6 MAHO K. QUINENE and RAMON J. crvlL CASE no. CV0204-17 7 QUINENE, 8 Plaintiffs, 9 v. DECISION AND ORDER 10 RE: DISCOVERY ISSUES YUSUKE IMAZU, LEAP CORPORATION, 11 and LEAP PUBLICATION, 12 Defendants. 13
14 INTRODUCTION 15 This matter has been referred to the Honorable Benjamin C. Sison Jr. as an appointed 16 Discovery Master, A Motion Hearing was held on June 14, 2019, after which several discovery 17 matters were taken under advisement. Attorney Jeffrey A. Cook represents Plaintiffs Mayo K. 18 Quinine and Ramon J. Quinene and Counterclaim Defendant Ohasu Projects, LLC. Attorney 19 Carlos L. Taitano represents Defendant Yusuke Imam. Attorney Gary W .F. Gumataotao 20 represents Defendants Leap Corporation and Leap Publication, Inc. Having reviewed the 21 evidence and the arguments presented, the Court issues the following Decision and Order 22 resolving the discovery disputes in this case.
Plaintiffs Maho K. Quinene and Ramon J. Quinene (hereinafter referred to collectively 24 as "Plmtiffs" or "Mayo" or "Ramon" individually) filed a Complaint for Damages and 25 Accounting, naming Yusuke Imam (referred to as "Imam"), Leap Corporation, and Leap 26 Publication, Inc. (hereinafter collectively referred to as "Leap") as Defendants. In their 27 Complaint, Plaintiffs allege they, along with Imam, formed Leap with knazu to be the majority 28 shareholder in both companies. The Complaint however alleges that Imam was made the Decision and Order Re Discover Issues CM0204-17, Maha K Quinene & Ramon J Quinine v. Yusuke Imam, Leap Corp., and Leap Publication, Inc.
majority shareholder in both companies solely as a matter of convenience to the benefit of the pres because the parties believed this would support Imam's E-Visa application. The true intent of the parties, Plaintiffs allege, was for Plaintiffs and Imam to act as partners and to treat all assets, income, and obligations as if they were equal partners. Plaintiffs now claim that despite the parties agreement that the profits and assets be divided equally, Imam is fraudulently claiming he is entitled, because of his larger corporate stock holding in Leap, to a larger share of the assets of Leap. After stipulated eigtensions due to scheduling conflicts and attempted mediation, on January 10, 2018, Irnazu filed an Answer to the Complaint. The same day, Leap filed their Answer and Counterclaims, naming Plaintiffs and Ohasu Projects LLC (hereinafter referred to as "Ohasu") as Counterclaim Defendants. In their Counterclaim, Leap claims Plaintiffs breached their fiduciary duties to Leap by founding Ohasu and competing against them. Leap also seeks injunctive relief, claiming the tortuous actions of Plaintiffs and Ohasu con rue to cripple the business of Leap. DISCOVERY MOTI ONS All discovery motions which are pending in this matter were initiated by Defendants Imam or Leap (hereinafter individually or collectively referred to as "Defendants") and served upon Maho, Ramon, and/or Ohasu (hereinafter individually or collectively referred to as "Respondents"). The outstanding discovery motions are as follows:
l. Defendant Im am 's Motion to Com pel/Pay Expenses, served on Counterclaim Defendant Ohasu (Sep. 242018). 2. Defendant Imam's Motion to Compel/Pay Expenses, served on Plaintiff Ramon Quinene (Sep. 242018). 3. Defendant Imam's Motion to Compel/Pay Expenses, served on Plaintiff Moho Quinene (Sep. 24 2018). 4. Leap Corp./Leap Publication Motion to Compel/Pay Expenses, served on Counterclaim Defendant Ohasu (Nov. 26, 2018). 5. Leap Corp./Leap Publication Motion to Compel/Pay Expenses, served on Plaintiff Ramon Quinine (Nov. 26, 2018). 6. Leap Corp./Leap Publication Motion to Compel/Pay Expenses, served on Plaintiff Moho Quinene (Nov. 26, 2018).
