is not outweighed by any potential prejudice
13 because Plaintiffs can easily explain what being an “accredited investor” means to
14 them and it would be up to the jury to determine how much “special import” the term
15 carries. The Court should deny Plaintiffs’ attempt to exclude relevant evidence.
16 F. MIL No. 9 seeking exclusion of evidence by Bragg or SVRV that is
contrary to Plaintiffs’ original complaint is improper.
17
18 Plaintiffs argue that no evidence by Bragg or SVRV should be admitted
19 because, at one point in the suit, Bragg and SVRV were defaulted. But by failing to
20 accomplish entry of a default judgment and filing two amended complaints, Plaintiffs
21 have waived any right to rely upon that prior default. Indeed, Bragg and SVRV filed
22 answers to the Second Amended Complaint, which Plaintiffs did not make any effort
23 to strike or otherwise set aside. Nor have Plaintiffs explained why they continued to
24 act as if Bragg and SVRV were non-defaulting defendants in this case if they believed
25 they had defaulted and conceded liability.
26 Plaintiffs did not pursue the prior purported default both because they knew
27 just efforts would not be successful and because they do not actually want default
28
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1 judgments against Bragg and SVRV. In reality, Plaintiffs are seeking to obtain a
2 judgment on the merits against Bragg and SVRV that would have findings that might
3 preclude Bragg from receiving a discharge of his debts in bankruptcy. Plaintiffs actual
4 goal is to receive “a judgment on the merits” without having to prove their case against
5 Bragg and SVRV on the merits. They should not be allowed to do so. Plaintiffs have
6 long treated Bragg and SVRV as non-defaulting defendants. They should not be
7 allowed to alter their prior position and indirectly seeking a default judgment against
8 them.
9 Moreover, the other Defendants are opposed to this relief not simply because it
10 is unjustified and improper against Bragg and SVRV, but because Plaintiffs might
11 also seek to somehow use it against them by prohibiting the other Defendants from
12 offering testimony or other evidence.
13 Plaintiffs have chosen a trial on the merits against Bragg and SVRV, rather
14 than attempting to obtain a default judgment. They should not be permitted to change
15 that choice on the eve of trial and indirectly obtain a default judgment while
16 pretending it is a judgment on the merits.
17 G. MIL No. 10 improperly seeks to prevent Defendants from presenting
18 valid impeachment evidence and argument.
19 Contrary to the suggestion of MIL No. 10, none of the Defendants are seeking
20 to delve into communications between Plaintiffs and their counsel. But the
21 Defendants do seek to be able to offer evidence and argument that many Defendants
22 have been targeted as “wrongdoers” despite the Plaintiffs not having any factual basis
23 to do so based on tactical considerations of Plaintiffs’ counsel. No privilege
24 communications will be involved. Merely relevant facts. Those facts include multiple
25 Plaintiffs’ testimony contrary to the allegations in their current pleading and
26 subsequent errata of that testimony based on … questionable explanations.
27 Indeed, the Plaintiffs have been unable to identify the factual basis for suing
28
PAGE 16
1 many of the Defendants (or even knowing who they are). For example, Martha Dunn
2 said she sued Gregory Davis solely because he signed a contract (to which she is not
3 an alleged party). (Dunn Depo., Ex. 5 97:9–12, 102:15–23, 103:4.) Even worse, Mary
4 Lee did not even realize she had sued Gregory Davis, much less what he did wrong.
5 (Lee Depo., Ex. 4 15:15–21, 16:2–13.)
6 Evidence that Plaintiffs do not know or understand why they brought claims
7 against several of the specific Defendants is relevant both in terms of the merits of
8 Plaintiffs’ claims against those Defendants and for purposes of Plaintiffs’ credibility.
9 Additionally, the probative value is not outweighed by any danger of unfair prejudice
10 or confusion because each Plaintiffs’ basic understanding of why suit was brought
11 against each Defendant—or lack of that understanding—is substantially probative of
12 the merits of Plaintiffs’ claims. If the jury is meant to understand the evidence against
13 these Defendants, then the Plaintiffs should be able to explain it to the jury. This is
14 particularly true given that Defendants were prevented by Plaintiffs’ preferential trial
15 request from potentially eliminating claims or Defendants through summary
16 judgment.
17 Plaintiffs should not be protected from such inquires under the guise of
18 protecting privilege communications, which are not actually the subject of the inquiry.
19 H. MIL No. 11 improperly seeks the Court to establish fact relating to
Plaintiffs’ breach of contract claims as a matter of law despite
20 substantial disputes as to those facts.
21
Plaintiffs seek to have the Court to declare that the alleged contracts that
22
support one of their breach of contract claims are valid contracts and that contracts
23
between the Defendants are not. This is yet another improper attempt to use a motion
24
in limine to seek summary judgment or summary adjudication on an issue. (Clemens
25
v. American Warranty Corp. (1987) 193 Cal.App.3d 444, 451.) It should be denied on
26
that basis alone.
27
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PAGE 17
1 But it is also clear that the facts Plaintiffs are asking the Court to establish as
2 indisputable are heavily disputed. The operating agreements Plaintiffs are seeking to
3 enforce are unsigned. They purport to be operating agreements for entities that never
4 existed. They do not list most of the Plaintiffs or the amounts of their investments the
5 Plaintiffs assert are correct. There is written evidence that some of the Plaintiffs
6 refused to sign them without revisions. And several Plaintiffs testified that they
7 refused to agree those operating agreements. Other Plaintiffs never even saw those
8 operating agreements.
9 Meanwhile, the operating agreements to which Paramont Woodside and SVRV
10 are parties—which Plaintiffs want the Court to declare are invalid—contain all
11 accurate and relevant terms and are signed by the parties to them.
