Judge Daniel M. Crowley, Case Number: 23STCV45088, Date: 2024-02-21 Tentative Ruling

Defendants New Hope Imaging Services, LLC’s and Adam Avelardo Perez’s demurrer to the second amended complaint of Plaintiff Allstate Insurance Company is overruled as to the 1st and 2nd causes of action.

Defendants New Hope Imaging Services, LLC (“New Hope”) and Adam Avelardo Perez (“Perez”) (collectively, “New Hope”) demur to each cause of action in Plaintiff People of the State of California, ex rel. Allstate Insurance Company’s (“Allstate”) (“Plaintiff”) second amended complaint (“SAC”). (Notice of Demurrer, pgs. 1-2; C.C.P. §430.10(e).)

Defendants also move to strike Plaintiff’s SAC as untimely and request this Court dismiss the SAC in its entirety. (Notice MTS, pg. 2.)

Plaintiff filed its initial complaint as a qui tam relator on behalf of the People of the State of California and on behalf of itself on December 10, 2021. Plaintiff filed its FAC on October 21, 2022, against New Hope and Non-moving Defendants Alan Todd Turner, M.D. (“Turner”) and George Mednik, M.D. (“Mednik”) (collectively, “Defendants”) alleging two causes of action: (1) violation of CIFPA, Insurance Code §1871.7; and (2) violation of the Unfair Competition Law, Business & Professions Code §17200 et seq. On June 15, 2023, this Court sustained Defendants’ demurrers to the 1st and 2nd causes of action with 30 days leave to amend. (6/15/23 Minute Order.) On September 18, 2023, Plaintiff filed its operative SAC alleging the same two causes of action against Defendants.

New Hope filed its demurrer on October 23, 2023, and its motion to strike on October 24, 2023. On February 6, 2024, Plaintiff filed its oppositions. On February 13, 2024, New Hope filed its replies.

Before filing a demurrer, the demurring party must meet and confer in person, by telephone, or by video conference with the party who filed the pleading to attempt to reach an agreement that would resolve the objections to the pleading and obviate the need for filing the demurrer. (C.C.P. §430.41(a), emphasis added.)

New Hope’s counsel declares he corresponded with Plaintiff’s counsel on October 10, 2023, in an attempt to informally resolve the issues in the instant demurrer. (Decl. of Chorbajian ¶2, Exh. A.) New Hope’s counsel declares his office engaged in a telephone conference with Plaintiff’s counsel on October 13, 2023, but the parties were unable to resolve their disputes without Court intervention. (Decl. of Chorbajian ¶3.) New Hope’s meet and confer declaration is sufficient under C.C.P. §430.41. Therefore, the Court will consider the instant demurrer.

Plaintiff alleges Defendants carried out a scheme to defraud insurance companies that cover claims for services related to Magnetic Resonance Imaging (“MRI”). (SAC ¶2, Exh. A.)

Plaintiff alleges Defendant Perez, as an unlicensed layperson, established and ran New Hope and has never been licensed to practice medicine in any form. (SAC ¶4.) Plaintiff alleges Defendant Perez passed off Defendant New Hope—both to the public and to insurers—as a legitimate diagnostic imaging provider with multiple locations across California. (SAC ¶4.) Plaintiff alleges Perez hired Defendant Turner, a licensed radiologist, to pose as New Hope’s medical director, even though Turner did not oversee New Hope’s operations and had little do with New Hope at all. (SAC ¶4.) Plaintiff alleges under this façade of legitimacy, the unlicensed Perez ran New Hope, churning out countless bills to insurers which earned them millions of dollars in unlawful profit. (SAC ¶4.)