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I. Insufficient Verification of Responses to Interrogatories and Request for 1 Production of Documents 2
3 The discovery motions allege that the Responses to Interrogatories and Requests for
4 Production of Documents submitted by Respondents are insufficient because they were not
5 answered under oath. Rule 33(b)(1) of the Guam Rules of Civil Procedure states the following: (b) Answers and Objections. (1) Each interrogatory shall be answered separately and fully in 6 writing under oath, unless it is objected to, in which event the objecting party shall state the 7 reasons for objection and shall answer to the extent the interrogatory is not objectionable. 8 (emphasis added). 9 The actual "Verification" by Respondents stated the following: 10 I , M A H O K QUINENE, President of Ohasu Projects, LLC, state that I am the P l ai nt i ff i n t he above-ent i ded m at t er, t hat I have read t he foregoi ng COUNT E RCL AIM DEFENDANT OHAS U PROJECTS, LLC'S 12 RESPONSE T O DEFENDANT 'S FIRST SET OF INT ERROGAT ORIES and know the contents thereof; that the same is true of my own knowledge, except 13 as to those matters alleged upon information and belief, and as to those matters, I 14 believe them to be true. /s/ M A H O K. QUINENE[.]
15 Defendants argue this verification does not make any affirmation of truth of any answers that 16 would render Respondents punishable for perjury if they were to willfully assert untrue
17 statements. Mot. to Compel at 3 (Nov. 6, 2018).
18 Guam law provides that whenever a matter is required or permitted to be supported by a sworn verification, the matter may be supported by an unsworn verification in writing by the 19 person supporting the matter, as true under the penalty of perjury, dated and in substantially the 20 following form: "I declare (or certify, verify or state) under penalty of perjury that the 21 foregoing is true and correct. Executed on (date)." 6 G.C.A. § 4308. (emphasis added). 22 Respondents admit their oversight as to their responses to Interrogatories (but not as to 23 the responses for Request for Production of Documents. See below.) and have agreed "to 24 submit a revised verification that includes the accidentally omitted language that the signame
25 is under penalty of perjury." Imam Opp'n l (Oct. 22, 2018). During the Hearing on June 14, 26 2019, Respondents admitted that they had not yet submitted a corrected verification. 27 At this time, the Court rules that Respondents have thirty (30) days from the date of this
28 order to provide sworn verifications to all Interrogatories.
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a. Sanctions for Insufficient Verification of Responses to Interrogatories 1
2 Defendants argue sanctions are appropriate for Respondents' willful failure to properly 3 respond to discovery requests, despite Respondents' subsequent contention it will submit a
4 signature under penalty of perjury regarding their responses to the interrogatories. Mot. to
5 Compel at 3 (Nov. 26, 2018). Rule 37(a)(4)(A) states that if a motion to compel is granted, or if the disclosure or 6 requested discovery is provided after the motion was filed, the Court shall impose sanctions 7 "unless the court finds that the motion was filed without the movant's first malting a good faith 8 effort to obtain the disclosure or discovery without court action, or that the opposing party's 9 nondisclosure, response, or objection was substantially justified, or that other circumstances 10 make an award of expensesunjust." 11 Respondents did not agree to correct their verification mistake until after the Motion to 12 Compel was filed. Defendants argue sanctions are mandatory whenever production is made in 13 the face of a motion to compel. However, this argument ignores the plain language of Rule 37,
14 which allows the Court to refuse sanctions if nondisclosure, response, or objection was
15 substantially justified, or that other circumstances make an award of expenses unjust. Consequently, unless Respondents can substantially justify why they have failed to promptly 16 correct their verification error or otherwise explain circumstances making an award of expenses 17 unjust, the Court will impose sanctions. The Court withholds a decision on sanctions at this 18 time, however, the Court orders Defendants to provide detailed attorney fees and costs 19 concerning the discovery motions withill dlirty (30) days dam the date of this order. 20 b. Whether "Answers" to Document Requests Must Be Made under Oath 21
22 Respondents simply did not respond to certain Document Requests. Defendants argue 23 Respondents' non-response to Document Requests Nos. 1, 7, 8, and ll are "answers" (as
24 opposed to "objections" or "production of documents") and therefore needed to be made under oath. Mot. to Compel at 4 (Nov. 26, 2018). Respondents however dispute Defendants' 25 argument that any response to a request to produce documents must be under oath. Moho 26 Opp'n 2 (Oct. 22, 2018). 27 Guam Rule of Civil Procedure 34, which sets forth the rules for document requests and 28 production, does not contain any language requiring verification of objections. HoW ever,
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several federal courts have held that a "non-response" to a document request must be made l under oath. 2 "The duty to supplement as required by Rule 26 is not very clear, and it is even less 3 clear about whether Rule 33's duty to sign a response under oath is also required for a 4 supplement. What is clear however, is that interrogatories must be answered under oath by the 5 party or objected to by an attorney, stating the reasons for the objection. Requests for 6 production of documents alternatively only requires a party to sign a response under oath when 7 the response is not a production of requested documents or an objection." Vazquez-Fernandez 8 v. Cambridge co11.. Inc., 269 F.R.D. 150, 15 55 (D.P.R. 2010). This holding has been
9 followed by other federal coMe. See O'Shea v. Am. Solar Sol.. Inc., No. l4CV894-L (RBB),
10 2016 W L 701215, at *8 (S.D. cm. Feb. 18, 2016), W arwick v. DISH Network LLC, No. 12- CV-01952-W YD-MEH, 2013 W L 788090, at *3 (D. Colo. Mar. 1, 2013), Lutes v. Kaw 11 Motors Corp., USA, No. 3:10CV1549 W W E, 2014 W L 7185469, at *1 (D. Conn. Dec. 16, 12 2014). 13 Based on the above legal authority, the Court finds that Respondents are reqMrW to 14 respond under oath with respect to those document requests they reuse or object to producing. 15 Respondents shall provide such verifications within tllirty (30) days from die date of this order. 16 However, because Guam law is not clear as to whether verification under oath is required with 17 respect to objections to document request, the Court does not find Respondents failure to 18 respond under oath to warrant sanctions at this time.
