Pace Diversified Corporation v. Macpherson Oil Company

UNITED STATES BANKRUPTCY COURT [1] EASTERN DISTRICT OF CALIFORNIA 2 FRESNO DIVISION [3] 4 In re ) Case No. 17-11028-B-11 ) 5 PACE DIVERSIFIED CORPORATION, ) [6] ) ) Debtor. ) 7 ) ) 8 PACE DIVERSIFIED CORPORATION, a ) ) A dv. Proceeding No. 18-01006-B 9 California corporation; DARK ) ROCK, LLC, a California limited ) DC No. BBR-6 10 liability company, ) ) 11 Plaintiffs, ) ) 12 ) v. ) 13 ) 1 14 5 M C BA a RC l AP i UH f CE o HR r TS n ,O i N a a nO c I o iL r n p dC o iO r vM a iP t dA i uN o aY n l; ,, Sa A NDRA ) ) ) ) ) 16 Defendants. ) ) 17 ) MACPHERSON OIL COMPANY, a ) 18 California corporation, ) 19 ) ) Counter-Plaintiff, ) [20] ) 21 v. ) ) 22 PACE DIVERSIFIED CORPORATION, A ) ) California corporation; DARK 23 ROCK, LLC, a California limited ) ) 24 liability company, ) ) 25 Counter-Defendants. ) ) 26 ) [27] 28 MEMORANDUM DECISION 1 PERTINENT FACTS 2 This case is about ownership of fee and mineral interests 3 in a Kern County oil field. Over nine months after fact 4 discovery closed in this case, Plaintiffs and counter-defendants 5 Pace Diversified Corporation and Dark Rock LLC (collectively 6 “PDC”) learned Defendant and counter-claimant Macpherson Oil 7 Corporation (“MOC”) claimed one third ownership in the oil 8 field. MOC claims the interest under a quit claim deed signed by 9 Rebecca Cramer, an heir to the Braucht family. The Braucht 10 family has historically owned the interests. The deed was 11 signed just before PDC learned of MOC’s claim. Earlier, MOC 12 claimed the same or similar interests through other transfers. 13 PDC claims rights in the same interest under a preceding “Pace14 Olcese” lease. 15 PDC also learned that a “Landman” employed by MOC’s agent, 16 Maverick Petroleum, Yvonne Hicks, allegedly told Cramer and 17 perhaps other Braucht heirs the land and mineral interests were 18 “unleased.” Curiously, the same day of the Cramer to MOC deed, 19 Cramer signed a “ratification” of the lease interest to PDC. 20 PDC and MOC agreed to voluntarily exchange documents 21 concerning the Cramer deed and lease ratification. The court 22 vacated a pre-trial conference and modified the discovery cut 23 off to accommodate PDC and MOC’s stipulation allowing limited 24 discovery. After the informal document exchange, PDC wanted to 25 further depose Hicks—who was deposed about one year ago—and to 26 depose Cramer—who has not been deposed. MOC opposes the 27 depositions. So, the matter is before the court under the 28 parties’ stipulation providing for mutual submissions of briefs 1 and other documents. The court determined a hearing was 2 unnecessary and is deciding the matter based on the written 3 submissions. [4] 5 CONTENTIONS 6 PDC contends there is cause to permit both depositions 7 because after the Cramer deed, MOC changed its legal position 8 from having acquired the Braucht interests by lease to acquiring 9 the interests by deed and other transfers. So, PDC contends the 10 depositions are necessary. They also contend that Hicks 11 represented to the Braucht heirs, including Cramer, the Braucht 12 interests were not subject to a lease though Hicks knows this 13 litigation has been pending and was aware of PDC’s claims. PDC 14 points to the fact that Hicks’ deposition was taken over one 15 year ago; long before the 2019 transfers discovered only three 16 months ago. Cramer has not previously been deposed in this 17 adversary proceeding and PDC contends should answer questions 18 about the transactions. 19 MOC claims any information about Hicks or Cramer is not 20 probative on the extent of any interests because Cramer’s 21 predecessors held title in joint tenancy. When one of the joint 22 tenants died, the surviving tenant received title free of Pace’s 23 claimed interest since the surviving tenant did not sign the 24 “Pace-Olcese” lease. MOC also points out that the 25 “ratification” Pace received was not recorded before MOC 26 recorded the Cramer quit claim deed. PDC had contacts with 27 Cramer at the same time MOC did, MOC claims, so no new 28 information can be gleaned from the depositions. MOC contends 1 that Hicks’ representations that the Braucht interests were free 2 of the claimed Pace lease is consistent with MOC’s theory why 3 its’ claim to title has precedence over PDC. [4] 5 ANALYSIS 6 The court’s discretion in dealing with discovery matters is 7 beyond dispute. See Fed R. Civ. P. 26 (b)(2) Fed. R. Bankr. P. 8 7026). Leave of court is necessary to depose a person twice. 