Volkswagen of America, Inc. v. Superior Court

California Court of Appeal Jun 25, 1971 No. Civ. 38004Published

Before: Dunn

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Holding. The court held that the trial court's order striking the petitioner's answer was invalid because the witnesses were not officers, directors, or managing agents of the petitioner, and the petitioner lacked the authority to compel their appearance.

Issues

Whether a party can be sanctioned for failing to produce witnesses for deposition who are not officers, directors, or managing agents of that party.
Whether a subsidiary corporation can be compelled to produce employees of its parent corporation for discovery purposes.

Disposition. Peremptory writ of prohibition issued.

Quotations verified verbatim against the opinion

“Accordingly, the effort to take their depositions by notice to VWOA was invalid and furnished no ground for the respondent court’s order.”

“There was no showing that VWOA could require employees of VWAG, its parent, to appear and testify anywhere.”

Opinion

DUNN, J.

March 19, 1971, we issued an alternative writ to respondent court, directing it to show cause why its order of December 17, 1970 (as modified February 9, 1971), striking petitioner’s answer to the com

[479]

plaint filed by Hyatt

(real party in interest), should not be annulled. We have now determined that a peremptory writ of prohibition should issue.

(Lund

Superior Court

(1964) 61 Cal.2d 698, 708-710 [39 Cal.Rptr. 891,394 P.2d 707].)

On February 24, 1970, Hyatt filed in respondent court a complaint for personal injuries and wrongful death, and in March 1970 Volkswagen of America, Inc. (VWOA) filed its answer thereto. On July 21, 1970, Hyatt served on petitioner VWOA a notice of taking depositions of Frederick Goes and Kurt Goebel, two employees of Volkswagenwerk, A.G. (VWAG), to be taken orally on August 31 and September 1 and 2, 1970, in the offices, of the American Consulate General in Hamburg, Federal Republic of (West) Germany. Neither the petitioner’s attorneys nor the witnesses appeared; Hyatt’s motion (under Code Civ. Proc., § 2034) to strike the answer of petitioner, VWOA, was heard in December resulting in the order of December 17, 1970, already mentioned. Petitioner’s motion to vacate the order was denied.

The record clearly reflects that Volkswagen of America, Inc. (VWOA) is a New Jersey corporation with its offices and principal place of business in that state. Volkswagenwerk, A.G. (VWAG), a West German corporation, owns all of the issued and outstanding stock of VWOA but the latter corporation operates as a distinct and separate entity, engaged in purchasing from VWAG and importing into the United States, Volkswagen vehicles, parts and accessories and selling them to regional distributors.

Pursuant to Code of Civil Procedure section 2019, one party may take the deposition “of a party to the record” without serving a subpena if proper notice is given. The statute extends this right to the taking of the deposition of “an officer, director or managing agent of any such party.” Messrs. Goes and Goebel are not, nor is it claimed that they are, officers, directors, managing agents or even employees of VWOA. They reside in Wolfsburg, West Germany, where Goes “is the engineer in charge of testing Volkswagen vehicles for Volkswagenwerk, A.G.”; Goebel “is the engineer in charge of vehicle stability and crashworthiness” for the same employer. No other statement or showing as to their capacities was made by Hyatt.

Volkswagen of America, Inc. v. Superior Court

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DUNN, J.

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