19 11. Lack of Protective Order 20 Respondents object to certain discovery requests on the basis that the requests are 21 overly broad, unduly vague, burdensome and oppressive, or would reveal customer propriety 22 information without customer's consent. Defendants argue that these blanket objections are 23 insufficient because Respondents do not explain why or how the Requests are overly broad, 24 unduly vague, or burdensome and oppressive. Moreover Defendants contend that .Respondents 25 should have sought a protective order H'om the court if Respondents truly believed that there 26 were sufficient grounds which preclude disclosure or require limiting instructions as to the 27 disclosed information. In response, Respondents simply counter that they are not required to 28 seek any such protective order.
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Guam Rule of Civil Procedure 26(c) governs protective orders and states that upon a motion accompanied by a certification that the movant has in good faith conferred or attempted to confer with each affected parties in an eHort to resolve the dispute without court action, and for good cause shown, the court may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following: (1) that the disclosure or discovery not be had, (2) that the disclosure or discovery may be had only on specified terms and conditions, including a designation of the time or place, (3) that the discovery may be had only by a method of discovery other than that selected by the party seeldng discovery; (4) that certain matters not be inquired into, or that the scope of the disclosure or discovery be limited to certain matters, (5) that discovery be conducted with no one present except persons designated by the court, (6) that a deposition, after being sealed, be opened only by order of the court, (7) that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a designated way; and (8) that the parties simultaneously file specified documents or information enclosed in sealed envelopes to be opened as directed by the court. I f the motion for a protective order is denied in whole or in part, the court may, on such terns and conditions as are just, order that any party or other person provide or permit discovery. In the case at bar, if Respondents had sought a protective order, the Court could have wholly denied the objectionable discovery request or allowed discovery with limitations on such temps and conditions as are just, to protect respondents' concerns as to the disclosure of the requested information. Because no protective order has been sought, the Court is now faced with a Motion to Compel and is forced to make a determination as to whether the requested information should either be disclosed in a normal matter or not disclosed at all. Discovery rules, including Guam Rule of Civil Procedure 34, do not specifically require a party to obtain a protective order to support its objection to a production request. However in failing to seek a
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protect order, Respondents risk sanctions being imposed on them if the Motions to Compel are l granted. 2
3 In. Discoverv Requests in Dispute
4 In general, the disputed discovery requests regard the disclosure of financial
5 information for individual plaintiffs Moho and Ramon Qvillene, and Ohasu.
