Document for ARNTSEN FAMILY PARTNERSHIP, LP, et al vs. GREGORY J DAVIS, et al

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                                1   Collin J. Vierra (State Bar No. 322720)
     EIMER STAHL LLP
 2   1999 S. Bascom Ave., Suite 1025
     Campbell, CA 95008
 3   Telephone: (408) 889-1668
 4   Email: cvierra@eimerstahl.com

 5   Attorney for Plaintiffs

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 7                     SUPERIOR COURT OF THE STATE OF CALIFORNIA
                                      COUNTY OF SAN MATEO
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      Robert Arntsen; Mary Lee; Arntsen Family        Case No. 22-CIV-01148
10    Partnership, LP; Brian Christopher Dunn         Consolidated with Case No. 23-CIV-01099
      Custodianship, John Ho, and Quanyu Huang;
11                                                    Date: March 11, 2024
12                   Plaintiffs,                      Time: 2:00 p.m.
      v.                                              Dept. 24
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      David M. Bragg; Silicon Valley Real Ventures    Date Action Filed: March 15, 2022
14    LLC; SVRV 385 Moore, LLC; SVRV 387
      Moore, LLC; Gregory J. Davis; Kevin Wolfe;      Hon. Jeffrey Finigan
15    Jason Justesen; Paramont Woodside, LLC;
16    Paramont Capital, LLC; Monks Family Trust;
      TEH Capital LLC; Caproc III, LLC; WZ            PLAINTIFFS’ OPPOSITION TO
17    Partners, LLC; McClan Trust; Wild Rose          DEFENDANTS DAVID M. BRAGG AND
      Irrevocable Trust; Black Horse Holdings,        SILICON VALLEY REAL VENTURES
18    LLC; Phil Stoker; Diane Stoker; Scott O’Neil;   LLC’S MOTION IN LIMINE
      Dale Huish; and DOES 1–20,
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20                   Defendants.

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                       PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION IN LIMINE
 1            Pursuant to the Court’s pre-trial order, Plaintiffs hereby submit this opposition to the

 2   motion in limine filed by David M. Bragg and Silicon Valley Real Ventures, LLC (“Defendants”):

 3      I.       Defendants’ Motion in Limine

 4            Defendants seek the exclusion of:

 5            1. Any evidence relating to Defendant Bragg’s income levels or net worth;

 6            2. Any evidence relating to any determinations of credibility by the Bankruptcy Court;

 7            3. Discovery sanctions in the amount of $15,000 issued by this Court;

 8            4. Surf Air.

 9      II.      Each of Defendants’ Requests is Unwarranted

10            Each of these requests should be denied for several independent reasons. As an initial

11   matter, Defendants’ motion in limine is improper because each request should be enumerated in a

12   separate motion with a caption that clearly sets forth the relief requested. Defendants’ motion in

13   limine improperly combines four separate requests into a single motion with a generic caption. But

14   even aside from this, the motion is meritless.

15               A.      The Evidence Sought to Be Excluded is Relevant to Bragg’s Credibility.
16            All the evidence that Bragg seeks to exclude is highly relevant to his credibility. The

17   Evidence Code expressly provides that “the court or jury may consider in determining the

18   credibility of a witness any matter that has any tendency in reason to prove or disprove the

19   truthfulness of his testimony at the hearing.” (Evid. Code § 780 [emphasis added].)

20            Item 2 is most obviously relevant to Bragg’s credibility: In January 2024, the Bankruptcy

21   Court stated unequivocally that Bragg “lacks all credibility” because Bragg repeatedly lied to the

22   Court under penalty of perjury. (In re David Matthew Bragg, No. 22-2700 (E.D. Cal. Jan. 2, 2024),

23   Dkt. 90.) Plainly, Bragg’s willingness to repeatedly lie to federal officers under penalty of perjury

24   is relevant to his “credibility [as] a witness,” and the jury should be entitled to know this

25   information in assessing the veracity of his testimony at trial.