9 Fed. R. Civ. P. 26 (a) (2). The court finds cause to permit the 10 second deposition of Ms. Hicks and to permit the “post-discovery 11 cutoff” deposition of Ms. Cramer. 12 MOC’s concern that the information to be obtained is not 13 probative because of its legal theory that Cramer’s 14 predecessor’s death terminated the “Pace-Olcese lease” is not 15 persuasive on this motion. That argument is equivalent to the 16 contention that the admissibility of the evidence revealed in 17 discovery is the standard for allowing discovery. That, of 18 course, is not the case. See Fed. R. Civ. P. 26 (b)(1). 19 PDC’s contacts with Cramer during the last year does not 20 obviate the need for discovery. First, a deposition is not 21 limited to witnesses who a party may not have contacted about 22 the transaction underlying the litigation. Second, again the 23 standard for allowing discovery does not include the lack of or 24 amount of previous contact. 25 MOC has not persuaded the court that either the second 26 deposition of Hicks or the Cramer deposition will result in any 27 harm or burden on MOC. MOC has not demonstrated that either 28 deposition is cumulative or that there is a less expensive way 1 for PDC to get the information. See Fed. R. Civ. P. 26 (b) (2) 2 (C). See, Christy v. Pennsylvania Turnpike Commission, 160 3 F.R.D. 51, 53 (E.D. Penn. 1995). The late exchange of the 4 documents further justifies the discovery. See, Botell v. U.S., 5 2:-11-cv-1545 GEB GGH, 2013 U.S. Dist. LEXIS 12075 (Jan. 29, 6 2013, E.D. Cal.) citing Christy. 7 Finally, the question of “good cause” to permit discovery 8 after the cut off is within the trial court’s discretion and 9 reviewing courts are highly deferential to the trial court’s 10 decision. See, Rivera-Almodovar v. Instituto Socioeconomico 11 Communitario, 730 F. 3d 23, 26 (1st Cir. 2013). The parties’ 12 stipulation for document production, the produced documents, the 13 fact that Cramer was not deposed before and the limits placed on 14 this discovery by the court supports granting the request. 15 The second deposition of Hicks will be limited to the 2019 16 transaction the parties exchanged documents about. No further 17 deposition of Ms. Hicks will be permitted on any topic addressed 18 in the first deposition. The second Hicks deposition will be 19 limited to two hours of direct examination by PDC’s counsel. 20 There is no time limit on MOC’s cross examination, if any. 21 The deposition of Ms. Cramer will be permitted but only 22 about the 2019 transactions that are the subject of the informal 23 document exchange. The court will also authorize the deposition 24 by remote means under Fed. R. Civ. P. 30 (b)(4). The precise 25 method of taking and recording the deposition shall be left to 26 the parties. If the parties cannot agree on a method to 27 conduct, record or transcribe the Cramer deposition, either 28 party may bring the matter before the court. 1 PDC’s counsel shall prepare an order consistent with this 2 ruling. Order to be approved as to form by MOC’s counsel. [1] Instructions to Clerk of Court 2 Service List - Not Part of Order/Judgment [3] The Clerk of Court is instructed to send the Order/Judgment 4 or other court generated document transmitted herewith to the parties below. The Clerk of Court will send the Order via the [5] BNC or, if checked X , via the U.S. mail. [6] 7 T. Scott Belden P.O. Box 9129 8 Bakersfield CA 93389 [9] Gregory S. Powell 10 2500 Tulare St #1401 Fresno CA 93721 [11] 12 Riley C. Walter 205 E. River Park Circle, Ste. 410 13 Fresno CA 93720 [14] Brian Becker 15 550 N Brand Blvd #2100 Glendale CA 91203 [16] 17 Grover H. Waldon Clifford Brown 18 1430 Truxtun Ave Suite 900 Bakersfield CA 93301-5207 [19] 20 Jean M. Pledger 1925 G St 21 Bakersfield CA 93301