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CUTAN
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO
Document Scanning Lead Sheet
Oct-15-2012 4:16 pm
Case Number: CGC-10-500934
Filing Date: Oct-15-2012 4:14
Filed by: VANESSA WU
Juke Box: 001 Image: 03802788
OPPOSITION
CATHAY BANK, A CALIFORNIA BANKING CORPORATION VS. RAYMOND
XIANG ZHANG et al
001C03802788
Instructions:
Please place this sheet on top of the document to be scanned.BY FAX
Michael Gerard Fletcher (State Bar No. 070849)
Kenneth N. Russak (State Bar No. 107283)
Hanna B. Raanan (State Bar No. 261014)
FRANDZEL ROBINS BLOOM & CSATO, L.C.
6500 Wilshire Boulevard
Seventeenth Floor
Los Angeles, California 90048-4920
Telephone: (323) 852-1000
Facsimile: (323) 651-2577
Attorneys for Plaintiff and Cross-Defendant
CATHAY BANK
ure
San Francisco Connty Sunerior Cour
oct 15 rr
CLEHK Ur ING WUURI
ey: “Deputy ler
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO, NORTHERN DISTRICT
CATHAY BANK, a California banking
corporation,
Plaintiff,
ve
RAYMOND XIANG KAI ZHANG, aka
RAYMOND KAI ZHANG, aka RAYMOND
ZHANG, aka XIANG KAI ZHANG, aka XIANG
ZHANG, aka ZHANG XIANG, an individual;
CINDY ZHANG, an individual; DONG YING
QUI, an individual; XIANG KAI, LLC, a
California limited liability company ; RAY KAI,
LLC, a California limited liability company;
ZHANGS, LLC, California limited liability
company; and DOES 1 through 200, inclusive,
Defendants.
RAYMOND XIANG KAI ZHANG, an
individual, CINDY ZHANG, an individual;
DONG YING QUI, an individual; RAY KAI,
LLC, a California limited liability company; and
ZHANGS, LLC, a California limited liability
company,
Cross-Complainants,
ve.
CATHAY BANK, a California banking
corporation; and DOES 201-230, Inclusive,
Cross-Defendants,
AND RELATED CROSS-ACTION
1090708.1 | 02300-0790
CASE No. CGC-100500934
PLAINTIFF'S OPPOSITION TO
DEFENDANTS MOTION TO COMPEL
FURTHER RESPONSES TO SPECIAL
INTERROGATORIES, SET ONE (CCP
§2030.300), AND REQUEST FOR
MONETARY SANCTIONS AGAINST
DEFENDANTS IN THE AMOUNT OF
$7,433.25
Date: October 26, 2012
Time: 9:00 a.m.
Dept.: 302
PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL
INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST
DEFENDANTS,LOS ANGELES, CALIFORNIA 90048-4920
(323) 852-1000
FRANDZEL ROBINS BLOOM & CsaTo, L.C.
‘6500 WILSHIRE BOULEVARD, | 7TH FLOOR:
Co em IN DW
Plaintiff and Cross-defendant Cathay Bank hereby submits the following Memorandum of
Points and Authorities in support of its Opposition to Defendants Motion to Compel Further
Responses to Special Interrogatories:
1. INTRODUCTION
This case arises out of a defaulted and now-foreclosed $7,238,000 construction loan made
by Cathay Bank to Ray Kai, LLC (“Borrower”) to fund the construction of a condominium
complex on MacArthur Boulevard in San Francisco (“Project”). The case was commenced on
June 22, 2010, when Cathay Bank filed its complaint to enforce the construction loan documents
signed by the Borrower and parties related to the Borrower (“Credit Support Parties”) that either
had guaranteed the loan or had pledged otherwise unrelated real estate (“Additional Collateral”)
to secure the repayment of the construction loan.
On April 5, 2011, the Borrower and the Credit Support Parties (together, the “Obligors”)
filed a first amended! cross-complaint against Cathay Bank for damages and injunctive relief, as
well as a motion for a preliminary injunction against the then-pending foreclosure sales of the
Project and the Additional Collateral. The preliminary injunction was denied and Cathay Bank's
demurrer to the first amended complaint was sustained., The Obligors nonetheless filed a second
amended cross-complaint in June 201 1 that alleged the same facts against Cathay Bank, albeit
couched in different theories of recovery.
The Obligors have since come to agree that their prior version of the facts was false but,
instead of abandoning their ill-conceived cross-complaint, have invented a new set of supposed
wrongful acts and omissions of Cathay Bank—one that is entirely inconsistent with their prior
allegations and testimony. In January 2012, the Obligors filed a third amended cross-complaint
that alleges 224 statements of fact which are entirely different from those alleged in the first and
second amended cross-complaints.
' The original cross-complaint was filed on March 10, 2011 but omitted the Borrower as a
cross-complainant. The only difference between the two pleadings is the addition of the Borrower
as such.
1090708.1 | 02300-0790 1
PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL
INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST
DEFENDANTSLos ANGELES, CALIFORNIA 90048-4920
FRANDZEL ROBINS BLOOM & CsaTo, L.C.
6500 WiLSHIRE BOULEVARD, | 77 FLOOR
(323) 852-1000
Cathay Bank received Defendant Raymond Zhang's (“Defendant”) Special Interrogatories
to Cathay Bank on or about July 5, 2012. On August 7, 2012, Cathay Bank served its responses to
the Special Interrogatories. Cathay Bank's responses to the Special Interrogatories are the subject
of the Motion to Compel.
With respect to the special interrogatories, Cathay Bank interposed valid objections and/or
provided appropriate responses. Defendant's motion to compel further responses to the special
interrogatories should therefore be denied. In addition, Defendant's motion was filed without
substantial justification. Cathay Bank should therefore be awarded sanctions against the
Defendant.
Although the discovery cut-off in this case is November 3, 2012, Cathay Bank’s discovery
is by no means complete. Cathay Bank has noticed seven (7) depositions to be conducted this
month, including depositions of Raymond and Cindy Zhang and Dong Ying Qui, and Bill Langan.
Indeed, the Obligors have noticed four depositions for this month, including the depositions of
Nicholas Chung, Daniel Schorr, Theresa Kneis-Andersen, and Gregory Badura, and have stated an
intention to take the depositions of Dominic Li and Charles Rice. Obligors should not, thus, be
surprised, that Cathay Bank’s discovery responses are based upon the information known to it at
the time the responses were served.