12 Defendants believe that it is doubtful that Plaintiffs can convince the jury that
13 the operating agreements they allege are valid contracts between the purported
14 parties. And there is strong evidence supporting the validity of the signed agreements
15 alleged by the Defendants. These fact issues are central to many of Plaintiffs claims
16 and the liability of many of the Defendants. But regardless of what the jury decides,
17 there is simply no basis to declare that the operating agreements alleged by Plaintiffs
18 are the only valid agreements as a matter of law. Doing so would be legally improper
19 and render any verdict the jury would reach subject to reversal. There is no basis for
20 the Court to grant the motion.
21 IV. CONCLUSION
22 For the foregoing reasons, the Court should deny Plaintiffs’ Motions in Limine
23 Nos. 3, 4, 5, 6, 7, 9, 10, and 11.
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PAGE 18
1 Dated: March 4, 2024 SPENCER FANE LLP
2 By: /s/ Jessica E. Chong
Brian Zimmerman (admitted pro hac
3 vice)
Nicholas Reisch (admitted pro hac
4 vice)
Jessica E. Chong (SBN 317869)
5 SPENCER FANE LLP
3040 Post Oak Blvd., Suite 1400
6 Houston, TX 77056
7 and
8 Ernesto F. Aldover, Esq.
RETZ & ALDOVER, LLP
9 2550 Via Tejon, Suite 3A
Palos Verdes Estates, CA 90274
10 Attorneys for Defendants
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PAGE 19
1 PROOF OF SERVICE
2
STATE OF NEVADA, COUNTY OF CLARK
3
I am employed in the county of Las Vegas State of Nevada. I am over the age of 18
4 and not a party to the action; my business address is 300 S. Fourth Street, Suite 950
Las Vegas, NV 89101.
5
6 On March 4, 2024, I served the foregoing document(s) described as PARAMONT
DEFENDANTS’ OMNIBUS OPPOSITION TO PLAINTIFFS’ MOTIONS IN
7 LIMINE NOS. 1-12 as follows:
8 Collin J. Vierra (State Bar No. 322720) Ryan van Steenis (S.B. #254542)
EIMER STAHL LLP 1601 S Shepherd Dr., #276
9 99 Almaden Blvd., Suite 641 Houston, Texas 77019
rjvansteenis@gmail.com
San Jose, CA 95113-1605 ATTORNEY FOR DEFENDANTS
10
Telephone: (408) 889-1668 DAVID M. BRAGG AND SILICON
11 Email: cvierra@eimerstahl.com VALLEY REAL VENTURES, LLC
12 Attorney for Plaintiffs
13
_ (BY US MAIL) As follows: I am “readily familiar” with the firm’s practice of
14 collection and processing correspondence for mailing. Under that practice it would be
deposited with the U.S. Postal Service on that same day with postage thereon fully
15 prepaid at Palos Verdes Estate, CA in the ordinary cause of business. I am aware
16 that on motion of the party served, service is presumed invalid of postal cancellation
date or postage meter is more than one day after date of deposit for mailing an
17 affidavit.
18 _X_ (BY ELECTRONIC SERVICE) I electronically served the foregoing document(s)
19 on opposing counsel via electronic mail.
20 X (STATE) I declare under penalty of perjury under the laws of the State of
Nevada that the foregoing is true and correct.
21
22 Executed on March 4, 2024 at Las Vegas, Nevada.
23 /s/ Adam Miller
Adam Miller
24
25
26
27
28
Preview
1 Brian Zimmerman (admitted pro hac vice) Nicholas Reisch (admitted pro hac vice) 2 Jessica E. Chong (SBN 317869) SPENCER FANE LLP 3 3040 Post Oak Blvd., Suite 1400 Houston, TX 77056 4 (713) 552-1234 telephone 5 Ernesto F. Aldover (SBN 157625) RETZ & ALDOVER, LLP 6 2550 Via Tejon, Suite 3A Palos Verdes Estates, California 90274 7 (310) 540-9800 telephone 8 Attorneys for Defendants SVRV 385 Moore, LLC; SVRV 387 Moore, LLC; 9 Gregory J. Davis; Kevin Wolfe; Jason Justesen; Paramont Woodside, LLC; Paramont Capital, 10 LLC; Monks Family Trust; TEH Capital, LLC; Caproc III, LLC; WZ Partners LLC; McLan 11 Trust; Wild Rose Irrevocable Trust; Black Horse Holdings, LLC; Phil Stoker; Diane 12 Stoker; Scott O’Neil; and Dale Huish 13 SUPERIOR COURT OF THE STATE OF CALIFORNIA 14 COUNTY OF SAN MATEO 15 16 Robert Arntsen; Mary Lee; Arntsen Case No. 22-CIV-01148 consolidated Family Partnership, LP; and Brian with Case No. 22-CIV-01099 17 Christopher Dunn Custodianship; PARAMONT DEFENDANTS’ 18 Plaintiffs, OMNIBUS OPPOSITION TO PLAINTIFFS’ MOTIONS IN 19 -vs- LIMINE NOS. 1-12 20 David M. Bragg; Kurtis Stuart Kludt; Silicon Valley Real Ventures, LLC; SVRV Honorable Jeffrey Finigan 21 385 Moore, LLC; SVRV 387 Moore, LLC; Dept: 24 Gregory J. Davis; Kevin Wolfe; Jason 22 Justesen; Paramont Woodside, LLC; and Paramont Capital, LLC; 23 Defendants. 24 25 26 27 28 PAGE 1 1 John Ho and Quanyu Huang; 2 Plaintiffs, 3 -vs- 4 David M. Bragg; Silicon Valley Real Ventures, LLC; SVRV 385 Moore, LLC; 5 SVRV 387 Moore, LLC; Gregory J. Davis; Kevin Wolfe; Jason Justesen; Paramont 6 Woodside, LLC; Paramont Capital, LLC; Monks Family Trust; TEH Capital, LLC; 7 Caproc III, LLC; WZ Partners LLC; McLan Trust; Wild Rose Irrevocable 8 Trust; Black Horse Holdings, LLC; Phil Stoker; Diane Stoker; Scott O’Neil; and 9 Dale Huish; 10 Defendants. 11 12 I. INTRODUCTION 13 On February 19, 2024, Plaintiffs filed motions in limine (“MIL”) seeking to 14 exclude twelve (12) broad categories of evidence. As a preliminary matter, the 15 Defendants other than Bragg and SVRV do not oppose motion numbers 1, 2, 8, and 16 12. Bragg and SVRV will separately oppose some of those motions. 17 But all Defendants oppose Plaintiffs’ Motions in Limine Nos. 3, 4, 5, 6, 7, 9, 10, 18 and 11. The subject of those motions are as follows: 19 Motion in limine number 3 seeks to exclude any evidence, testimony, or 20 argument that Paramont Defendants did not receive the file bearing the title “Detail Inv Spent” and bates number Davis000494 in July or August 2019; 21 Motion in limine number 4 seeks to exclude all deposition answers to which 22 changes were timely made through errata or questions about the same; 23 Motion in limine number 5 seeks to exclude all evidence or testimony relating to Plaintiffs’ prior or current ownership of real estate or investment in any real 24 estate project, except those managed by any of the defendants; 25 Motion in limine number 6 seeks to exclude all evidence or testimony relating to Plaintiffs’ financial condition; 26 Motion in limine number 7 seeks to exclude all evidence, testimony, and 27 argument as to whether any plaintiff was an accredited investors; 28 PAGE 2 Motion in limine number 9 seeks to exclude any evidence, testimony, or 1 argument by Bragg or SVRV that is contrary to the well-pleaded allegations contained in Plaintiffs’ original complaint dated March 15, 2022. 