Plaintiff alleges New Hope networked with and established relationships with sources of patients for New Hope to provide unlicensed “treatment” to—personal injury attorneys and sham factoring companies. (SAC ¶5.) Plaintiff alleges the attorneys would directly or indirectly refer their allegedly injured clients to New Hope to obtain diagnostic imaging such as MRIs and reports documenting the MRI findings and impressions. (SAC ¶5.) Plaintiff alleges New Hope would administer the MRI and contract out the professional interpretation of the images to remote radiologists, paying them low rates on a per-volume basis. (SAC ¶5.) Plaintiff alleges New Hope then passed off the contracted doctors’ services as New Hope’s own by preparing reports on New Hope letterhead and issuing bills that identified New Hope as the provider of the professional services rendered and grossly marked up the services’ cost. (SAC ¶5.) Plaintiff alleges this scheme enabled New Hope and its owner to bill for medical services which they could not legally provide and thus could not legally bill. (SAC ¶5.) Plaintiff alleges because Defendants submitted (or caused to be submitted) at least 398 fraudulent claims to Allstate, California law imposes penalties of at least $1,990,000 and assessments of up to $4,200,000. (SAC ¶¶6, 7, Exh. A.)

New Hope demurs to the 1st and 2nd causes of action on the basis they do not state facts sufficient to constitute causes of action. (Demurrer, pgs. 3-4; C.C.P. §§430.10(a), (e), (f).)

(a) It is unlawful to knowingly employ runners, cappers, steerers, or other persons to procure clients or patients to perform or obtain services or benefits pursuant to Division 4 (commencing with Section 3200) of the Labor Code or to procure clients or patients to perform or obtain services or benefits under a contract of insurance or that will be the basis for a claim against an insured individual or his or her insurer.

(b) Every person who violates any provision of this section or Section 549, 550, or 551 of the Penal Code shall be subject, in addition to any other penalties that may be prescribed by law, to a civil penalty of not less than five thousand dollars ($5,000) nor more than ten thousand dollars ($10,000), plus an assessment of not more than three times the amount of each claim for compensation, as defined in Section 3207 of the Labor Code or pursuant to a contract of insurance. The court shall have the power to grant other equitable relief, including temporary injunctive relief, as is necessary to prevent the transfer, concealment, or dissipation of illegal proceeds, or to protect the public. The penalty prescribed in this paragraph shall be assessed for each fraudulent claim presented to an insurance company by a defendant and not for each violation.

False claim actions are subject to “heightened fraud-like pleading requirements.” (State of California ex rel. McCann v. Bank of America, N.A. (2011) 191 Cal.App.4th 897, 906.) “As in any action sounding in fraud, the allegations of a [California False Claims Act] complaint must be pleaded with particularity. The complaint must plead ‘the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.’” (Id., internal citations omitted.) Specificity is necessary in alleging claims under Insurance Code §1871.7(b), as it incorporates Penal Code §550, which in turn requires a specific intent to defraud. (People v. Blick (2007) 153 Cal.App.4th 759, 772-775 [a violation of Penal Code §550 requires that the person charged must “intend to commit a fraud”].)

Plaintiff alleges although Defendant Turner is a California-licensed physician and is New Hope’s purported “medical director,” Turner does nothing to operate the business and neither supervises nor directs the administration of the MRIs for which New Hope bills. (SAC ¶82.) Plaintiff alleges Turner is medical director in name only—Perez simply holds Turner’s name out to give the appearance that New Hope is operated by a licensed medical professional and to feign legitimacy and compliance with California law that prohibits unlicensed laypersons from providing medical services. (SAC ¶82.) Plaintiff alleges Perez controls all aspects of New Hope’s operations. (SAC ¶82.)

Plaintiff alleges Turner also is engaged in an unlawful referral and kickback arrangement with New Hope. (SAC ¶83.) Plaintiff alleges according to sworn deposition testimony by Turner, Perez approached him to ask if Turner would provide professional interpretation services for New Hope. (SAC ¶83.) Plaintiff alleges Perez and Turner agreed that New Hope would pay Turner $33 per MRI interpreted with the expectation that Turner would prepare his MRI reports within one to two days of reviewing each scan. (SAC ¶83.) Plaintiff alleges on information and belief that the low fees charged by Turner and other radiologists who contract with New Hope are consideration for New Hope’s continuous referral of patients to them. (SAC ¶83.) Plaintiff alleges as valuable consideration in exchange for those referrals, Turner waives any entitlement to bill for his professional services and instead allows New Hope to misrepresent his medical opinions as its own by placing the reports on New Hope’s letterhead. (SAC ¶83.)