Il. FACTUAL BACKGROUND
This case was commenced on June 22, 2010 with the filing by Cathay Bank of a “Verified
Complaint for (1) Judicial Foreclosure and the Deficiency Judgment, etc.” Among other causes of
action, Cathay Bank's complaint sought to enforce its rights and remedies in connection with an
October 19, 2006, $7,238,000 loan that it made it to Defendant Ray Kai LLC (“Borrower”) for the
purpose of building a condominium project located at 1459 MacArthur Blvd., Oakland, California
(“Project”). Pursuant to the terms of a written construction loan agreement, the Borrower
promised to repay the loan in full eighteen months later, or approximately May 18, 2008.
Over the next four years the maturity of the loan was extended six times pursuant to a series
of six written agreements denominated, variously an “extension” or “modification” agreement
1090708.1 | 23000-0790 2
PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL
INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST.
DEFENDANTSFRANOZEL ROBINS BLOom & CsarTo, L.C.
6500 WILSHIRE BOULEVARD, | 7TH FLOOR
LOS ANGELES, CALIFORNIA SO048-4920
(323) 852-1000
(each hereinafter referred to as an “extension agreement”), the last of which extended the maturity
of the loan to April 1, 2010. The fourth and the fifth extension agreements were conditioned on the
pledging of additional real estate to Cathay Bank. On or about February 26, 2009, in connection
with the fourth extension agreement, defendants Raymond Zhang, Cindy Zhang and Dong Ying
Qiu executed a deed of trust encumbering a retail buildings located at 4900-4914 Third Street, San
Francisco, California (“Third Street Property”). On or about December 3, 2009, in connection
with the fifth extension agreement, Raymond and Cindy Zhang executed a deed of trust
encumbering 255 International Blvd., Oakland, California (“International Property”) and Zhangs,
LLC execute a deed of trust encumbering 480 Potrero Ave., San Francisco, California (“Potrero
Property”).
The Borrower failed to repay the loan on or after April 1, 2010 (the maturity date of the
loan as extended by the sixth extension agreement) and, not quite two months later, Cathay Bank
filed its Verified Complaint on June 22, 2010. Cathay Bank successfully moved this court for an
order appointing a receiver over the Project, the Third Street Property and building located at 5530
Mission Blvd (“Mission Property”) that had been pledged as additional collateral for a separate
loan, that was also the subject of the Verified Complaint.
In March of 2011, the Obligors filed their original and, shortly thereafter, their first
amended cross-complaint, along with an application for preliminary injunction by which they
sought an order from this court restraining Cathay Bank from conducting then-scheduled
nonjudicial foreclosure sales of the Third Street, International and Portrero properties (“Additional
Collateral’).
The injunction application was denied and Cathay Bank's then pending demurer to the
Obligors' first amended cross-complaint was sustained with leave to amend. Soon thereafter, in
June of 2011, Obligors filed their second amended cross-complaint. The only difference between
the second amended cross-complaint and the prior versions was the deletion of the fraud cause of
action and its replacement by a breach of fiduciary duty theory of recovery.
Thereafter, Obligors retained new counsel. In October 2011, the Obligors successfully
1090708.1 | 023000-0790 3
PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL
INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST
DEFENDANTS,FRANDZEL ROBINS BLOOM & CsaTo, L.C.
S500 WILSHIRE BOULEVARD, 1 7TH FLOOR
LOS ANGELES, CALIFORNIA 80048-4920
(323) 852-1000
oe YN DW BF wWwN =
Ss
11
moved this Court for leave to file a third amended cross-complaint based on the Obligors’
allegations of a language barrier between them and prior counsel. The Court's Order instructed the
Obligors to bold-face all allegations in the third amended cross-complaint which were different
from the second amended cross-complaint. On January 3, 2012, the Obligors filed their third
amended cross-complaint, with the entire third amended cross-complaint in bold-faced type. The
third amended cross-complaint alleges fifteen causes of action and approximately 215 allegations
of fact related to claimed bad acts by Cathay Bank which are not mirrored in any of the prior
versions of the cross-complaint.
The third amended cross-complaint filed on January 3, 2012 includes 224 allegations of
facts, 114 of which allege specific bad acts on the part of Cathay Bank over the course of forty
eight (48) months, beginning in 2006 and continuing until June 22, 2010 when Cathay Bank filed
its Verified Complaint. The alleged bad acts provide the basis for the purported cross-claims
against Cathay Bank of fraud in the execution and in the inducement, breach of contract, wrongful
foreclosure, breach of the implied covenant of good faith and fair dealing, misrepresentation,
interference with prospective economic advantage, violation of unfair competition law, and
estoppel, as follows:
The Obligors contend that they began to discuss a construction loan for the construction of a
mixed-use, commercial and residential building with Cathay Bank in 2006 and that, over the course
of negotiating with Cathay Bank, the Obligors believed that Cathay Bank had agreed to provide a
loan in the amount of $7.2 million to be paid in 30-months. The Obligors allege that Cathay Bank
knew that they had only a rudimentary ability in written and spoken English and that, in October
2006, Cathay Bank tricked the Obligors into signing a loan that was to be paid in 18 months instead
of at the end of the 30-month term that Cathay Bank supposedly had promised in their negotiations.
Obligors began construction and, shortly after the 18-month maturity date had passed, they entered
into the first of three agreements (dated June 4, 2008, September 12, 2008 and December 12, 2008)
to extend the maturity date that were not conditioned upon the pledging of additional collateral.
Obligors further allege that, in February 2009, in connection with discussions over what was to
1090708.1 | 023000-0790. 4
PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL
INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST.
DEFENDANTSFRANDZEL ROBINS BLOOM & Csaro, L.C.
6500 WicsHiRE BOULEVARD, | 77H FLooR
LOS ANGELES, CALIFORNIA 90048-4920
(323) 852-1000
become a fourth extension agreement unsupported by additional collateral, Cathay Bank offered to
refinance an unrelated Joan on the Third Street Property to provide funds for an extension fee; that
Obligors signed an application to refinance the Third Street Property but that, instead of refinancing
the loan, Cathay Bank attached the signature page of the application to a deed of trust on the Third
Street Property and recorded the deed of trust in March 2009 as additional collateral for the
construction loan.
Nine-months after the alleged fraud as to the Third Street Property, in December 2009, the
Obligors contend that they were presented with an opportunity to have foreign investors purchase
units under an “EB-5 immigration program.” The third amended cross-complaint states that the
Obligors approached Cathay Bank to request an 18-month extension of the maturity date due to this
opportunity. The third amended cross-complaint alleges that Cathay Bank agreed to this extension
on the condition that the Obligors pledge the International and Potrero Properties as additional
collateral. The Obligors then contend that Cathay Bank refused to grant the 18-month extension,
giving them only a four month extension of the maturity date and that, despite Obligors protest,
Cathay Bank then recorded the deeds of trust on the International and Potrero Properties in
December 2009.