2 Motion in limine number 10 seeks to exclude any evidence, testimony, or 3 argument relating to Plaintiffs’ relationship or communications with their attorneys; 4 Motion in limine number 11 seeks to exclude any evidence, testimony, or 5 argument that operating agreements other than the effective operating agreements existed prior to or at the time of incorporation of the Moore Road 6 LLCs. 7 The basis for Plaintiffs’ motions is two-fold: (1) the evidence, testimony, and/or 8 arguments are not relevant and (2) they are more prejudicial than probative. 9 Plaintiffs’ arguments fail for the reasons described in detail below. 10 II. LEGAL STANDARD 11 California courts take a broad view of relevancy of evidence. (Ruiz v. Minnesota 12 Mining & Manufacturing Co. (1971) 15 Cal.App.3d 462, 467.) Relevant evidence 13 “means any evidence having a rational tendency to prove or disprove any disputed fact 14 that is of consequence to the determination of the action.” (Id.) Thus, where evidence 15 is offered to render the desired inference more probable that it would be without the 16 evidence, that evidence is considered to be relevant. (Id. at 467-468, n. 3.) Moreover, 17 under Evidence Code section 351, all relevant evidence is admissible unless otherwise 18 provided by statute. Evidence Code Section 352 grants courts the discretion to exclude 19 evidence where its “probative value is substantially outweighed by the probability 20 that its admission will (a) necessitate undue consumption of time or (b) create 21 substantial danger of undue prejudice, of confusing the issues, or of misleading the 22 jury. 23 III. ARGUMENT 24 A. MIL No. 3 improperly and unjustifiably asks the Court to declare a 25 disputed fact as true based on unwarranted supposition. 26 In reality, MIL No. 3 is not a motion in limine at all, but a disguised motion for 27 summary judgment in which Plaintiffs improperly ask the Court to make a factual 28 finding that is within the province of the jury to decide. It is improper to use a motion PAGE 3 1 in limine to seek a summary judgment or summary adjudication on an issue. (Clemens 2 v. American Warranty Corp. (1987) 193 Cal.App.3d 444, 451.) The reasons are 3 numerous. Motions in limine do not have the procedural protections put in place for 4 summary adjudication to ensure parties have sufficient time to respond. They also do 5 not have evidentiary requirements or clear burdens of proof to ensure that a fact issue 6 is not improperly taken away from the jury. In addition, the circumstances of this case 7 make this improper request even more problematic given that it was the Plaintiffs 8 that chose to seek a preferential trial setting knowing that it would preclude motions 9 for summary judgment. The mere fact that MIL No. 3 is an improper motion for 10 summary judgment is a sufficient basis to deny it. 11 But even ignoring the procedural deficiencies, the relief sought in MIL No. 3 is 12 not justified. Defendants Davis, Paramont Woodside, and Paramont Capital do not 13 contest that they did, at some point, receive the Excel spreadsheet bearing the title 14 “Detail Inv Spent” (bates labeled Davis000494). However, they do dispute that they 15 received this document in “July or August 2019” as Plaintiffs claim. And many of the 16 other defendants—the investors in Paramont Woodside—dispute ever receiving the 17 spreadsheet. It simply is not something it would ever make sense for them to receive. 18 Further, despite Plaintiffs’ contentions to the contrary, this issue has not been 19 sufficiently established such that exclusion of “any evidence, testimony, or argument” 20 on this issue is proper. The evidence referenced in Plaintiffs’ motion in limine does not 21 “prove” otherwise. At most, the evidence proffered by Plaintiffs shows that: (1) on July 22 29, 2019, and again on August 15, 2019, Lukas Leuthold sent Paramont Defendants 23 an email with a link to a certain Google Drive folder; (2) the link and folder are still 24 active; (3) as of today, a different document resembling the Spreadsheet is available in 25 the folder; and (4) data from this different document indicates that it was first 26 uploaded to the folder on August 15, 2019. From this, Plaintiffs surmise that 27 28 PAGE 4 1 “evidently” the spreadsheet had been uploaded to the folder at some earlier point, 2 downloaded by Paramont, and then replaced by the “resembling” document. 3 Even if the facts as Plaintiffs state them are accepted as true, their conclusion 4 does not follow. It simply cannot be presumed from these facts—i.e., from the existence 5 of a similar (but different) document in an online folder almost five years after the 6 time-period in question—that, in 2019, Paramont Defendants accessed and 7 downloaded the spreadsheet from that same online folder. Indeed, Plaintiffs’ 8 assumption that the spreadsheet was ever uploaded to the folder is pure speculation. 9 Once again, this is a disputed issue for the jury to decide. Defendants Davis, 10 Paramont Woodside, and Paramont Capital acknowledge that they did come into 11 possession of the spreadsheet at some point and did produce the spreadsheet as part 12 of discovery in this case. But they do not concede that they received this document in 13 the time period claimed by Plaintiffs. And Paramont Investors do not even admit to 14 receiving the document at all. 15 Plaintiffs are free to present evidence supporting their claim at trial for the jury 16 to evaluate. But the evidence simply does not render their assertion “undisputable” 17 even setting aside the impropriety of the disguised motion for summary judgment. 