Pham et al

Filing 216

CONDITIONAL ORDER re 150 plaintiffs' Motion to Compel Deposition of Allen Christensen; ALTERNATIVE REPORT AND RECOMMENDATIONS re Evidentiary Sanctions. Objections due by 5/23/2011. Signed by Magistrate Judge Howard R. Lloyd on 5/9/2011. (hrllc2, COURT STAFF) (Filed on 5/9/2011)

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1 2 *E-FILED 05-09-2011* 3 4 5 6 NOT FOR CITATION 8 IN THE UNITED STATES DISTRICT COURT 9 FOR THE NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION 11 For the Northern District of California United States District Court 7 No. C08-00201 JW (HRL) IN RE COMUNITY LENDING, INCORPORATED, 12 Debtor 13 14 / CHRISTINA PHAM, et al. 15 CONDITIONAL ORDER RE PLAINTIFFS’ MOTION TO COMPEL DEPOSITION OF ALLEN CHRISTENSEN ALTERNATIVE REPORT AND RECOMMENDATION RE EVIDENTIARY SANCTIONS Plaintiffs, v. 16 COMUNITY LENDING INCORPORATED 17 [Re: Docket No. 150] Defendant. 18 19 / AND RELATED CROSS-ACTIONS / 20 21 Plaintiffs have for years been interested in deposing Allen Christensen, the former Chief 22 Financial Officer of defendant ComUnity Lending, Inc. (ComUnity). ComUnity previously was 23 represented by the Murray & Murray law firm, who told plaintiffs that they also represented 24 Christensen with respect to his noticed deposition. After the bankruptcy court converted 25 ComUnity’s Chapter 11 proceeding to a Chapter 7 liquidation, Trustee John Richardson was 26 appointed, and the Luce Forward Hamilton & Scripps firm was appointed as the Trustee’s 27 counsel. Christensen’s deposition never went forward because, shortly after, the court granted 28 summary judgment in plaintiffs’ favor and the Trustee appealed. 1 After the Ninth Circuit’s remand, plaintiffs renewed their request for Christensen’s 2 deposition. Initially, Trustee’s counsel did not object to the dates proposed by plaintiffs, 3 indicated that they would check on Christensen’s availability for deposition, and stated that 4 Christensen had advised them that mid-March or later was best for him. (Borden Decl. Ex. 13). 5 Plaintiffs say that such communications led them to believe that opposing counsel would 6 produce Christensen for deposition—that is, up until a few days before the noticed deposition 7 date when the Trustee advised that he did not represent Christensen and could not require him 8 to appear for a deposition. (Id.). The deposition did not proceed as noticed, and plaintiffs say 9 that their efforts to find and subpoena Christensen on their own have been unsuccessful. (See Lindstedt Decl. ¶¶ 2-6). The Trustee says that he has Christensen’s cell phone, but no other 11 For the Northern District of California United States District Court 10 information as to his whereabouts—except to say that Christensen reportedly is now somewhere 12 in Idaho tending to his mother. 13 There seems to be no dispute that Christensen is an important witness. This court is told 14 that he prepared statements pertaining to ComUnity’s financial condition during the relevant 15 period at issue in this action, and also submitted a declaration that ComUnity relied upon in 16 summary judgment and in the Ninth Circuit appeal. Additionally, plaintiffs say that defense 17 experts rely on documents prepared by Christensen; that Christensen is listed on the defense list 18 of witnesses; and that the Trustee refuses to serve Fed. R. Civ. P. 26(e) supplemental or 19 amended disclosures as to Christensen in any way. 20 The Trustee claims that he does not control Christensen and, further, that Christensen 21 wants nothing to do with the Trustee and refuses to speak with Trustee’s counsel.1 22 Nevertheless, it seems that, at a minimum, the Trustee breached a good faith obligation to give 23 plaintiffs all contact information available to him re Christensen, particularly when the Trustee 24 has listed Christensen among its own witnesses. At oral argument, Trustee’s counsel indicated 25 that he knows of sources at Diablo Management Group (DMG), or possibly other unexplored 26 27 28 1 For this reason, the Trustee repeatedly suggested at oral argument that he is justified in refusing to produce Christensen as a Fed. R. Civ. P. 30(b)(6) witness. But, the record indicates that plaintiffs are seeking to depose Christensen only in his individual capacity. (See Borden Decl. Ex. 14). 2 1 sources, who might have additional information as to where Christensen might be found. The 2 Trustee says that he did not provide this information to plaintiffs because they never asked him 3 for it. 4 Discovery is now closed. And, trial is set to begin in just under a month. Although the 5 instant motion is styled as one to compel Christensen’s deposition, plaintiffs now believe that 6 evidence preclusion is the only viable remedy. should be given an opportunity to locate and depose Christensen. This order, however, is 9 conditioned on the presiding judge’s determination that the period for fact discovery and expert 10 disclosures should be re-opened to permit plaintiffs an opportunity to take the deposition and to 11 For the Northern District of California In the interests of resolving this action on the merits, this court finds that plaintiffs 8 United States District Court 7 prepare expert disclosures that take that testimony into account. Additionally, this court 12 recommends that a special master be appointed to address any further discovery disputes that 13 may arise. 14 Alternatively, if the presiding judge decides that modification of the scheduling order is 15 not warranted, then this court recommends that he consider imposing evidentiary sanctions 16 which may be requested by plaintiffs, including that the Trustee be precluded from offering at 17 trial any testimony or evidence from Christensen, or any expert opinions based on Christensen’s 18 testimony or documents prepared by Christensen. 19 Dated: May 9, 2011 20 HOWARD R. LLOYD 21 UNITED STATES MAGISTRATE JUDGE 22 23 24 25 26 27 28 3 1 5:08-cv-00201-JW Notice has been electronically mailed to: 2 Hong-Nhung Thi Le 3 Jeffrey L. Fillerup nle@luce.com nle@luce.com, aworthing@luce.com jfillerup@luce.com, aazarmi@luce.com, aleverton@luce.com, 4 Jesse Landis Hill JLBHill@aol.com, JLBHill@aol.com 5 John Walshe Murray jwmurray@murraylaw.com 6 Jonas Noah Hagey hagey@braunhagey.com 7 8 Matthew Brooks Borden borden@braunhagey.com, cross@braunhagey.com, lindstedt@braunhagey.com 9 Robert Anthony Franklin Ronald Scott Kravitz RKravitz@LinerLaw.com, jchau@linerlaw.com, jwong@linerlaw.com, mreyes@linerlaw.com 11 Suzanne L. Decker For the Northern District of California United States District Court 10 rfranklin@murraylaw.com, bobF_94303@yahoo.com suzannedecker@sbcglobal.net 12 13 Counsel are responsible for distributing copies of this document to co-counsel who have not registered for e-filing under the court’s CM/ECF program. 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4

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