The wrongful acts summarized here show a complex history of alleged misconduct first
occurring in the fourth quarter of 2006, another set of wrongful acts occurring the first quarter of
2009 and a third set of wrongful acts occurring in the last quarter of 2009; and this is but a brief
summary of the 114 paragraphs of specific wrongful acts or omissions alleged against Cathay Bank
in the third amended cross-complaint.
Cathay Bank received the Obligors’ Special Interrogatories to Cathay Bank on or about July
5, 2012. On August 7, 2012, Cathay Bank served its responses to the Special Interrogatories.
Cathay Bank provided full and complete responses where it was able, and properly objected as
applicable. With some exceptions, despite its objections, Cathay Bank responded in good faith to
the Special Interrogatories.
On or about August 20, 2012, Cathay Bank's counsel received a 10-page letter from C.J.
1090708.1 | 023000-0790 5
PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL
INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST
DEFENDANTSFRANDZEL ROBINS BLOOM & CSATO, L.C.
6500 WisHiRE BouLevarO, | 77H FLOOR
LOS ANGELES, CALIFORNIA 90048-4920
(323) 852-1000
Hu's office regarding its responses to discovery propounded by the Obligors, including its
responses to the special interrogatories. The August 20, 2012 letter demanded amended responses
by August 27, 2012. Cathay Bank provided its response to this letter on August 29, 2012 via email.
Cathay Bank did not get either a telephone call or other response regarding its August 29, 2012
letter. The Obligors filed their Motion to Compel Further Responses to Special Interrogatories on
September 25, 2012. At no time did the Obligors request an extension of the deadline to file
motions to compel to allow time for a reasonable and good faith meet and confer effort.
1. DEFENDANT DID NOT MEET AND CONFER IN GOOD FAITH AND CATHAY
BANK'S RESPONSES TO THE SPECIAL INTERROGATORIES WERE PROPER
Cathay Bank interposed valid objections and/or provided appropriate responses to the
special interrogatories. A motion to compel lies where the party to whom the interrogatories are
directed gave responses deemed improper by the propounding party; e.g. objections or evasive or
incomplete answers. California Code of Civil Procedure §2030.300; see Best Products, Inc. v.
Sup.Ct. (Granatelli Motorsports, Inc.) (2004) 119 Cal.App.4th 1181, 1189-1190 (motion to compel
proper to challenge “boilerplate” responses).
A Defendant Did Not Conduct Reasonable and Good Faith Meet and Confer
The Discovery Act requires that a party conduct a “reasonable and good faith” effort to
meet and confer regarding the responses prior to filing a motion to compel further responses.
C.C.P. §2030.300(b); See Clement v. Alegre (2009) 177 Cal.app.4th 1277, 1294. The California
Guide: Civil Practice Before Trial gives some insight as to what constitutes a reasonable and good
faith meet and confer effort, stating that greater effort at informal resolution may be required in
larger, more complex cases. Given the complexity of this case, Cathay Bank asserts that one letter,
without any follow-up is an insufficient effort to meet the “reasonable and good faith” standard
required.
B. Category 1: Cathay Banks’ Responses to Special Interrogatories Nos. 2, 5, 8, 11,
14, 16, 20, 22, 25, and 48
Obligors argue that Cathay Bank's responses to these interrogatories are improper because
1090708.1 | 02300-0790 6
PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL
INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST
DEFENDANTS,FRANOZEL ROBINS BLOOM & CsaTo, L.C,
6500 WILSHIRE BOULEVARD, 1 77H FLOOR
LOS ANGELES, CALIFORNIA 90048-4920
(323) 852-1000
Cathay Bank did not adequately identify the documents. Contrary to the Obligors' allegations,
Cathay Bank did adequately identify the documents, and has provided all of them to the Obligors as
part of its production. The documents were provided to the Obligors as they were kept in the
normal course of business and since those documents are now equally available to the Obligors,
there is no legal authority that requires Cathay Bank to do Obligors' review for them. All of the
documents identified by Cathay Bank are available to the Obligors, as Cathay Bank has produced
all non-privileged, non-confidential documents in its possession related to this case.
In addition, the Special Interrogatories were propounded in July 2011 with Cathay Bank
providing responses in August 2011. A responding party is not required to supplement its
responses as discovery continues, and information that is discovered after service of proper
responses does not make the initial response inadequate. “An interrogatory may not be made
continuing so as to impose on the party responding to it a duty to supplement an answer that was
initially correct and complete with later acquire information.” California Code of Civil Procedure
§2030.060(g). Obligors protest is unfounded, particularly in light of the fact that Cathay Bank has
produced all documents in its files related to the two loans at issue which are not privileged and not
confidential.
Cc Category 2: Bank's Responses to Special Interrogatories No. 3, 6, 9, 12, 15, 18, 21,
24, 27, and 50
Obligors argue that Cathay Bank's responses to these interrogatories are improper because
Cathay Bank did not adequately state the "contents of the negotiations” between the Bank and the
Obligors related to various documents or properties. Contrary to the Obligors' allegations, Cathay
Bank did adequately identify the contents of the negotiations as being contained in the written
documents which memorialize the contents of discussions between Cathay Bank and the Obligors.
The fact that Obligors do not like this response does not make it improper. In this case, the crux of
the dispute between the parties is that the Bank contends that the entirety of the relationship is
completely governed by and encompassed in written, executed documents pursuant to the parole
evidence rule. The Obligors, on the other hand argue against Cathay Bank's position, positing that
1090708.1 | 023000-0790 1
PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL
INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST
DEFENDANTS,FRANDZEL ROBINS BLOOM & CsaTo, L.C.
6500 WiLsHIRE BOULEVARD, | 77H FLOOR
LOS ANGELES, CALIFORNIA 90048-4920
(323) 852-1000
in fact there is some essence of the relationship that is outside of the scope of the written
documents. Obligors protest as to Cathay Bank's response is essentially an unhappiness that
Cathay Bank neither agrees with nor believes there is any support for the fabricated version of
events alleged in the Third Amended Cross-complaint. This unhappiness, however does not make
Cathay Bank's responses inadequate. The Motion should be denied.