Plaintiff alleges New Hope’s bank records reveal at least 56 transactions, totaling $215,927.50, between it and Turner in furtherance of their unlawful referral arrangement and kickback scheme. (SAC ¶84.)

Plaintiff alleges in addition to paying New Hope for unlawful kickbacks, Turner acts as a sham medical director for New Hope (to help New Hope pull off the scheme), and Turner understands that he is merely a sham medical director for New Hope. (SAC ¶85.) Plaintiff alleges Turner testified that he did not serve as medical director for another facility because “[a] doctor owns it. So they don’t need me as a medical director.” (SAC ¶85.) Plaintiff alleges at a deposition of Turner in a separate matter, he could not identify the number of persons New Hope employs, admitted that he held no supervisory authority over any New Hope employees, and admitted that New Hope did not pay him for his service as medical director, despite his role as the purported medical director. (SAC ¶85.) Plaintiff alleges Turner testified, “I look at the images. I’m only responsible for the images.” (SAC ¶85.)

Plaintiff alleges in exchange for the referral of patients and the payment of $30-40 per MRI, the contracting teleradiologists allowed Perez to bill insurers as he saw fit, without supervision or review, and allowed Perez to keep the carriers’ payments as a kickback for the referral of patients. (SAC ¶86.) Plaintiff alleges that, motivated by the prospect of substantial illegal profit, Perez and New Hope prepared and caused to be presented hundreds of false, fraudulent, and misleading bills to insurance companies. (SAC ¶86.) Plaintiff alleges each bill set the total fee at roughly $2,200 per MRI—almost ten times the actual professional fees incurred for the service and far in excess of the reasonable value of the technical component of the MRI. (SAC ¶86.) Plaintiff alleges that having exclusive and unfettered control of the billing and collection for the services provided, without any input, supervision, or review by the providers of the medical services, Defendants pocketed the difference between what the provider charged for the MRI “interpretation” and what they deceived the insurers into paying. (SAC ¶86.)

Plaintiff alleges on information and belief that New Hope’s diagnostic radiology services were marketed to attorneys representing personal injury claimants, to physicians, chiropractors, and other health care providers who treat personal injury claimants, and to sham factoring companies (who purport to purchase accounts receivable related to treatment of personal injury patients, but who simply steer patients to New Hope). (SAC ¶87.) Plaintiff alleges Perez solicited the referral of clients and patients to New Hope for MRI services, knowing that they would personally reap tremendous financial benefit from each referral due to the contracts they had with factoring companies and radiologists. (SAC ¶87.)

Plaintiff alleges on information and belief that because the scheme could not function without a steady flow of patients, Perez solicits the referral of personal injury and workers’ compensation claimants from attorneys and other providers that service personal-injury patient populations. (SAC ¶88.) Plaintiff alleges on information and belief that the attorneys and providers, in turn, refer their clients and patients to New Hope. (SAC ¶88.) Plaintiff alleges because New Hope bills at such a high rate, the value of patients’ claims inflate beyond their true value, incentivizing further referrals to New Hope. (SAC ¶88.)

Plaintiff alleges Perez or others acting at his or New Hope’s direction solicits referrals from sham factoring companies, who purchase accounts receivable (“AR”) from providers who treat lien-based, personal injury patients and who foster relationships with personal injury attorneys by assisting those attorneys in scheduling their clients with providers with which they have preexisting agreements to “purchase AR,” i.e., unlawfully refer patients in exchange for unlawful kickbacks. (SAC ¶89.)