26            Item 3 is similar; Bragg was sanctioned after thumbing his nose at his state-court discovery

27   obligations, including by intentionally spoliating all of his text messages more than 9 months after

28   this case began and making repeated false statements to the Court and the IDC Commissioner.

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                        PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION IN LIMINE
 1   (Order Imposing Sanctions (Sept. 15, 2023).) The Court found that Bragg committed at least five

 2   willful abuses of the discovery process. (Id.) Moreover, even California’s pre-approved CACI jury

 3   instructions allow the jury to be instructed on the adverse inferences that may be drawn from a

 4   party’s discovery abuses, demonstrating that such evidence is appropriate for the jury to hear as a

 5   matter of law. (See, e.g., CACI No. 204.) Bragg’s willful destruction of evidence and general

 6   disregard for his legal obligations thus plainly bear on his credibility.

 7           Item 1 also bears on Bragg’s credibility because Bragg has repeatedly lied about his income

 8   levels and net worth—including under penalty of perjury. Indeed, Bragg has repeatedly invoked

 9   his supposed insolvency as a reason why he should not have to participate in this litigation. And

10   at trial, he will likely invoke his bankruptcy as a reason why the jury should not find him liable.

11   Yet as Bragg has previously admitted—and as the Bankruptcy Court has determined—Bragg has

12   repeatedly lied about his income levels and net worth. That includes falsely reporting his income,

13   falsely reporting the ownership of assets, concealing assets, and claiming that assets were worth

14   far less than they are. In one particularly egregious case, Bragg repeatedly told the Bankruptcy

15   Court that his vintage Cadillac was worth only $7,500 so he could claim it as an exempt asset when

16   it was actually worth nearly $40,000. And just last Friday, Bragg claimed he could not afford a

17   $10,000 sanction even though he received a $38,000 check in January, only approximately $12,000

18   of which went to Plaintiffs to pay his overdue sanction. Bragg has not said where the remaining

19   $26,000 went. Bragg’s repeated false statements about his income and net worth are thus relevant

20   to his credibility.

21           Finally, Item 4 bears on Bragg’s credibility because while Bragg was telling his investors

22   (including Plaintiff Bob Arntsen) that he was using their funds to conduct real-estate operations,

23   he was actually misappropriating millions of dollars for his personal enrichment. Indeed, in his

24   own motion in limine, Bragg admits for the first time that he did use SVRV funds to subscribe to

25   Surf Air for $2,800 per month. Bragg previously denied all of the allegations in Plaintiffs’

26   complaint—including regarding his use of SVRV funds for a Surf Air subscription—but his

27   motion in limine finally admits that Plaintiffs’ allegation was correct. That is directly relevant to

28   Bragg’s credibility.

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                           PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION IN LIMINE
                B.      The Evidence Sought to Be Excluded is Relevant to Plaintiffs’ Request for
 1                      Punitive Damages.
 2          The evidence Bragg seeks to exclude is also relevant to Plaintiffs’ request for punitive

 3   damages—both whether they should be awarded, and if so, in what amount. Punitive damages may

 4   be awarded “for the sake of example and by way of punishing the defendant.” (Cal. Civ. Code

 5   § 3294.) They may be awarded where “the defendant has been guilty of oppression, fraud, or

 6   malice.” (Id.) A defendant’s financial condition is not just relevant, but arguably essential, to the

 7   jury’s award of punitive damages. (Farmers & Merchants Trust Co. v. Vanetik (2019) 33

 8   Cal.App.5th 638, 648; Adams v. Murakami (1991) 54 Cal.3d 105, 119.) So is the reprehensibility

 9   of a defendant’s conduct. (Nickerson v. Stonebridge Life Ins. Co. (2016) 5 Cal.App.5th 1, 26.)

10          Item 1 is one of the main factors that California courts have unanimously recognized to be

11   relevant, if not essential, to the punitive damages inquiry. Here, Plaintiffs’ request punitive damage

12   with respect to numerous causes of action—including those to which Bragg has substantially

13   admitted to the key facts. On this basis alone, this evidence should be admissible.