Dz Category 3: Bank's Response to Special Interrogatories No. 28, 29, 30, 32, 33, 34,
35, 36, 37, and 40
Defendant is unhappy with Cathay Bank's responses because he asserts that Cathay Bank
improperly objected to these interrogatories. As can be clearly seen by the interrogatories, they are
so vague and ambiguous as to be unanswerable. Each of these interrogatories references some
“extension which resulted in a loan modification". As Cathay Bank has already expressed to the
Defendant, such a phrase is wholly unintelligible. Cathay Bank granted extensions of the maturity
date which were memorialized in either extension agreements or loan modification and extension
agreements. The phrase "extension which resulted in a loan modification" is vague and ambiguous
because it assumes there was "an extension" that "resulted in" a loan modification. In other words,
it assumes two transactional events" (1) an extension that (2) caused a modification. As far as
Cathay Bank is aware, each extension or modification agreement at issue in this action was not the
result of an extension but was (together with the other documents executed as part of the extension
or modification transaction) itself the operative agreement that effected the extension of the
maturity date of the construction loan. Plaintiff has produced all non-privileged non-confidential
documents in the loan files it maintains in connection with the loans at issue in this action.
Defendant's surprise that they've found no document to support their factual contentions should be
instructive to them. It is not grounds for a motion to compel.
E. Category 4: Bank's Response to Special Interrogatories No. 39 and 41
Defendant alleges that Cathay Bank improperly responded to these interrogatories by its
reliance on CCP §2030.230. Defendant's protest regarding Plaintiff's response is unjustified,
particularly since Plaintiff has produced all documents in its files related to the Construction Loan
1090708.1 | 02300-0790 8
PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL
INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST
DEFENDANTSLos ANGELES, CALIFORNIA 60048-4920
(323) 852-1000
FRANDZEL ROBINS BLOOM & CsaTo, L.C.
‘6500 WILSHIRE BOULEVARD, | 7TH FLOOR
which are not privileged and not confidential. Plaintiff has properly invoked CCP 2030.230 and
Defendant's issues with this response are unfounded. It appears that Defendant does not want to
review the documents produced and intends to ask the Court to Order Cathay Bank to do his trial
preparation for him. Such a result is neither the intention of the Discovery Act, nor is it a proper
grounds for moving to compel further responses. The Plaintiff has properly responded and has
produced all non-privileged non confidential documents which refer to the two loans at issue and
the various extensions related to those loans and no list of every document related to the loans
existed at the time the responses were served, nor does it currently exist. Creating such a list would
be of substantial burden to Cathay Bank and would be an equal burden on the Defendant. As such,
CCP §2030.230 is properly invoked and the Motion should be denied.
IV. SANCTIONS SHOULD BE NOT BE AWARDED AGAINST THE BANK AND
SHOULD BE AWARDED AGAINST THE DEFENDANT FOR THIS FRIVOLOUS
MOTION
The Defendant properly cited the California Code of Civil Procedure which mandates that
the Court award sanctions against any party who unsuccessfully makes or opposes a motion.
A. The Bank Acted With Substantial Justification And Therefore No Sanctions Should
Be Awarded
As indicated above and in the Bank's Separate Statement, there is substantial justification
for Cathay Bank's objections and responses to the special interrogatories. Cathay Bank has not
attempted to withhold any information from the Defendant and provided proper responses and
objections based on the information available to it at the time the responses were served. If the
Court finds that further responses are required, Cathay Bank respectfully requests that no sanctions
be awarded.
B. The Court Should Issue Sanctions Against the Defendant
Cathay Bank contends that this Motion smells of gamesmanship. Cathay Bank has
provided full and proper responses to the interrogatories and to all discovery propounded by the
Defendant. The Defendant wrings his hands that the Bank is withholding information, however,
1090708.1 | 023000-0790 9
PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL
INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST
DEFENDANTSLOS ANGELES, CALIFORNIA 90048-4920
(323) 852-1000
FRANDZEL ROBINS BLOOM & CsaTo, L.C.
6500 WILSHIRE BOULEVARD, | 77H FLOOR
SCO me RD WH BW NY =
Cathay Bank has produced every non-privileged, non-confidential document in its possession, as
those documents are kept in the ordinary course of business, despite proper objections to several of
the Defendant's improperly written requests for production of documents. The Defendant appears
to expect that Cathay Bank conduct his review for him. Such tactics should not be rewarded by the
Court. Cathay Bank has been forced to respond to this frivolous motion, and will have to spend
time and money appear at the hearing and should be awarded sanctions in the amount of $4,666.50.
IV. CONCLUSION
Based on the foregoing and the Plaintiffs Response to the Separate Statement, the Motion
should be denied and the Court should award sanctions to the Plaintiff for time spent opposing this
frivolous discovery motion.
Respectfully Submitted,
DATED: October 15, 2012 FRANDZEL ROBINS BLOOM & CSATO, L.C.
MICHAEL GERARD FLETCHER
KENNETH N. RUSSAK
HANNA ANAN
een
By:
[ANNA B. RAANAN
‘Attorneys for Plaintiff and Cross-Defendant
CATHAY BANK
1090708.1 | 02300-0790
PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL
INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST
DEFENDANTSFRANDZEL ROBINS BLOOM & Csaro, L.C.
6500 WicsHiRe BOuLevaRD, | 7TH FLOOR
LOS ANGELES, CALIFORNIA 90048-4920
(323) 852-1000
PROOF OF SERVICE
I, the undersigned, declare and certify as follows:
I am over the age of eighteen years, not a party to the within action and employed in the
County of Los Angeles State of California. I am employed in the office of Frandzel Robins Bloom
& Csato, L.C., members of the Bar of the above-entitled Court, and I made the service referred to
below at their direction. My business address is 6500 Wilshire Boulevard, Seventeenth Floor, Los
Angeles, California 90048-4920
On October 15, 2012, I served true copy(ies) of the PLAINTIFF'S OPPOSITION TO
DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL
INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY
SANCTIONS AGAINST DEFENDANTS, the original(s) of which is(are) affixed hereto. to the
party(ies) on the attached service list.
& BY OVERNIGHT DELIVERY: I deposited such document(s) in a box or other facility
regularly maintained by the overnight service carrier, or delivered such document(s) to a
courier or driver authorized by the overnight service carrier to receive documents, in an
envelope or package designated by the overnight service carrier with delivery fees paid or
provided for, addressed to the person(s) served hereunder.
I certify under penalty of perjury under the laws of the State of California and the United
States of America that the foregoing is true and correct.
Executed on October 15, 2012, at Los Angeles, C:
1090708.1 | 023000-0790
PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL
INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST
DEFENDANTS,FRANDZEL ROBINS BLOOM & CsaTo, L.C.
6500 WILSHIRE BOULEVARD, | 77H FLOOR
LOS ANGELES, CALIFORNIA 90048-4920
(323) 852-1000
Chijeh Hu
CJH & Associates, P.C.