Plaintiff alleges in describing New Hope’s relationship with a sham factoring company, Perez previously testified that the company “refer[s] us [New Hope] patients. We do the exams, and they pay us a fee for the services. They pay us a fee for the [bill associated with the] MRI service.” (SAC ¶90.)

Plaintiff alleges with that sham factoring company, New Hope entered “an agreement that they [sham factoring company] refer us [New Hope] patients at a certain price.” (SAC ¶91.) Plaintiff alleges specifically, the sham factoring company paid New Hope $300 per MRI service rendered on the referred patients, a significantly reduced price compared to the $2,200 billed to payors. (SAC ¶91.)

Plaintiff alleges in this way, Perez, through New Hope, employs the sham factoring companies within the meaning of Insurance Code §1871.7(a) to “steer” patients (to Perez, New Hope, and the tele-radiologists). (SAC ¶92.) Plaintiff alleges on information and belief that the agreements between New Hope and the factoring companies amount to a quid pro quo because they pay and receive consideration in exchange for the referral of patients. (SAC ¶92.) Plaintiff alleges that conduct violates Insurance Code §§750 and 1871.7(a). (SAC ¶92.)

Plaintiff alleges the teleradiologists similarly “employ” Perez within the meaning of Insurance Code §1871.7(a) to “steer” patients to New Hope by offering the companies significantly reduced prices for the referred patients’ MRI services. (See State ex rel. Wilson v. Superior Court (2014) 227 Cal.App.4th 579, 609 [defendants could be liable if they “effectively employed physicians and others to act as runners and cappers, paying them for the purpose of procuring patients whose prescriptions will be covered by insurance.”].) (SAC ¶93.) Plaintiff alleges on information and belief that the agreements between New Hope and the teleradiologists, including Turner and Mednik, amount to a quid pro quo because the radiologists pay (through disproportionately discounted professional services) and receive consideration in exchange for New Hope’s referral of patients in violation of Business and Professions Code §650 and Insurance Code §§750 and 1871.7(a). (SAC ¶93.)

Plaintiff alleges New Hope paid Turner at least $215,927.50 in furtherance of their scheme. (SAC ¶94.) Plaintiff alleges New Hope’s bank records further reflect that New Hope paid Mednik at least $43,830 in furtherance of their scheme. (SAC ¶95.)

Plaintiff alleges Perez exercises complete control over all aspects of New Hope’s operation, including selecting the diagnostic radiology machines used to scan patients, selecting physicians to read and interpret “MRI studies,” preparing billing statements to be presented to insurers, including determining the amount billed for the services and billing codes used, if any, collecting payment for the services, banking the payments, and distributing profits. (SAC ¶96.)

Plaintiff alleges in carrying out this fraud scheme, Perez engaged in the unlawful practice of medicine: he selected the radiology sites based on his personal commercial advantage and profit without regard to patient health, safety, or well-being, and in doing so acted independent of any licensed physician. (SAC ¶97.)

Plaintiff alleges while Perez is at the helm of the scheme, his fraudulent conduct could not occur without the aid and assistance of the radiologists with whom he contracts and by whom he is employed to steer patients. (SAC ¶101.) Plaintiff alleges on information and belief that those radiologists, including Turner, Mednik, and certain DOE Defendants, give Perez unfettered control of billing for their professional services in exchange for a steady flow of patient referrals. (SAC ¶101.) Plaintiff alleges on information and belief that they knowingly allow and enable Perez to pass off their services as those of New Hope and mark up the fees for their professional services so that he can share in them, in violation of California law that prohibits professional fee-splitting. (SAC ¶101.) Plaintiff alleges on information and belief that and in exchange for the referral of patients, the teleradiologists agree to receive reduced fees for their efforts and completely surrender all control of billing, collection, and profit to Perez and New Hope. (SAC ¶101.) Plaintiff alleges the teleradiologists therefore employ Perez within the meaning of Insurance Code §1871.7(a) to “steer” patients to them by allowing him to bill as he pleases and, as a result, share in their professional fees as part of a functional “fee-split.” (SAC ¶101.) Plaintiff alleges on information and belief that the agreements between Perez and the radiologists amount to a quid pro quo because they pay and receive consideration in exchange for the referral of patients. (SAC ¶101.) Plaintiff alleges that conduct violates California Business and Professions Code §650 and Insurance Code §§750 and 1871.7(a). (SAC ¶101.)