18 There is basis to exclude evidence, testimony, or argument on this issue. 19 B. MIL No. 4 improperly seeks to exclude deposition answers changed 20 through errata or questions about those answers. 21 Almost two months after the depositions of Mary Lee, Martha Dunn, and Robert 22 Arnsten, these witnesses submitted extensive errata sheets making a total of 191 23 changes to their testimonies: 25 for Lee, 61 for Dunn, and 105 for Arnsten. These 24 changes go beyond correcting typographical or transcribing errors. Instead, many of 25 the errata substantially recast or outright contradict their previous answers. Consider 26 the following examples: 27 28 PAGE 5 1 Mary Lee 2 Page/Line Original Answer Errata Sheet Answer 3 40:17 Yes, we didn’t agree I am not sure. to it. 4 45:25 No. Yes, as I said earlier, I believed 5 we were on the same page even 6 though I never got a document to sign. 7 78:11 I am sure. I am not sure. 8 9 (Lee Errata Sheet, Ex. 1.) 10 11 Martha Dunn 12 Page/Line Original Answer Errata Sheet Answer 13 132:20 No. Yes. Dave told us we were members in the Moore Road LLCs 14 in emails. 15 140:3 No. Yes, I think our email 16 communications reflect our understanding that we had an 17 agreement and that we were members in the Moore Road 18 LLCs. 19 227:25 correct Incorrect 20 21 (Dunn Errata Sheet, Ex. 2.) 22 23 Robert Arnsten 24 Page/Line Original Answer Errata Sheet Answer 25 107:17-18 No, there was no Yes, the terms in the February document that I 2018 operating agreements. We 26 agreed with. would have signed those once the LLCs were completed as they 27 stood with the names and account 28 PAGE 6 1 numbers for the accounts for each piece of property. 2 108:5 Correct. Incorrect. We agreed to the terms 3 only in the February 2018 operating agreements. 4 249:10-11 I would say true, we We did have an agreement, but 5 never came to a real then he violated it and never gave agreement. us the final documents to sign. 6 7 (Arntsen Errata Sheet, Ex. 3.) 8 The California Code of Civil Procedure gives deponents thirty days from the 9 date a deposition is transcribed to change answers. (Civ. Proc. Code § 2025.520.) 10 Afterward, the deposition officer notes the errata by the deponent (Id.) Plaintiffs argue 11 that section 2025.520 states that an errata sheet effectively expunges the deponents’ 12 original answers from the record and renders them inadmissible for all purposes. But 13 nothing in section 2025.520 mandates this result. Rather, 2025.520 merely requires 14 the deposition officer to “indicate on the original of the transcript . . . any action taken 15 by the deponent”. (Id.) (emphasis added). Nothing in the statute indicates that the 16 prior answers are expunged or legally cease to exist. Indeed, section 2025.520’s 17 directive that revisions be “indicated on” the transcript implies that the original 18 answers will remain. See Lugtig v. Thomas, 89 F.R.D. 639, 641-42 (N.D. Ill. 1981) 19 (Similar federal instruction implies that original answers remain and “the original 20 answer to the deposition questions [. . .] can be read at the trial.”); accord Podell v. 21 Citicorp Diners Club, Inc., 112 F.3d 98, 103 (2d Cir. 1997).1 22 “A deposition is not a take home examination,” and rules permitting errata do 23 not give a deponent carte blanche to change their testimony without repercussion. 24 Greenway v. Int'l Paper Co., 144 F.R.D. 322, 325 (W.D. La. 1992); accord Hambleton 25 Bros. Lumber Co. v. Balkin Enterprises, Inc., 397 F.3d 1217, 1225 (9th Cir. 2005). 26 27 1Because section 2025.520 is substantially similar in word and purpose to Rule 30(e) of the Federal Rules of Civil Procedure, federal decisions are useful authority on interpretation for 28 California courts. (In re Joyner (1989) 48 Cal.3d 487, 492–493.) PAGE 7 1 Otherwise, “one could merely answer the questions with no thought at all then return 2 home and plan artful responses.” Id. Indeed, the “majority approach” among federal 3 courts is to treat “[t]he fact and extent of the change[s]” to a deponent’s testimony “as 4 subjects for impeachment[.]” E.E.O.C. v. J.H. Walker, Inc., No. CIV.A.H-05-2232, 2007 5 WL 172626, at *11 (S.D. Tex. Jan. 18, 2007). The policy behind this approach is 6 straightforward: 7 [T]he cross-examiner and the jury are likely to be keenly interested in 8 the reasons [the deponent] changed his testimony. There is no apparent reason why the witness who changes his mind between the giving of the 9 deposition and its transcription should stand in any better case. The Rule is less likely to be abused if the deponent knows that [. . .] the original 10 answers as well as the changes and the reasons will be subject to 11 examination by the trier of fact. 12 Lugtig, 89 F.R.D. at 642 (internal quotations omitted). 13 For this reason, California courts hold that witnesses may be cross-examined 14 on revisions to their testimony. (George v. Double-D Foods, Inc. (1984) 155 Cal.App.3d 15 36, 45.) Indeed, Lewis concluded it would be error not to allow a party to read the 16 original deposition answers and cross-examine the witnesses regarding them. (Lewis 17 v. Western Truck Line (1941) 44 Cal.App.2d 455, 461.) 18 Plaintiffs also argue that the risk of unduly consuming the court and jury’s time 19 outweighs the probative value of Lee, Dunn, and Arntsen’s original testimony. But 20 Plaintiffs’ argument is premised on their counsel raising objections to the use of such 21 original deposition testimony. The fact that a trial will be delayed by party’s self- 22 interested assertion of objections is not a valid basis to exclude evidence. That is 23 particularly true when, as here, such objections are legally frivolous. 