1440 Broadway, Suite 1000
Oakland, CA 94612
Telephone: 510-832-1686
Facsimile: 510-251-1155
Email: ch@cjhulaw.com;
bhofer@cjhulaw.com
1090708.1 | 02300-0790
SERVICE LIST
Attorney for Defendants and Cross-
Complainants:
RAYMOND ZIANG KAI ZHANG, aka
RAYMOND KAI ZHANG, aka RAYMOND
ZHANG, aka XIANG KAI ZHANG, aka
XIANG ZHANG, aka ZHANG XIANG, an
individual; CINDY ZHANG, an individual;
DONG YING QUI, an individual; XIANG KAI,
LLC, a California limited liability company ;
RAY KAI, LLC, a California limited liability
company; ZHANGS, LLC, California limited
liability company
12
PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL
INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST
DEFENDANTS
Preview
CUTAN SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO Document Scanning Lead Sheet Oct-15-2012 4:16 pm Case Number: CGC-10-500934 Filing Date: Oct-15-2012 4:14 Filed by: VANESSA WU Juke Box: 001 Image: 03802788 OPPOSITION CATHAY BANK, A CALIFORNIA BANKING CORPORATION VS. RAYMOND XIANG ZHANG et al 001C03802788 Instructions: Please place this sheet on top of the document to be scanned.BY FAX Michael Gerard Fletcher (State Bar No. 070849) Kenneth N. Russak (State Bar No. 107283) Hanna B. Raanan (State Bar No. 261014) FRANDZEL ROBINS BLOOM & CSATO, L.C. 6500 Wilshire Boulevard Seventeenth Floor Los Angeles, California 90048-4920 Telephone: (323) 852-1000 Facsimile: (323) 651-2577 Attorneys for Plaintiff and Cross-Defendant CATHAY BANK ure San Francisco Connty Sunerior Cour oct 15 rr CLEHK Ur ING WUURI ey: “Deputy ler SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO, NORTHERN DISTRICT CATHAY BANK, a California banking corporation, Plaintiff, ve RAYMOND XIANG KAI ZHANG, aka RAYMOND KAI ZHANG, aka RAYMOND ZHANG, aka XIANG KAI ZHANG, aka XIANG ZHANG, aka ZHANG XIANG, an individual; CINDY ZHANG, an individual; DONG YING QUI, an individual; XIANG KAI, LLC, a California limited liability company ; RAY KAI, LLC, a California limited liability company; ZHANGS, LLC, California limited liability company; and DOES 1 through 200, inclusive, Defendants. RAYMOND XIANG KAI ZHANG, an individual, CINDY ZHANG, an individual; DONG YING QUI, an individual; RAY KAI, LLC, a California limited liability company; and ZHANGS, LLC, a California limited liability company, Cross-Complainants, ve. CATHAY BANK, a California banking corporation; and DOES 201-230, Inclusive, Cross-Defendants, AND RELATED CROSS-ACTION 1090708.1 | 02300-0790 CASE No. CGC-100500934 PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST DEFENDANTS IN THE AMOUNT OF $7,433.25 Date: October 26, 2012 Time: 9:00 a.m. Dept.: 302 PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST DEFENDANTS,LOS ANGELES, CALIFORNIA 90048-4920 (323) 852-1000 FRANDZEL ROBINS BLOOM & CsaTo, L.C. ‘6500 WILSHIRE BOULEVARD, | 7TH FLOOR: Co em IN DW Plaintiff and Cross-defendant Cathay Bank hereby submits the following Memorandum of Points and Authorities in support of its Opposition to Defendants Motion to Compel Further Responses to Special Interrogatories: 1. INTRODUCTION This case arises out of a defaulted and now-foreclosed $7,238,000 construction loan made by Cathay Bank to Ray Kai, LLC (“Borrower”) to fund the construction of a condominium complex on MacArthur Boulevard in San Francisco (“Project”). The case was commenced on June 22, 2010, when Cathay Bank filed its complaint to enforce the construction loan documents signed by the Borrower and parties related to the Borrower (“Credit Support Parties”) that either had guaranteed the loan or had pledged otherwise unrelated real estate (“Additional Collateral”) to secure the repayment of the construction loan. On April 5, 2011, the Borrower and the Credit Support Parties (together, the “Obligors”) filed a first amended! cross-complaint against Cathay Bank for damages and injunctive relief, as well as a motion for a preliminary injunction against the then-pending foreclosure sales of the Project and the Additional Collateral. The preliminary injunction was denied and Cathay Bank's demurrer to the first amended complaint was sustained., The Obligors nonetheless filed a second amended cross-complaint in June 201 1 that alleged the same facts against Cathay Bank, albeit couched in different theories of recovery. The Obligors have since come to agree that their prior version of the facts was false but, instead of abandoning their ill-conceived cross-complaint, have invented a new set of supposed wrongful acts and omissions of Cathay Bank—one that is entirely inconsistent with their prior allegations and testimony. In January 2012, the Obligors filed a third amended cross-complaint that alleges 224 statements of fact which are entirely different from those alleged in the first and second amended cross-complaints. ' The original cross-complaint was filed on March 10, 2011 but omitted the Borrower as a cross-complainant. The only difference between the two pleadings is the addition of the Borrower as such. 1090708.1 | 02300-0790 1 PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST DEFENDANTSLos ANGELES, CALIFORNIA 90048-4920 FRANDZEL ROBINS BLOOM & CsaTo, L.C. 6500 WiLSHIRE BOULEVARD, | 77 FLOOR (323) 852-1000 Cathay Bank received Defendant Raymond Zhang's (“Defendant”) Special Interrogatories to Cathay Bank on or about July 5, 2012. On August 7, 2012, Cathay Bank served its responses to the Special Interrogatories. Cathay Bank's responses to the Special Interrogatories are the subject of the Motion to Compel. With respect to the special interrogatories, Cathay Bank interposed valid objections and/or provided appropriate responses. Defendant's motion to compel further responses to the special interrogatories should therefore be denied. In addition, Defendant's motion was filed without substantial justification. Cathay Bank should therefore be awarded sanctions against the Defendant. Although the discovery cut-off in this case is November 3, 2012, Cathay Bank’s discovery is by no means complete. Cathay Bank has noticed seven (7) depositions to be conducted this month, including depositions of Raymond and Cindy Zhang and Dong Ying Qui, and Bill Langan. Indeed, the Obligors have noticed four depositions for this month, including the depositions of Nicholas Chung, Daniel Schorr, Theresa Kneis-Andersen, and Gregory Badura, and have stated an intention to take the depositions of Dominic Li and Charles Rice. Obligors should not, thus, be surprised, that Cathay Bank’s discovery responses are based upon the information known to it at the time the responses were served. Il. FACTUAL BACKGROUND This case was commenced on June 22, 2010 with the filing by Cathay Bank of a “Verified Complaint for (1) Judicial Foreclosure and the Deficiency Judgment, etc.” Among other causes of action, Cathay Bank's complaint sought to enforce its rights and remedies in connection with an October 19, 2006, $7,238,000 loan that it made it to Defendant Ray Kai LLC (“Borrower”) for the purpose of building a condominium project located at 1459 MacArthur Blvd., Oakland, California (“Project”). Pursuant to the terms of a written construction loan agreement, the Borrower promised to repay the loan in full eighteen months later, or approximately May 18, 2008. Over the next four years