Plaintiff alleges to carry out this scheme, Perez and New Hope negotiated extremely low rates with the radiologists reading the sham, lay-obtained “MRI studies.” (SAC ¶102.) Plaintiff alleges Perez and New Hope pay about $30-$40 per “MRI study” the teleradiologists read. (SAC ¶102.) Plaintiff alleges these agreements allow New Hope to prepare bills falsely representing that New Hope provided these professional services. (SAC ¶102.) Plaintiff alleges New Hope also negotiated extremely low rates for its accounts receivable, which it sold to certain sham factoring companies in exchange for a steady stream of patient referrals. (SAC ¶102.)

Plaintiff alleges on information and belief that the true cost of each MRI for which New Hope bills is far less than the amount it bills payors—$2,200 per MRI—and falsely represents that amount as the reasonable value of the “imaging services” rendered. (SAC ¶103.) Plaintiff alleges New Hope fraudulently inflates the bills so that Perez/New Hope can profit from the scheme. (SAC ¶103.)

Plaintiff sufficiently alleges a cause of action under CIFPA with the requisite specificity. Plaintiff sufficiently alleges New Hope, as an unlicensed entity, improperly billed for MRI services it could not legally perform. (SAC ¶¶3, 75, 86, 110-119, 125-129.) Plaintiff sufficiently alleges bills misrepresented that the charges were for professional diagnostic imaging services that New Hope was licensed and authorized to provide to patients. (Id.) Plaintiff sufficiently alleges neither Perez nor New Hope was a licensed physician (or any type of licensee), and none of their radiology technicians were supervised or subject to oversight of a licensed physician who owned, controlled, and properly supervised New Hope’s unlicensed MRIs. (SAC ¶¶4, 40, 65, 75-77, 86, 100, 105, 111-112, 115.) Here, as in People ex rel. Allstate Insurance Co. v. Discovery Radiology Physicians, P.C. (2023) 94 Cal.App.5th 521, 539, review denied (Nov. 21, 2023) (“Discovery Radiology”), New Hope hired outside radiologists to “interpret” the lay-rendered scans, and selected radiology equipment to scan patients. (SAC ¶¶ 64-65.)

The Discovery Radiology Court found a valid CIFPA claim where laypersons masquerading as licensees submitted the claims. (Discovery Radiology, 94 Cal.App.5th at pgs. 542-543.) Here, the SAC also alleges that Defendant Perez owns and controls New Hope, including by employing Defendant Turner as a sham “medical director” and independently contracting with other physicians to provide MRI services, and by deciding the amount those physicians were paid, the amount of New Hope’s charges, and the amount of New Hope’s bills that were presented with insurance claims. (SAC ¶¶12, 21, 34-36, 86, 101, 106-119, 135, 140, 144.)

The SAC also alleges that in billing for their unlicensed MRIs, Perez and New Hope permitted others to submit bills for services that New Hope and Perez were not licensed to provide and thus could not lawfully pass of as their own. (SAC ¶¶111-114.) Plaintiff alleges at least 398 fraudulent bills were submitted with a false insurance claim—specifically, a claim for payment under an insurance policy issued by Allstate for MRIs that New Hope and Perez were not licensed to perform. (SAC ¶7, Exh. A.) Under Discovery Radiology, these allegations are sufficient to state an CIFPA claim under §1871.7(b). (Discovery Radiology, 94 Cal.App.5th at pgs. 527, 539.)

