Judge: Curtis A. Kin, Case: 19STCV44577, Date: 2022-12-15 Tentative Ruling

Case Number: 19STCV44577    Hearing Date: December 15, 2022    Dept: 72

MOTION TO QUASH DOE AMENDMENT

Date:               12/15/22 (8:30 AM)

Case:               Paul Rodriguez et al. v. The Ozurovich Group, Inc. et al. (19STCV44577)

TENTATIVE RULING:

Specially Appearing Defendant Michael Shabtaie’s Motion to Quash Plaintiffs’ Doe Amendment to the First Amended Complaint is GRANTED.

Specially appearing defendant Michael Shabtaie moves to quash the amendment to the First Amended Complaint (“FAC”) substituting him in place of Doe 1.

With respect to the circumstances concerning Shabtaie’s addition to this action as a defendant, plaintiffs Paul Rodriguez and Rodriguez Entertainment, Inc. defined “Defendants” to include Doe 1 in the Complaint and First Amended Complaint (“FAC”). (Compl. at 1:1-8; FAC at 1:1-9.) Doe 1, among other Doe defendants, allegedly participated in, counseled, or helped conceal defendants’ wrongful acts. (Compl. ¶ 11; FAC ¶ 11.)

Plaintiffs’ Complaint was initially filed on December 11, 2019.  The FAC was filed on September 10, 2020.  Plaintiffs did not name Shabtaie in place of Doe 1 until they filed an Amendment to the operative complaint on April 15, 2022. (Dean Decl. ¶ 8 & Ex. E.) 

“If the terms of Code of Civil Procedure section 474 have not been complied with, the purported defendant has not been named as such in the complaint. A service upon one not named in a complaint does not confer jurisdiction to proceed upon the complaint against him, and a motion to quash is proper.” (Maier Brewing Co. v. Flora Crane Service, Inc. (1969) 270 Cal.App.2d 873, 875.)  Under CCP § 474, “when the plaintiff is ignorant of the name of a defendant, he must state that fact in the complaint.” This requirement is mandatory. (Kerr-Mcgee Chemical Corp. v. Superior Court (1984) 160 Cal.App.3d 594, 598.) Plaintiffs have never alleged that they were ignorant of the names of the Doe defendants. (See Compl. ¶ 11; FAC ¶ 11.) Accordingly, for this reason alone, defendant’s motion to quash should be granted.

Even if plaintiffs had alleged they were ignorant of the names of the Doe defendants, defendants demonstrate that plaintiffs unreasonably delayed in substituting Shabtaie in place of Doe 1. “[A] defendant named in an action by a Doe amendment under section 474 may challenge the amendment by way of an evidence-based motion, which argues that the plaintiff ‘unreasonable delayed’ his or her filing of the challenged amendment.” (A.N. v. County of Los Angeles (2009) 171 Cal.App.4th 1058, 1067.)

Shabtaie argues that plaintiffs first learned of his identity on July 27, 2021, when plaintiffs took the deposition of defendant Andrew Ozurovich, who managed plaintiff Rodriguez’s finances. (Compl. ¶ 32; FAC ¶ 32.) Ozurovich testified that Shabtaie was the tax preparer on plaintiffs’ accounts. (Dean Decl. ¶ 5 & Ex. C at 17:10-12, 17:20, 41:21-22.) Moreover, Shabtaie was one of four individuals with access to plaintiff Rodriguez’s accounts, according to Ozurovich. (Dean Decl. ¶ 5 & Ex. C at 17:10-24, 41:15-24.)

In the Complaint and FAC, plaintiffs alleged that defendants failed to file taxes on behalf of plaintiff Rodriguez from 2012 through 2016. (Compl. ¶ 42; FAC ¶ 50.) In the FAC, plaintiffs also alleged that defendants concealed the failure to file tax returns from Rodriguez. (Compl. ¶ 42; FAC ¶ 50.) Plaintiffs allegedly discovered defendants’ failure to file taxes on Rodriguez’s behalf in 2018 when his wages were garnished. (Compl. ¶ 44; FAC ¶ 50.)

Because plaintiffs allege that Rodriguez’s tax returns were not filed and plaintiffs learned that Shabtaie was charged with preparing plaintiffs’ tax returns, plaintiffs had reason to know since at least July 27, 2021 that Shabtaie should be named as a defendant. Without any sufficient or reasonable explanation for delay, plaintiffs did not add Shabtaie as a defendant until approximately nine months later on April 15, 2022.

Plaintiffs argue that they discovered Shabtaie’s wrongdoing during the deposition of defendant Marinka Sjoberg, who also managed Rodriguez’s finances, on October 19, 2021. (Samini Decl. ¶¶ 3, 4; Compl. ¶¶ 32, 37; FAC ¶¶ 32; 37.) Sjoberg testified that Shabtaie trained her. (Dean Decl. ¶ 7 & Ex. D at 12:21-22.) Plaintiffs also maintain that they learned about the “co-mingling of the funds in Plaintiffs’ accounts” from the deposition of Sjoberg. (Samini Decl. ¶ 4.) It is, however, unclear what role co-mingling of funds in plaintiffs’ accounts plays in Shabtaie’s potential liability. In any event, even if October 19, 2021 were viewed as the day plaintiffs should have considered naming Shabtaie as a defendant, plaintiffs still filed the Doe amendment approximately five months later and provide no reasonable or sufficient explanation for such delay.

“‘[U]nreasonable delay’...includes a prejudice element, which requires a showing by the defendant that he or she would suffer prejudice from plaintiff's delay in filing the Doe amendment.” (A.N., 171 Cal.App.4th at 1067.) Plaintiffs’ delay in naming Shabtaie is unreasonable given that, as of April 15, 2022, when Shabtaie was added to this action, trial was set for May 16, 2022. (9/13/21 Minute Order.) On April 26, 2022, upon plaintiffs’ ex parte application, trial was continued to August 15, 2022. (4/27/22 Minute Order.) The discovery cut-off date remained tied to the former May 16, 2022 trial date. (4/27/22 Minute Order.)

Shabtaie was not served the summons and FAC until September 6, 2022. (Dean Decl. ¶ 10 & Ex. F.) Accordingly, given that Shabtaie was served after the discovery cut-off, Shabtaie has had no reasonable opportunity to conduct discovery regarding the allegations against him.  The fact that counsel for Shabtaie also has represented the other defendants does not sufficiently mitigate against such prejudice, as counsel for Shabtaie had no reason to necessarily fashion his strategy and approach to discovery to protect Shabtaie’s interests while engaging in discovery with respect to the other defendants prior to plaintiffs adding Shabtaie as a defendant on eve of trial.  Indeed, on August 5, 2022, the Court held a final status conference and, among other things, ruled on the parties’ various motions in limine in preparation for the August 15, 2022 trial. (8/5/22 Minute Order.) Even though Shabtaie had not been served with the summons and FAC, the parties were prepared to proceed, and would have proceeded, to trial as scheduled on August 15, 2022.  Adding Shabtaie at this late stage of the proceedings would be prejudicial to him.

The motion is GRANTED. The Amendment to Complaint substituting Michael Shabtaie in place of Doe 1, filed on April 15, 2022, is QUASHED.