the maturity of the loan was extended six times pursuant to a series of six written agreements denominated, variously an “extension” or “modification” agreement 1090708.1 | 23000-0790 2 PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST. DEFENDANTSFRANOZEL ROBINS BLOom & CsarTo, L.C. 6500 WILSHIRE BOULEVARD, | 7TH FLOOR LOS ANGELES, CALIFORNIA SO048-4920 (323) 852-1000 (each hereinafter referred to as an “extension agreement”), the last of which extended the maturity of the loan to April 1, 2010. The fourth and the fifth extension agreements were conditioned on the pledging of additional real estate to Cathay Bank. On or about February 26, 2009, in connection with the fourth extension agreement, defendants Raymond Zhang, Cindy Zhang and Dong Ying Qiu executed a deed of trust encumbering a retail buildings located at 4900-4914 Third Street, San Francisco, California (“Third Street Property”). On or about December 3, 2009, in connection with the fifth extension agreement, Raymond and Cindy Zhang executed a deed of trust encumbering 255 International Blvd., Oakland, California (“International Property”) and Zhangs, LLC execute a deed of trust encumbering 480 Potrero Ave., San Francisco, California (“Potrero Property”). The Borrower failed to repay the loan on or after April 1, 2010 (the maturity date of the loan as extended by the sixth extension agreement) and, not quite two months later, Cathay Bank filed its Verified Complaint on June 22, 2010. Cathay Bank successfully moved this court for an order appointing a receiver over the Project, the Third Street Property and building located at 5530 Mission Blvd (“Mission Property”) that had been pledged as additional collateral for a separate loan, that was also the subject of the Verified Complaint. In March of 2011, the Obligors filed their original and, shortly thereafter, their first amended cross-complaint, along with an application for preliminary injunction by which they sought an order from this court restraining Cathay Bank from conducting then-scheduled nonjudicial foreclosure sales of the Third Street, International and Portrero properties (“Additional Collateral’). The injunction application was denied and Cathay Bank's then pending demurer to the Obligors' first amended cross-complaint was sustained with leave to amend. Soon thereafter, in June of 2011, Obligors filed their second amended cross-complaint. The only difference between the second amended cross-complaint and the prior versions was the deletion of the fraud cause of action and its replacement by a breach of fiduciary duty theory of recovery. Thereafter, Obligors retained new counsel. In October 2011, the Obligors successfully 1090708.1 | 023000-0790 3 PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST DEFENDANTS,FRANDZEL ROBINS BLOOM & CsaTo, L.C. S500 WILSHIRE BOULEVARD, 1 7TH FLOOR LOS ANGELES, CALIFORNIA 80048-4920 (323) 852-1000 oe YN DW BF wWwN = Ss 11 moved this Court for leave to file a third amended cross-complaint based on the Obligors’ allegations of a language barrier between them and prior counsel. The Court's Order instructed the Obligors to bold-face all allegations in the third amended cross-complaint which were different from the second amended cross-complaint. On January 3, 2012, the Obligors filed their third amended cross-complaint, with the entire third amended cross-complaint in bold-faced type. The third amended cross-complaint alleges fifteen causes of action and approximately 215 allegations of fact related to claimed bad acts by Cathay Bank which are not mirrored in any of the prior versions of the cross-complaint. The third amended cross-complaint filed on January 3, 2012 includes 224 allegations of facts, 114 of which allege specific bad acts on the part of Cathay Bank over the course of forty eight (48) months, beginning in 2006 and continuing until June 22, 2010 when Cathay Bank filed its Verified Complaint. The alleged bad acts provide the basis for the purported cross-claims against Cathay Bank of fraud in the execution and in the inducement, breach of contract, wrongful foreclosure, breach of the implied covenant of good faith and fair dealing, misrepresentation, interference with prospective economic advantage, violation of unfair competition law, and estoppel, as follows: The Obligors contend that they began to discuss a construction loan for the construction of a mixed-use, commercial and residential building with Cathay Bank in 2006 and that, over the course of negotiating with Cathay Bank, the Obligors believed that Cathay Bank had agreed to provide a loan in the amount of $7.2 million to be paid in 30-months. The Obligors allege that Cathay Bank knew that they had only a rudimentary ability in written and spoken English and that, in October 2006, Cathay Bank tricked the Obligors into signing a loan that was to be paid in 18 months instead of at the end of the 30-month term that Cathay Bank supposedly had promised in their negotiations. Obligors began construction and, shortly after the 18-month maturity date had passed, they entered into the first of three agreements (dated June 4, 2008, September 12, 2008 and December 12, 2008) to extend the maturity date that were not conditioned upon the pledging of additional collateral. Obligors further allege that, in February 2009, in connection with discussions over what was to 1090708.1 | 023000-0790. 4 PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST. DEFENDANTSFRANDZEL ROBINS BLOOM & Csaro, L.C. 6500 WicsHiRE BOULEVARD, | 77H FLooR LOS ANGELES, CALIFORNIA 90048-4920 (323) 852-1000 become a fourth extension agreement unsupported by additional collateral, Cathay Bank offered to refinance an unrelated Joan on the Third Street Property to provide funds for an extension fee; that Obligors signed an application to refinance the Third Street Property but that, instead of refinancing the loan, Cathay Bank attached the signature page of the application to a deed of trust on the Third Street Property and recorded the deed of trust in March 2009 as additional collateral for the construction loan. Nine-months after the alleged fraud as to the Third Street Property, in December 2009, the Obligors contend that they were presented with an opportunity to have foreign investors purchase units under an “EB-5 immigration program.” The third amended cross-complaint states that the Obligors approached Cathay Bank to request an 18-month extension of the maturity date due to this opportunity. The third amended cross-complaint alleges that Cathay Bank agreed to this extension on the condition that the Obligors pledge the International and Potrero Properties as additional collateral. The Obligors then contend that Cathay Bank refused to grant the 18-month extension, giving them only a four month extension of the maturity date and that, despite Obligors protest, Cathay Bank then recorded the deeds of trust on the International and Potrero Properties in December 2009. The wrongful acts summarized here show a complex history of alleged misconduct first occurring in the fourth quarter of 2006, another set of wrongful acts occurring the first quarter of 2009 and a third set of wrongful acts occurring in the last quarter of 2009; and this