6 a. Requests for personal financial information for Respondents 7 Moho and Ramon Quineue 8 The following requests to individual Plaintiffs MMe and Ramon Quinine have been 9 disputed by Plaintiffs: 10
ll a) Document request No. 2 - All documentary evidence of any transaction in excess of $500.00 between January l, 2015 and January 12, 2018 12 b ) Document request No. 4 - All filed income tax returns since January 2015 13 c) Document request No. 5 - All Bled Monthly Gross Receipts, Use, and Occupancy 14 Tax Returns since January 2015 15 d) Document request No. 6.- A11 bank statements 16 e) Document request No. 9 - A11 Financial statements of total assets, liabilities, 17 equity, revenues, income, expenses, dividends, distributions, or withdrawals since 18 January 2015. 19 f) Interrogatory No. 5 - Information about debt
20 g) Intenozatorv No. 6 - Information about ownership of money
21 h) Interrogator No. 7 - Ownership of property i ) Interrogatory No. 8 - Any money or property being held in trust 22 j ) Interrogatory No. 9 - List every bank you have a relationship with 23 k) Interrogatory No. 10 - State your net wow 24 1) Interrogatory No. ll - State name of every person you did any business with if 25 transaction was worth over $500.00 26 In objecting to the above interrogatories, Maho and Ramon argue their personal 27 financial information is irrelevant, and Defendants should only be able to discover financial 28 information of Counterclaim Defendant Ohasu. Maho Opp'n 3 (Oct. 22, 2018). Moho and
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Ramon further argue these requests for personal information constitute "a fishing expedition to harass [Plaintiffs] by seeldng financial information that has nothing to do with Plaintiffs claims or Defendant's defenses." at 4. Furthermore, Maho and Ramon argue that such requests are also unreasonably burdensome, a.nd/or will not lead to admissible evidence at Md. Ki response, Defendants argue that the requested financial disclosures are appropriate, stating that: "As directors or officers of Defendant Leap Corporation or Defendant Leap Publication, Inc., or as those Defendants' stockholders who have the power to do damage to those Defendants or Defendant Yusuke Irnazu, the Plaintiffs, who are married to each other, directly, indirectly, expressly, or in conspiracy or by agreement, assistance, or participation with or among Plaintiffs or other persons, intentionally, arbitrarily, capriciously, tortuously, recklessly, gross negligently, negligent, maliciously, oppressively, Eaudulently, or in bad faid-1, or in tortuous breach, or continuing tortuous breaches, of each of Plaintiffs' strict fiduciary duty of highest good faith, loyalty, or fair dealing to all of the Defendants, diverted, or continues to divert, the business, businesses, or business opportunities of Defendant Leap Corporation or Defendant Leap Publication, Inc. to one or both of the Plaintiffs or the Counterclaim Defendant Ohasu Projects, LLC, of which, at least, Plaintiff Maho is a member, or all of which 'fraudulent acts or conduct of Plaintiffs or the Counterclaim Defendant Ohasu Projects, LLC are adverse to the interests, or without the consent, of Defendant Leap Corporation, Defendant Leap Publication, Inc,, or Defendant Yusuke Imam, or all of those Fraudulent acts or conduct of Plaintiffs or Counterclaim Defendant Ohasu Projects, LLC are for the profit, or to the advantage, of Plaintiffs or Counterclaim Defendant Ohasu Projects, LLC."
First Amended Answer and Counterclaims of Leap, at 11 l0.ag (Jan. 18, 2018).
Guam Rule of Civil Procedure 26(b)(l) provides that "[p]arties may obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party" or "reasonably calculated to lead to the discovery of admissible evidence." In their counterclaims, Defendants allege that Plaintiffs committed fraud or deceit and breached their fiduciary obligations to Leap to the financial detriment of Defendants. The discovery requests are relevant in that the information requested would go towards whether Plaintiffs had personal dealings with potential or existing Leap customers and personally benefited financially from these transactions. The requested information also does not appear to be privileged, and is reasonably calculated to lead to the discovery of admissible evidence with respect to Defendants' eountereladms.
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The Court hereby rules that Respondents have thirty (30) days Horn the date of this order to provide Defendants with responses to the above Interrogatories and Documents Requests regarding individual finances. Again, the Court withlmolds a decision on sanctions at this time, however, the Court orders Defendants to provide detailed attorney fees and costs concerning the discovery motions within thirty (30) days ham the date of this order.
Iv. Requests for Financial Information of Respondent Ohasu
Defendants argue that several of Respondents' responses are insufficient, incomplete, or non-responsive. a) Interro gator No. 10 - State your net worth
-Defendants argue that Respondent Ohasu only provided its net income for 2017, and stated it would supplement for 2018. Defendants argue that providing only the information for net income is non-responsive.
b) Interrozatow No. ll - State name of every person you did any business with if transaction was worth over $500.00
-Defendants objected because Respondent Ohasu did not itemize each person or include addresses, emails, and telephone numbers. Ohasu stated it would supplement as necessary.
c) Document request No. 3 - Each and all business licenses between January 2016 and January 2018
-Defendants claim response was incomplete in that it only included business licenses issued on June 29, 2017.
d) Document request No. 5 - All Hled Monthly Gross Receipts, Use, and Occupancy Tax Returns since January 2015
-Defendants claim Respondent Ohasu did not produce Returns for, at least, January 2018 through June 2018.
e) Document request No. 6 - All bank statexnents
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Decision and Order Re Discover Issues .CM0204-17, Maha K Quinine & Ramon J Quinene v. Yusuke Imam, Leap Corp., and Leap Publication, Ire.