24 Plaintiffs also complain that there is a risk of confusing or misleading the jury 25 by having to explain the reasons for the changed testimony. But such an argument 26 does not make any sense. It has always been the exclusive role of a jury to weigh 27 “contradictions between a witness’s testimony and his or her prior statements” and to 28 PAGE 8 1 determine “which, if any, of a witness’s assertions are credible.” (Lobo v. Tamco (2014) 2 230 Cal.App.4th 438, 445.) Untangling the obscurities of conflicting testimony is part 3 and parcel of “the jury’s duty to assess witness credibility,” (Moran v. Foster Wheeler 4 Energy Corp. (2016) 246 Cal.App.4th 500, 518.) 5 In addition, Plaintiffs’ concern over the risk of “extended redirect” is unfounded 6 because this same risk exists for all types of impeachment evidence. The entire 7 purpose of redirect examination is to “explain or rebut adverse testimony or inferences 8 developed on cross-examination, and to rehabilitate a witness whose credibility has 9 been impeached.” (People v. Cleveland (2004) 32 Cal.4th 704, 745.) 10 Lastly, Plaintiffs stress the deponents’ age and recent hospitalizations, 11 presumably imply that it would be unfair to hold them to their original testimony. But 12 there is no basis in the law for this argument. Moreover, each of the deponents 13 expressly testified that any health issues did not make them unable to proceed with 14 their deposition. (Lee Depo., Ex. 4 6:18-7:4, 11:23-12; Dunn Depo., Ex. 5 7:20-9:3; 15 Arntsen Depo., Ex. 6 10:7-10:10, 11:10-11:17, 12:15-13:4.) In fact, Arnsten—who had 16 by far the most deposition changes—testified that (1) he did not suffer any cognitive 17 deficits or memory loss as a result of the stroke, and (2) a neurologist did not identify 18 any cognitive deficits. (Arntsen Depo., Ex. 6 21:12-15; 21:24-22:1). If Plaintiffs believe 19 that Lee, Dunn, and Arntsen’s health problems (or other factors) are to blame for their 20 changing testimony, they are free to offer that explanation to the jury, but this is not 21 a basis for limiting cross-examination. 22 In the alternative, Plaintiffs’ improper errata sheets should be stricken. 23 Plaintiffs’ motion is nothing more than a pretext because Plaintiffs and/or their 24 counsel are well aware that their errata sheets are improper sham erratas. 25 Consequently, Defendants seek to strike the Plaintiffs’ improper errata 26 sheets. Courts routinely reject “sham” corrections to deposition testimony – 27 corrections that are not “limited to corrections or stenographic errors” and that are 28 PAGE 9 1 “used to alter deposition testimony provided under oath and correctly transcribed.” 2 Moriarty v. Am. Gen. Life. Ins. Co., 2018 WL 4628365, at *2 (S.D. Cal. Sept. 27, 2018) 3 (citation omitted; emphasis added); see also Hambleton Bros., 397 F. 3d at 1225-26 4 (striking changes that were contradictory, not corrective); Greer v. Pac. Gas & Elec. 5 Co., 2017 WL 2389567, at *1 (E.D. Cal. June 1, 2017) (striking errata that improperly 6 attempted to substantively alter sworn testimony); ViaSat, Inc., v. Acacia Commc’ns, 7 Inc., 2018 WL 899250, at *3 (S.D. Cal. Feb. 15, 2018 (holding same). 8 As one court aptly put it: 9 [T]o survive, the errata must, at minimum, still be “corrective,” targeted at ameliorating some defect, not new and more “artful responses” to 10 questions previously propounded. Logically, errata that “materially change[s] the answers,” and “represent[s] lawyerly fixing of potentially 11 problematic testimony” cannot be so classified. 12 Blair v. CBE Grp. Inc., 2015 WL 3397629, at *6 (S.D. Cal. May 26, 2015) (internal 13 citations omitted). The “rewriting of sworn testimony…is not a legitimate purpose of 14 errata submitted…” In re Cathode Ray Tube (CRT) Antitrust Litig., 2014 WL 15 12647874, at *2 (N.D. Cal. Dec. 12, 2014). 16 There are clear policy reasons for courts to prohibit these types of changes. 17 To allow such changes would eliminate the purpose of deposition testimony, which is to elicit a witness’s testimony under oath, in a 18 recorded setting, subject to questioning without coaching from any other person. These errata sheets are not deposition testimony and 19 should not be considered when evaluating such testimony…their deposition testimony remains what was said at 20 their depositions. Greer, 2017 WL 2389567, at *7 (emphasis added); Blair, 2015 WL 3397629, at *10 (“The purpose of depositions is to 21 determine the facts of the case while the witness is under the scrutiny of examination. The purpose is certainly not to find out how the witness 22 answers questions with the ability to calmly reflect on the response for 30 days in collaboration with counsel.”). 23 24 Plaintiffs have not offered, and cannot offer, any legitimate purpose or reason as to 25 replacing their prior sworn deposition testimony with their errata, and consequently, 26 this Court should strike the errata all together. 27 C. MIL No. 5 improperly seeks exclude evidence of Plaintiffs’ prior real estate and investment experience relevant to Plaintiffs’ claims. 28 PAGE 10 1 Reasonable reliance on an alleged misrepresentation, concealment, or false 2 promise, has long been an element of such fraud claims. (Lingsch v. Savage (1963) 213 3 Cal.App.2d 729, 737–739.) In Wagner v. Benson, the appellate court concluded that 4 evidence of a plaintiff’s past investments was relevant and properly admitted by the 5 trial court. (Wagner v. Benson, (1980) 101 Cal.App.3d 27, 36.) Wagner explained that 6 “plaintiffs’ reasonable reliance on the alleged misrepresentation is an essential 7 element of fraud...and [that] reliance may be demonstrated to be unreasonable in light 8 of plaintiffs’ intelligence and experience.” (Id.) (citations omitted). 9 Here, the Plaintiffs have accused the Defendants of numerous legal theories of 10 of fraud based on multiple different alleged misrepresentations, concealments, and 11 false promises. The law clearly makes reasonable reliance an element of each such 12 claim. Like the plaintiff in Wagner, Plaintiffs are seeking to exclude evidence of their 13 past business ventures and experience. The Plaintiffs’ knowledge and sophistication 14 gained through ownership of real estate and investment in any real estate project is 15 undoubtedly relevant to this action, which deals with investments and ownership of 16 real estate properties. 