is but a brief summary of the 114 paragraphs of specific wrongful acts or omissions alleged against Cathay Bank in the third amended cross-complaint. Cathay Bank received the Obligors’ Special Interrogatories to Cathay Bank on or about July 5, 2012. On August 7, 2012, Cathay Bank served its responses to the Special Interrogatories. Cathay Bank provided full and complete responses where it was able, and properly objected as applicable. With some exceptions, despite its objections, Cathay Bank responded in good faith to the Special Interrogatories. On or about August 20, 2012, Cathay Bank's counsel received a 10-page letter from C.J. 1090708.1 | 023000-0790 5 PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST DEFENDANTSFRANDZEL ROBINS BLOOM & CSATO, L.C. 6500 WisHiRE BouLevarO, | 77H FLOOR LOS ANGELES, CALIFORNIA 90048-4920 (323) 852-1000 Hu's office regarding its responses to discovery propounded by the Obligors, including its responses to the special interrogatories. The August 20, 2012 letter demanded amended responses by August 27, 2012. Cathay Bank provided its response to this letter on August 29, 2012 via email. Cathay Bank did not get either a telephone call or other response regarding its August 29, 2012 letter. The Obligors filed their Motion to Compel Further Responses to Special Interrogatories on September 25, 2012. At no time did the Obligors request an extension of the deadline to file motions to compel to allow time for a reasonable and good faith meet and confer effort. 1. DEFENDANT DID NOT MEET AND CONFER IN GOOD FAITH AND CATHAY BANK'S RESPONSES TO THE SPECIAL INTERROGATORIES WERE PROPER Cathay Bank interposed valid objections and/or provided appropriate responses to the special interrogatories. A motion to compel lies where the party to whom the interrogatories are directed gave responses deemed improper by the propounding party; e.g. objections or evasive or incomplete answers. California Code of Civil Procedure §2030.300; see Best Products, Inc. v. Sup.Ct. (Granatelli Motorsports, Inc.) (2004) 119 Cal.App.4th 1181, 1189-1190 (motion to compel proper to challenge “boilerplate” responses). A Defendant Did Not Conduct Reasonable and Good Faith Meet and Confer The Discovery Act requires that a party conduct a “reasonable and good faith” effort to meet and confer regarding the responses prior to filing a motion to compel further responses. C.C.P. §2030.300(b); See Clement v. Alegre (2009) 177 Cal.app.4th 1277, 1294. The California Guide: Civil Practice Before Trial gives some insight as to what constitutes a reasonable and good faith meet and confer effort, stating that greater effort at informal resolution may be required in larger, more complex cases. Given the complexity of this case, Cathay Bank asserts that one letter, without any follow-up is an insufficient effort to meet the “reasonable and good faith” standard required. B. Category 1: Cathay Banks’ Responses to Special Interrogatories Nos. 2, 5, 8, 11, 14, 16, 20, 22, 25, and 48 Obligors argue that Cathay Bank's responses to these interrogatories are improper because 1090708.1 | 02300-0790 6 PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST DEFENDANTS,FRANOZEL ROBINS BLOOM & CsaTo, L.C, 6500 WILSHIRE BOULEVARD, 1 77H FLOOR LOS ANGELES, CALIFORNIA 90048-4920 (323) 852-1000 Cathay Bank did not adequately identify the documents. Contrary to the Obligors' allegations, Cathay Bank did adequately identify the documents, and has provided all of them to the Obligors as part of its production. The documents were provided to the Obligors as they were kept in the normal course of business and since those documents are now equally available to the Obligors, there is no legal authority that requires Cathay Bank to do Obligors' review for them. All of the documents identified by Cathay Bank are available to the Obligors, as Cathay Bank has produced all non-privileged, non-confidential documents in its possession related to this case. In addition, the Special Interrogatories were propounded in July 2011 with Cathay Bank providing responses in August 2011. A responding party is not required to supplement its responses as discovery continues, and information that is discovered after service of proper responses does not make the initial response inadequate. “An interrogatory may not be made continuing so as to impose on the party responding to it a duty to supplement an answer that was initially correct and complete with later acquire information.” California Code of Civil Procedure §2030.060(g). Obligors protest is unfounded, particularly in light of the fact that Cathay Bank has produced all documents in its files related to the two loans at issue which are not privileged and not confidential. Cc Category 2: Bank's Responses to Special Interrogatories No. 3, 6, 9, 12, 15, 18, 21, 24, 27, and 50 Obligors argue that Cathay Bank's responses to these interrogatories are improper because Cathay Bank did not adequately state the "contents of the negotiations” between the Bank and the Obligors related to various documents or properties. Contrary to the Obligors' allegations, Cathay Bank did adequately identify the contents of the negotiations as being contained in the written documents which memorialize the contents of discussions between Cathay Bank and the Obligors. The fact that Obligors do not like this response does not make it improper. In this case, the crux of the dispute between the parties is that the Bank contends that the entirety of the relationship is completely governed by and encompassed in written, executed documents pursuant to the parole evidence rule. The Obligors, on the other hand argue against Cathay Bank's position, positing that 1090708.1 | 023000-0790 1 PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST DEFENDANTS,FRANDZEL ROBINS BLOOM & CsaTo, L.C. 6500 WiLsHIRE BOULEVARD, | 77H FLOOR LOS ANGELES, CALIFORNIA 90048-4920 (323) 852-1000 in fact there is some essence of the relationship that is outside of the scope of the written documents. Obligors protest as to Cathay Bank's response is essentially an unhappiness that Cathay Bank neither agrees with nor believes there is any support for the fabricated version of events alleged in the Third Amended Cross-complaint. This unhappiness, however does not make Cathay Bank's responses inadequate. The Motion should be denied. Dz Category 3: Bank's Response to Special Interrogatories No. 28, 29, 30, 32, 33, 34, 35, 36, 37, and 40 Defendant is unhappy with Cathay Bank's responses because he asserts that Cathay Bank improperly objected to these interrogatories. As can be clearly seen by the interrogatories, they are so vague and ambiguous as to be unanswerable. Each of these interrogatories references some “extension which resulted in a loan modification". As Cathay Bank has already expressed to the Defendant, such a phrase is wholly unintelligible. Cathay Bank granted extensions of the maturity date which were memorialized in either extension agreements or loan modification and extension agreements. The phrase "extension which resulted in a loan modification" is vague and ambiguous because it assumes there was "an extension" that "resulted in" a loan modification. In other words, it assumes