-Defendants claim Respondent Ohasu failed to include bank statements <>£ at l least, January 11, 2017 to June 10, 2017 and January 11, 2018 to July 10, 2018. 2
3 1) Document request No. 9 - All financial statements of total assets, liabilities,
4 equity, revenues, income, expenses, dividends, distributions, or withdrawals since
5 January 2015
6 -Defendants claim that Respondent Ohasu failed to include financial statements 7 between January 1, 2016 and December 31, 2016 or from January 1, 2018 to 8 August 3, 2018.
9 Defendants argue that Respondent Ohasu's responses to Document Requests Nos. 3, 5, 10 6, and 9 are insufficient, incomplete, or non-responsive and Ohasu's contentions about 11 supplementing its responses are a delay tactic or otherwise without merit because the time to 12 respond to discovery requests has passed. Leap Mot. at 4 (Nov. 26, 2018). 13 Defendants further argue that Respondent Ohasu's repeated answer that it would
14 supplement responses in the future is a delay tactic. Imam Response at 6. Ohasu was served
15 with Defendant's Documents Request on June 21, 2018, and as of the hearing on June 14, 2019, Ohasu had still not yet supplemented any of its production. Ohasu claims there has been 16 delay because the father of one of the individual plaintiffs passed away shortly before the 17 interrogatories and documents request were served. 18 W ide respect to iinanciad information for Ohasu, Respondents concede that such 19 information is discoverable. However, Defendants object that while some information was 20 provided, Ohasu's disclosures were incomplete or non-responsive and its con rued failure to 21 supplement without justification, along with the continued failure to provide verification for 22 interrogatory requests, possibly demonstrates in intentional delay tactic on the part of Ohasu. 23 During the Motion Hearing, Respondents claimed that they would provide additional
24 financial information for Ohasu. Respondents have claimed that they would do so for over a
25 year at this point. Respondents' failure to supplement discovery necessitated Defendants' tiling of motions to compel. Pursuant to Rule 37(a)(4)(A), the Court will impose sanctions 'innless 26 the court finds that the motion was filed without the movant's first making a good faith effort to 27 obtain the disclosure or discovery without court action, or that the opposing party's 28
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nondisclosure, response, or objection was substantially justified, or that other circumstances l make an award of expenses unjust." 2 The Court hereby rules that Respondents have thirty (30) days Hom the date of this 3 order to provide Defendants with responses to the above Interrogatories and Documents 4 Requests regarding Ohasu's finances. Again, the Court Mthholds a decision on sanctions at this 5 time. However, the Court orders Defendants to provide detailed attorney fees and costs 6 concerning the discovery motions within thirty (30) days from the date of this order. 7 CONCLUSION 8
9 Based on the foregoing, the Court GRANTS the Defendants' Motions to Compel and
10 orders the following to be completed within thirty (30) days of this order:
1. Respondents shall provide sworn verifications to their responses to Interrogatories 12 2. Respondents shall provide sworn verifications to the Document Requests they refuse or
13 object to producing.
14 3. Respondents shall provide answers to the Interrogatories regarding individual finances.
4. Respondents shall provide all available documentation regarding individual finances as 15 requested in Defendants' Document Requests. 16 5. Respondents shall supplement its answers to Interrogatories regarding Ohasu's finances. 17 6. Respondents shall supplement its documentation regarding Ohasu's finances as 18 requested in Defendants' Document Requests. 19 7. Defendants shall provide detailed attorney fees and costs concerning all the discovery 20 motions tiled in this matter. 21 The Com withholds judgment on the issue of sanctions at this time. 22
24 SO ORDERED, this (0 day of uvw 2019. 25 /<~» 26 5hw;E v »A count we `27 » \ auwmwudao um a wav aW .m1uu1harasswasphaseInma 28 ONORABLE BENJAMIN c. SISON, JR. Z"C£»°§ld';ax Cooke(IO DJr 2s T ad ano; Discovery Master and ram 6"md*°°*"° Page l l of 11 ulgl;*l. - . Tum: R P M Mesa SIIUIIW MUM mum