17 For example, the Arntsen Plaintiffs (Arntsen, Lee, and Dunn) are sophisticated 18 real estate investors who, for more than two decades, have owned more than twenty 19 (20) single family homes in Dallas, Texas, through a limited partnership for which 20 they are members. As members of that partnership, they received K-1s, which is a 21 yearly tax document that is used for business partnerships to report to the IRS. 22 Arntsen even received K-1s from Defendant SVRV for prior investments. Although 23 Plaintiffs knew that K-1s were provided to members, based on their experience as 24 members of their family’s partnership, they did not receive any in relation to the 25 Moore Road project. Plaintiffs Ho and Huang have similar investment experience. 26 Plaintiffs allege, among other things, that they were defrauded into believing 27 they were members of SVRV 385 Moore and SVRV 387 Moore. But their prior 28 PAGE 11 1 investment experience is directly relevant as to whether they could have reasonably 2 relied on any such representations. 3 Additionally, the probative value of this evidence would not be substantially 4 outweighed by undue prejudice because there is no prejudice to Plaintiffs. Asking 5 questions directly related to Plaintiffs’ own experience, qualities that are 6 transferrable to how they conducted their investment in this case, does not indicate 7 that Plaintiffs are “independently wealthy.” For all the jury knows, Plaintiffs can be 8 taking a loss every year on their investment(s). The fact that someone owns property 9 does not equate to being independently wealthy—it simply means that they own 10 property and have experience with owning property. And regardless, evidence directly 11 relevant to an element of a Plaintiffs’ cause of action cannot be excluded because it is 12 “prejudicial.” If that were the standard, no evidence could ever be admitted because it 13 would necessarily be prejudicial to one party or the other. 14 MIL No. 5 should be denied as unjustified and inconsistent with California law. 15 D. MIL No. 6 seeking to exclude evidence of Plaintiffs’ financial condition is improper because such evidence is relevant to Plaintiffs’ claims. 16 17 Without specifying precisely what type of evidence Plaintiffs seek to exclude, 18 they seek a broad prohibition on evidence of “Plaintiffs’ financial condition.” It is 19 unclear where the desired boundaries of exclusion exist. Presumably, Plaintiffs simply 20 want to a ruling from the Court excluding any such evidence Defendants wish to 21 admit, while not restricting Plaintiffs. Such a broad exclusion of evidence would likely 22 hamstring Defendants’ ability to put on their case and respond to evidence introduced 23 during the trial. Testimony at trial “sometimes defies pretrial predictions,” and events 24 at trial “may change the context in which the evidence is offered.” (Kelly v. New W. 25 Fed. Sav. (1996) 49 Cal.App.4th 659, 671.) Plaintiffs’ motion, if granted, would exclude 26 a broad swath of potentially highly probative evidence before it is even known how 27 such evidence might be used in the context of the trial. The undefined boundaries of 28 PAGE 12 1 the motion should be enough basis on its own to deny it. 2 Nonetheless, the motion should also be denied because Plaintiffs’ financial 3 condition cannot be separated from their experience and sophistication relating to 4 prior investments, which is relevant to Plaintiffs’ fraud claim as demonstrated above. 5 Further, Plaintiffs’ financial condition is also likely to be relevant to whether 6 their prior material breach of the requirement to make capital calls to cover loan 7 payments for the Moore Road properties precludes contract liability for the operating 8 agreements alleged by Plaintiffs. Under the operating agreements Plaintiffs allege 9 exist, they were required to contribute additional funds for capital calls requested by 10 SVRV. SVRV made such a capital call when it ran out of funds to pay the loan for the 11 Moore Road properties. After covering one such loan payment, Plaintiffs refused to 12 pay any more, risking foreclosure and loss of everyone’s investment. Plaintiffs’ ability 13 to make additional such payments (i.e. their financial condition) is directly relevant 14 to this issue, which Plaintiffs need to overcome to prevail on breach of contract. 15 In addition, part of the defense offered by Defendants is that Plaintiffs are 16 sophisticated investors that simply lost money on a risky investment while 17 understanding the risks, rather than being defrauded. Defendants cannot do so 18 without addressing Plaintiffs’ “financial condition.” 19 Moreover, evidence of Plaintiffs’ financial condition will likely go to Plaintiffs’ 20 credibility. (See Evid. Code, § 210 (“relevant evidence” includes “evidence relevant to 21 the credibility of a witness”).) Plaintiffs will undoubtedly attempt to argue or sway the 22 jury’s opinions by painting themselves as destitute elderly persons and immigrants 23 who got swindled out of their life’s savings—when the evidence is to the contrary. 24 Evidence disproving such assertions is explicitly permissible. (See, e.g., Evid. Code, § 25 780, subd. (f).) 26 The probative value of admitting Plaintiffs’ financial condition is not 27 outweighed by undue prejudice because there is no prejudice to Plaintiffs. Any 28 PAGE 13 1 “concern” that Plaintiffs may have about a jury not awarding monetary damages due 2 to their “independent wealth” can easily be vetted during voir dire. On the other hand, 3 there would be prejudice to Defendants if a motion in limine inhibits their ability to 4 present relevant evidence to their defenses or refute any evidence presented by 5 Plaintiffs regarding their “financial condition.” The motion should be denied. 