14          Items 2 and 3 are directly relevant to Plaintiffs’ punitive damages request because they

15   relate to the reprehensibility of Bragg’s conduct, including his willingness to destroy evidence and

16   lie to a federal judicial officer to evade liability. These facts should be factored into the jury’s

17   punitive damages analysis.

18          Item 4 is also relevant to Plaintiffs’ punitive damages request because it relates both to

19   Bragg’s financial condition and to the reprehensibility of his conduct: Bragg was misappropriating

20   money from his investors to live a life of luxury for years (up to and including the present),

21   including by availing himself of a private charter plane service that was also used by his friends

22   and family but which had no meaningful nexus to SVRV’s real-estate projects. The jury should

23   receive this information in assessing whether to award punitive damages and in what amount.

24              C.      Items 1 and 4 Are Directly Relevant to Plaintiffs’ Misappropriation
                        Claims.
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            Items 1 and 4 are also directly relevant to Plaintiffs’ misappropriation claims, which
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     undergird several of their causes of action for fraud, breach of fiduciary duty, breach of contract,
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     unjust enrichment, civil theft, and more.
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                       PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION IN LIMINE
 1           Plaintiffs allege that Bragg misappropriated Plaintiffs’ funds to live a luxury lifestyle—

 2   featuring a $12,000 per month mansion in Atherton, a personal boat and jet skis, pricey trucks and

 3   a vintage Cadillac, frequent overseas trips, and much more. Plaintiffs further allege that Bragg

 4   concocted a Ponzi scheme to pay for this luxury lifestyle.

 5           Item 1 is highly relevant to this allegation because while holding himself out as a real estate

 6   manager who took no management fees and only reaped benefits if the projects he managed were

 7   profitable for investors, Bragg was in fact using SVRV as a personal piggybank. Indeed, in this

 8   case, when Bragg could no longer deny that he misappropriated funds from SVRV, he claimed

 9   that he only did so “for survival”—but when pushed as to which funds he drew on “for survival,”

10   he refused to provide that information in direct violation of this Court’s sanctions order. (Order

11   Imposing Sanctions (Sept. 15, 2023); Order Imposing Sanctions (Feb. 23, 2024).) Plaintiffs should

12   thus also be allowed to introduce evidence relating to Bragg’s net worth and income because it is

13   relevant to their claims that he misappropriated millions of dollars of investor funds to fund his

14   lavish lifestyle.

15           Item 4 is also highly relevant to this allegation because it is a specific example of a luxury

16   expense that Bragg funded by misappropriating investor funds. In his motion in limine, Bragg

17   finally admits that he used $2,800 in SVRV funds per month to subscribe to Surf Air. Bragg

18   bizarrely claims this information is not relevant because he terminated his membership at the end

19   of 2017; Plaintiffs allege (and Bragg does not even dispute) that Plaintiff Bob Arntsen first invested

20   $152,500 with SVRV in January 2015 and was promised a 50% preferred return on his investment.

21   Bragg claims that $205,000 of Bob’s proceeds were rolled over into the Moore Road Project; if

22   that is true, Bob was still shorted $23,570 on his preferred return ($152,500 x 1.5 - $205,000). That

23   means that even setting aside Bragg’s other misappropriations, a mere 8.5 months of Bragg’s

24   unauthorized Surf Air subscription could account for the entirety of Bob’s fraudulently withheld

25   preferred return. Plaintiffs should be permitted to introduce evidence that rather than pay Bob the

26   preferred return he was owed, Bragg used Bob’s and/or other investors’ funds to pay for his

27   unauthorized Surf Air membership.

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                         PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION IN LIMINE
 1      III.      Conclusion

 2             Each of the items that Bragg seeks to exclude is relevant to this case in multiple respects,

 3   any one of which is sufficient for this Court to find that the evidence sought to be excluded should

 4   be admissible. Thus, the Court should deny Bragg’s motion in limine in its entirety.

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     Dated:      March 4, 2024                               By: ______________________
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                                                                 Collin J. Vierra
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                                                                 Attorney for Plaintiffs
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                         PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION IN LIMINE