Further, the Discovery Radiology Court held that the plaintiff’s complaint adequately alleged an IFPA claim separate from the claim for violating the Medical Practice Act by engaging in or abetting the unlawful practice of medicine. The unlawful corporate practice of medicine (CPOM) was not asserted as a separate cause of action in the complaint, although the complaint did allege a violation of the Medical Practice Act. The court found that the violation was sufficiently alleged and that the same alleged facts about defendants’ unlawful practice of medicine were enough to state a cause of action under the CIFPA. (Id. at pg. 541.)

Defendants’ arguments that the SAC fails to state a §1871.7(b) claim because “there is no private right of action under the CPOM” and because “the Legislature did not provide for a private right of action for a violation of the Medical Practices Act” fail for the same reason they were rejected in Discovery Radiology. Here, Plaintiff does not assert a private cause of action for the unlawful corporate practice of medicine or a violation of the Medical Practice Act, but a CIFPA claim based on the Legislature’s express authorization that insurers can sue in this type of situation. (Ins. Code §1871.7(b).) Here, Plaintiff alleges the same basic facts as in Discovery Radiology—that the unlicensed and unlawful practice of medicine, when done intentionally to defraud insurers, violates CIFPA. (Discovery Radiology, 94 Cal.App.5th at pgs. 545-548.) The alleged violations of section 1871.7(b) are based on unlicensed ownership and undue control of the medical practice and submitting fraudulent bills to insurers for their unlicensed treatment. (SAC ¶¶86, 96-100, 107-135.)

The Court of Appeal also rejected New Hope’s argument that because the unlawful practice of medicine is not one of the “enumerated” prohibited acts in CIFPA that are also incorporated in Penal Code §§549-551, it cannot support a CIFPA claim. (Discovery Radiology, 94 Cal.App.5th at pgs. 542-543.) The Discovery Radiology Court stated, “both Monterey Mushrooms and Suh support the proposition that the unlicensed practice of medicine (or law) can give rise to IFPA claims.” (Id. at pgs. 545-546.)

New Hope’s assertion that “the Legislature did not provide for a private right of action for a violation of the Medical Practices Act” is also unavailing. Plaintiff has not alleged any cause of action for a violation of the Medical Practice Act against Defendants; the violations are alleged to show Defendants’ unlicensed and unlawful practice of medicine. (SAC ¶¶96-100, 120-130.)

The Discovery Radiology Court also rejected the rationale of California Physicians’ Service v. Aoki Diabetes Research Institute (2008) 163 Cal.App.4th 1506, which Defendants rely on to imply that the unlawful practice of medicine cannot support a CIFPA claim because “an insurance company ‘would be unjustly enriched if it were allowed to retain the benefit of services bestowed on its subscribers without compensating [the provider].” (Aoki, 163 Cal.App.4th at pg. 1510.) The court in Discovery Radiology specifically refuted the suggestion that a carrier could be enriched, let alone unjustly, by asserting a CIFPA claim, explaining that the plaintiff did not “seek to ‘avoid paying for’ services rendered under an insurance contract, as defendants suggest; Allstate has already paid for those services, and seeks through this action to recover a statutory penalty that, if recovered, will be shared by the state.” (Discovery Radiology, 94 Cal.App.5th at pg. 548, citing Ins. Code §1871.7(g)(2)(A).) Further, Aoki is inapposite because did not involve a claim under CIFPA, a violation of Penal Code §550, or even any alleged fraud. (Discovery Radiology, 94 Cal.App.5th at pg. 547.)

Accordingly, Defendants New Hope’s demurrer to Plaintiff’s 1st cause of action is overruled.

The UCL prohibits “unlawful, unfair or fraudulent” business acts or practices. (Bus. & Prof. Code §17200 et seq.) By proscribing “any unlawful” business act or practice, the UCL “borrows” rules set out in other laws and makes violations of those rules independently actionable. (Zhang v. Superior Court (2013) 57 Cal.4th 364, 370.) A “violation of another law is a predicate for stating a cause of action under the UCL’s unlawful prong.” (Berryman v. Merit Property Management, Inc. (2007) 152 Cal.App.4th 1544, 1554.) Conversely, “[w]hen a statutory claim fails, a derivative UCL claim also fails.” (Aleksick v. 7-Eleven, Inc. (2012) 205 Cal.App.4th 1176, 1185.)