6 E. MIL No. 7 seeking exclusion of evidence of Plaintiffs’ status as accredited investors is similarly improper because such evidence is 7 relevant to Plaintiffs’ claims. 8 “Accredited investor” is defined as, among other things, “any person who, on 9 the basis of such factors as financial sophistication, net worth, knowledge, and 10 experience in financial matters, or amount of assets under management qualifies as 11 an accredited investor under rules and regulations which the Commission shall 12 prescribe.” Morello v. White, No. CV1604440DMGAJW, 2017 WL 4404306, at *2 (C.D. 13 Cal. Sept. 5, 2017), report and recommendation adopted, No. CV 16-4440 DMG (AJW), 14 2017 WL 4355893 (C.D. Cal. Sept. 27, 2017). “The accredited investor definition 15 attempts to identify those persons whose financial sophistication and ability to sustain 16 the risk of loss of investment or ability to fend for themselves render the protection of 17 the Securities Act's registration process unnecessary.” Id. at *2. 18 Establishing an investor’s “accredited investor” status is an approach taken by 19 numerous businesses seeking to comply with securities laws. And Bragg and SVRV 20 do so in this case when soliciting investments from the Plaintiffs. Indeed, the 21 documents on which the Plaintiffs’ purport to base their claims include assertions by 22 each of them that they are accredited investors. 23 Without explicitly acknowledging it, Plaintiffs are apparently asking this Court 24 to redact or outright exclude documents they reviewed as part of their review of 25 investments in the Moore Road properties, documents that could not be more central 26 to all the Plaintiffs’ claims. 27 28 PAGE 14 1 Moreover, each Plaintiff’s accredited investor status is clearly relevant to the 2 reasonable reliance element of their fraud claims and admissible as demonstrated 3 above. As stated in Paramont Defendants’ opposition to Plaintiffs’ motion in limine 4 number 5 and 6, Plaintiffs’ “experience” and “financial condition” is relevant, and it is 5 directly tied to the definition of an accredited investor. 6 By attempting to exclude any evidence related to Plaintiffs being accredited 7 investors, they appear to be trying to rewrite history and portray themselves as 8 unsophisticated investors, who simply handed over their money with no knowledge or 9 no-how, and got taken advantage of and then asking the Court to bar Defendants from 10 contradicting this alternate version of reality. This is not a valid basis for a motion in 11 limine. 12 Additionally, the probative value is not outweighed by any potential prejudice 13 because Plaintiffs can easily explain what being an “accredited investor” means to 14 them and it would be up to the jury to determine how much “special import” the term 15 carries. The Court should deny Plaintiffs’ attempt to exclude relevant evidence. 16 F. MIL No. 9 seeking exclusion of evidence by Bragg or SVRV that is contrary to Plaintiffs’ original complaint is improper. 17 18 Plaintiffs argue that no evidence by Bragg or SVRV should be admitted 19 because, at one point in the suit, Bragg and SVRV were defaulted. But by failing to 20 accomplish entry of a default judgment and filing two amended complaints, Plaintiffs 21 have waived any right to rely upon that prior default. Indeed, Bragg and SVRV filed 22 answers to the Second Amended Complaint, which Plaintiffs did not make any effort 23 to strike or otherwise set aside. Nor have Plaintiffs explained why they continued to 24 act as if Bragg and SVRV were non-defaulting defendants in this case if they believed 25 they had defaulted and conceded liability. 26 Plaintiffs did not pursue the prior purported default both because they knew 27 just efforts would not be successful and because they do not actually want default 28 PAGE 15 1 judgments against Bragg and SVRV. In reality, Plaintiffs are seeking to obtain a 2 judgment on the merits against Bragg and SVRV that would have findings that might 3 preclude Bragg from receiving a discharge of his debts in bankruptcy. Plaintiffs actual 4 goal is to receive “a judgment on the merits” without having to prove their case against 5 Bragg and SVRV on the merits. They should not be allowed to do so. Plaintiffs have 6 long treated Bragg and SVRV as non-defaulting defendants. They should not be 7 allowed to alter their prior position and indirectly seeking a default judgment against 8 them. 9 Moreover, the other Defendants are opposed to this relief not simply because it 10 is unjustified and improper against Bragg and SVRV, but because Plaintiffs might 11 also seek to somehow use it against them by prohibiting the other Defendants from 12 offering testimony or other evidence. 13 Plaintiffs have chosen a trial on the merits against Bragg and SVRV, rather 14 than attempting to obtain a default judgment. They should not be permitted to change 15 that choice on the eve of trial and indirectly obtain a default judgment while 16 pretending it is a judgment on the merits. 17 G. MIL No. 10 improperly seeks to prevent Defendants from presenting 18 valid impeachment evidence and argument. 19 Contrary to the suggestion of MIL No. 10, none of the Defendants are seeking 20 to delve into communications between Plaintiffs and their counsel. But the 21 Defendants do seek to be able to offer evidence and argument that many Defendants 22 have been targeted as “wrongdoers” despite the Plaintiffs not having any factual basis 23 to do so based on tactical considerations of Plaintiffs’ counsel. No privilege 24 communications will be involved. Merely relevant facts. Those facts include multiple 25 Plaintiffs’ testimony contrary to the allegations in their current pleading and 26 subsequent errata of that testimony based on … questionable explanations. 