two transactional events" (1) an extension that (2) caused a modification. As far as Cathay Bank is aware, each extension or modification agreement at issue in this action was not the result of an extension but was (together with the other documents executed as part of the extension or modification transaction) itself the operative agreement that effected the extension of the maturity date of the construction loan. Plaintiff has produced all non-privileged non-confidential documents in the loan files it maintains in connection with the loans at issue in this action. Defendant's surprise that they've found no document to support their factual contentions should be instructive to them. It is not grounds for a motion to compel. E. Category 4: Bank's Response to Special Interrogatories No. 39 and 41 Defendant alleges that Cathay Bank improperly responded to these interrogatories by its reliance on CCP §2030.230. Defendant's protest regarding Plaintiff's response is unjustified, particularly since Plaintiff has produced all documents in its files related to the Construction Loan 1090708.1 | 02300-0790 8 PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST DEFENDANTSLos ANGELES, CALIFORNIA 60048-4920 (323) 852-1000 FRANDZEL ROBINS BLOOM & CsaTo, L.C. ‘6500 WILSHIRE BOULEVARD, | 7TH FLOOR which are not privileged and not confidential. Plaintiff has properly invoked CCP 2030.230 and Defendant's issues with this response are unfounded. It appears that Defendant does not want to review the documents produced and intends to ask the Court to Order Cathay Bank to do his trial preparation for him. Such a result is neither the intention of the Discovery Act, nor is it a proper grounds for moving to compel further responses. The Plaintiff has properly responded and has produced all non-privileged non confidential documents which refer to the two loans at issue and the various extensions related to those loans and no list of every document related to the loans existed at the time the responses were served, nor does it currently exist. Creating such a list would be of substantial burden to Cathay Bank and would be an equal burden on the Defendant. As such, CCP §2030.230 is properly invoked and the Motion should be denied. IV. SANCTIONS SHOULD BE NOT BE AWARDED AGAINST THE BANK AND SHOULD BE AWARDED AGAINST THE DEFENDANT FOR THIS FRIVOLOUS MOTION The Defendant properly cited the California Code of Civil Procedure which mandates that the Court award sanctions against any party who unsuccessfully makes or opposes a motion. A. The Bank Acted With Substantial Justification And Therefore No Sanctions Should Be Awarded As indicated above and in the Bank's Separate Statement, there is substantial justification for Cathay Bank's objections and responses to the special interrogatories. Cathay Bank has not attempted to withhold any information from the Defendant and provided proper responses and objections based on the information available to it at the time the responses were served. If the Court finds that further responses are required, Cathay Bank respectfully requests that no sanctions be awarded. B. The Court Should Issue Sanctions Against the Defendant Cathay Bank contends that this Motion smells of gamesmanship. Cathay Bank has provided full and proper responses to the interrogatories and to all discovery propounded by the Defendant. The Defendant wrings his hands that the Bank is withholding information, however, 1090708.1 | 023000-0790 9 PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST DEFENDANTSLOS ANGELES, CALIFORNIA 90048-4920 (323) 852-1000 FRANDZEL ROBINS BLOOM & CsaTo, L.C. 6500 WILSHIRE BOULEVARD, | 77H FLOOR SCO me RD WH BW NY = Cathay Bank has produced every non-privileged, non-confidential document in its possession, as those documents are kept in the ordinary course of business, despite proper objections to several of the Defendant's improperly written requests for production of documents. The Defendant appears to expect that Cathay Bank conduct his review for him. Such tactics should not be rewarded by the Court. Cathay Bank has been forced to respond to this frivolous motion, and will have to spend time and money appear at the hearing and should be awarded sanctions in the amount of $4,666.50. IV. CONCLUSION Based on the foregoing and the Plaintiffs Response to the Separate Statement, the Motion should be denied and the Court should award sanctions to the Plaintiff for time spent opposing this frivolous discovery motion. Respectfully Submitted, DATED: October 15, 2012 FRANDZEL ROBINS BLOOM & CSATO, L.C. MICHAEL GERARD FLETCHER KENNETH N. RUSSAK HANNA ANAN een By: [ANNA B. RAANAN ‘Attorneys for Plaintiff and Cross-Defendant CATHAY BANK 1090708.1 | 02300-0790 PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST DEFENDANTSFRANDZEL ROBINS BLOOM & Csaro, L.C. 6500 WicsHiRe BOuLevaRD, | 7TH FLOOR LOS ANGELES, CALIFORNIA 90048-4920 (323) 852-1000 PROOF OF SERVICE I, the undersigned, declare and certify as follows: I am over the age of eighteen years, not a party to the within action and employed in the County of Los Angeles State of California. I am employed in the office of Frandzel Robins Bloom & Csato, L.C., members of the Bar of the above-entitled Court, and I made the service referred to below at their direction. My business address is 6500 Wilshire Boulevard, Seventeenth Floor, Los Angeles, California 90048-4920 On October 15, 2012, I served true copy(ies) of the PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST DEFENDANTS, the original(s) of which is(are) affixed hereto. to the party(ies) on the attached service list. & BY OVERNIGHT DELIVERY: I deposited such document(s) in a box or other facility regularly maintained by the overnight service carrier, or delivered such document(s) to a courier or driver authorized by the overnight service carrier to receive documents, in an envelope or package designated by the overnight service carrier with delivery fees paid or provided for, addressed to the person(s) served hereunder. I certify under penalty of perjury under the laws of the State of California and the United States of America that the foregoing is true and correct. Executed on October 15, 2012, at Los Angeles, C: 1090708.1 | 023000-0790 PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST DEFENDANTS,FRANDZEL ROBINS BLOOM & CsaTo, L.C. 6500 WILSHIRE BOULEVARD, | 77H FLOOR LOS ANGELES, CALIFORNIA 90048-4920 (323) 852-1000 Chijeh Hu CJH & Associates, P.C. 1440 Broadway, Suite 1000 Oakland, CA 94612 Telephone: 510-832-1686 Facsimile: 510-251-1155 Email: ch@cjhulaw.com; bhofer@cjhulaw.com 1090708.1 | 02300-0790 SERVICE LIST Attorney for Defendants and Cross- Complainants: RAYMOND ZIANG KAI ZHANG, aka RAYMOND KAI ZHANG, aka RAYMOND ZHANG, aka XIANG KAI ZHANG, aka XIANG ZHANG, aka ZHANG XIANG, an individual; CINDY ZHANG, an individual; DONG YING QUI, an individual; XIANG KAI, LLC, a California limited liability company ; RAY KAI, LLC, a California limited liability company; ZHANGS, LLC, California limited liability company 12 PLAINTIFF'S OPPOSITION TO DEFENDANTS MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL INTERROGATORIES, SET ONE (CCP §2030.300), AND REQUEST FOR MONETARY SANCTIONS AGAINST DEFENDANTS