Plaintiff’s derivative cause of action for UCL sufficiently states a cause of action. (SAC ¶¶136-141; see Discovery Radiology, 94 Cal.App.5th at pg. 541 [“Because the complaints adequately plead violations of the IFPA, they also adequately plead violations of the UCL.”].) Plaintiff also alleges that New Hope’s conduct was “unlawful” because it violated various other statutes besides CIFPA (Ins. Code §1871.7(a)-(b)) and its predicate violations (Penal Code §§549, 550). (SAC ¶¶12, 46-49, 51, 93, 101, 120, 122 [alleging violations of Bus. & Prof. Code §§650, 2040, 2052, and 2273(a); Ins. Code §750; and Health & Safety Code §445.) Plaintiff also alleges that Defendants’ acts and practices were “unfair.” (SAC ¶¶66-72, 107.)

Accordingly, Defendants New Hope’ demurrer is overruled as to the 2nd cause of action.

New Hope’s demurrer to Plaintiff’ SAC is overruled as to the 1st and 2nd causes of action.

C.C.P. §436 provides that the Court may, upon a motion made pursuant to C.C.P. §435, or at any time within its discretion and upon terms it deems proper, “strike out any irrelevant, false, or improper matter inserted in any pleading.” (C.C.P. §436(a).) A motion to strike raises an issue of law, and the grounds for the motion must appear on the face of the challenged pleading or from matters subject to judicial notice. (C.C.P. §437; Grieves v. Superior Court (1984) 157 Cal.App.3d 159.) A motion to strike is not proper to challenge matters which can only be properly decided based on an evidentiary showing. (Mediterranean Exports, Inc. v. Superior Court (1981) 119 Cal.App.3d 605.)

In deciding a motion to strike, the pleadings must be liberally construed, with a view to substantial justice between the parties. (C.C.P. §452.)

New Hope moves for this Court for an Order striking the SAC as untimely filed by Plaintiff and dismissing the SAC in its entirety.

New Hope’s Motion to Strike is based entirely on extrinsic evidence, specifically,“[t]he Register of Actions show[ing] that the SAC was filed on September 18, 2023.” (Decl. of Chorbajian ¶4.) Defendants do not attach a copy of the Register of Actions purportedly reflecting the September 18 filing date to the declaration submitted in support of their motion to strike, and Defendants also do not request judicial notice of the Register of Actions (or any other record of the Court) that supposedly shows the SAC was filed on September 18, 2023. Accordingly, there is no evidentiary basis for this Court to make the necessary factual finding to grant Defendants’ Motion to Strike, and any reference to extrinsic evidence to make such a determination would, in any event, be improper. (See Mediterranean Exports, Inc., 119 Cal.App.3d 605; see also C.C.P. §437(b).)

“[M]ere tardiness” in the filing of a pleading is generally not an appropriate ground for a motion to strike. (A & B Metal Products v. MacArthur Properties, Inc. (1970) 11 Cal.App.3d 642.)

A review of the Court’s docket demonstrates the Court’s Clerk both received and accepted the electronic transmission of the SAC that same day, and the Clerk’s stamp on the SAC itself confirms receipt on September 12 at 2:06 p.m. (See SAC.) Documents received by the Court before midnight on a court day are deemed filed on that court day when accepted for filing. (CRC, Rule 2.253(b)(7); C.C.P. §1010.6). Because the SAC was filed on September 12 at 2:06 p.m. and accepted that same day, New Hope presents no reason for this Court to dismiss Plaintiff’s entire case. Further, dismissal of the case is not in the interests of justice, as this Court seeks to decide the issues of this matter on the merits.

Hon. Daniel M. Crowley

Judge of the Superior Court