27 Indeed, the Plaintiffs have been unable to identify the factual basis for suing 28 PAGE 16 1 many of the Defendants (or even knowing who they are). For example, Martha Dunn 2 said she sued Gregory Davis solely because he signed a contract (to which she is not 3 an alleged party). (Dunn Depo., Ex. 5 97:9–12, 102:15–23, 103:4.) Even worse, Mary 4 Lee did not even realize she had sued Gregory Davis, much less what he did wrong. 5 (Lee Depo., Ex. 4 15:15–21, 16:2–13.) 6 Evidence that Plaintiffs do not know or understand why they brought claims 7 against several of the specific Defendants is relevant both in terms of the merits of 8 Plaintiffs’ claims against those Defendants and for purposes of Plaintiffs’ credibility. 9 Additionally, the probative value is not outweighed by any danger of unfair prejudice 10 or confusion because each Plaintiffs’ basic understanding of why suit was brought 11 against each Defendant—or lack of that understanding—is substantially probative of 12 the merits of Plaintiffs’ claims. If the jury is meant to understand the evidence against 13 these Defendants, then the Plaintiffs should be able to explain it to the jury. This is 14 particularly true given that Defendants were prevented by Plaintiffs’ preferential trial 15 request from potentially eliminating claims or Defendants through summary 16 judgment. 17 Plaintiffs should not be protected from such inquires under the guise of 18 protecting privilege communications, which are not actually the subject of the inquiry. 19 H. MIL No. 11 improperly seeks the Court to establish fact relating to Plaintiffs’ breach of contract claims as a matter of law despite 20 substantial disputes as to those facts. 21 Plaintiffs seek to have the Court to declare that the alleged contracts that 22 support one of their breach of contract claims are valid contracts and that contracts 23 between the Defendants are not. This is yet another improper attempt to use a motion 24 in limine to seek summary judgment or summary adjudication on an issue. (Clemens 25 v. American Warranty Corp. (1987) 193 Cal.App.3d 444, 451.) It should be denied on 26 that basis alone. 27 28 PAGE 17 1 But it is also clear that the facts Plaintiffs are asking the Court to establish as 2 indisputable are heavily disputed. The operating agreements Plaintiffs are seeking to 3 enforce are unsigned. They purport to be operating agreements for entities that never 4 existed. They do not list most of the Plaintiffs or the amounts of their investments the 5 Plaintiffs assert are correct. There is written evidence that some of the Plaintiffs 6 refused to sign them without revisions. And several Plaintiffs testified that they 7 refused to agree those operating agreements. Other Plaintiffs never even saw those 8 operating agreements. 9 Meanwhile, the operating agreements to which Paramont Woodside and SVRV 10 are parties—which Plaintiffs want the Court to declare are invalid—contain all 11 accurate and relevant terms and are signed by the parties to them. 12 Defendants believe that it is doubtful that Plaintiffs can convince the jury that 13 the operating agreements they allege are valid contracts between the purported 14 parties. And there is strong evidence supporting the validity of the signed agreements 15 alleged by the Defendants. These fact issues are central to many of Plaintiffs claims 16 and the liability of many of the Defendants. But regardless of what the jury decides, 17 there is simply no basis to declare that the operating agreements alleged by Plaintiffs 18 are the only valid agreements as a matter of law. Doing so would be legally improper 19 and render any verdict the jury would reach subject to reversal. There is no basis for 20 the Court to grant the motion. 21 IV. CONCLUSION 22 For the foregoing reasons, the Court should deny Plaintiffs’ Motions in Limine 23 Nos. 3, 4, 5, 6, 7, 9, 10, and 11. 24 25 26 27 28 PAGE 18 1 Dated: March 4, 2024 SPENCER FANE LLP 2 By: /s/ Jessica E. Chong Brian Zimmerman (admitted pro hac 3 vice) Nicholas Reisch (admitted pro hac 4 vice) Jessica E. Chong (SBN 317869) 5 SPENCER FANE LLP 3040 Post Oak Blvd., Suite 1400 6 Houston, TX 77056 7 and 8 Ernesto F. Aldover, Esq. RETZ & ALDOVER, LLP 9 2550 Via Tejon, Suite 3A Palos Verdes Estates, CA 90274 10 Attorneys for Defendants 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PAGE 19 1 PROOF OF SERVICE 2 STATE OF NEVADA, COUNTY OF CLARK 3 I am employed in the county of Las Vegas State of Nevada. I am over the age of 18 4 and not a party to the action; my business address is 300 S. Fourth Street, Suite 950 Las Vegas, NV 89101. 5 6 On March 4, 2024, I served the foregoing document(s) described as PARAMONT DEFENDANTS’ OMNIBUS OPPOSITION TO PLAINTIFFS’ MOTIONS IN 7 LIMINE NOS. 1-12 as follows: 8 Collin J. Vierra (State Bar No. 322720) Ryan van Steenis (S.B. #254542) EIMER STAHL LLP 1601 S Shepherd Dr., #276 9 99 Almaden Blvd., Suite 641 Houston, Texas 77019 rjvansteenis@gmail.com San Jose, CA 95113-1605 ATTORNEY FOR DEFENDANTS 10 Telephone: (408) 889-1668 DAVID M. BRAGG AND SILICON 11 Email: cvierra@eimerstahl.com VALLEY REAL VENTURES, LLC 12 Attorney for Plaintiffs 13 _ (BY US MAIL) As follows: I am “readily familiar” with the firm’s practice of 14 collection and processing correspondence for mailing. Under that practice it would be deposited with the U.S. Postal Service on that same day with postage thereon fully 15 prepaid at Palos Verdes Estate, CA in the ordinary cause of business. I am aware 16 that on motion of the party served, service is presumed invalid of postal cancellation date or postage meter is more than one day after date of deposit for mailing an 17 affidavit. 18 _X_ (BY ELECTRONIC SERVICE) I electronically served the foregoing document(s) 19 on opposing counsel via electronic mail. 20 X (STATE) I declare under penalty of perjury under the laws of the State of Nevada that the foregoing is true and correct. 21 22 Executed on March 4, 2024 at Las Vegas, Nevada. 23 /s/ Adam Miller Adam Miller 24 25 26 27 28