Judge: David A. Rosen, Case: BC654195, Date: 2023-05-19 Tentative Ruling
Case Number: BC654195 Hearing Date: May 19, 2023 Dept: E
Hearing Date: 05/19/2023 – 8:30am
Case No. BC654195
Trial Date: 06/20/2023
Case Name: DONARA GRIGORYAN v. ENTERPRISE RENT-A-CAR COMPANYOF LA et al.
TENTATIVE
RULING ON MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT-IN-INTERVENTION and
ANSWER-IN-INTERVENTION
Moving Party: Intervenor, Empire
Fire and Marine Insurance Company (Intervenor or Empire)
Responding Party: No Opposition submitted.
16/21 Day Lapse (CCP §12c and §1005(b)): Yes and No –
The proof of
service indicates two manners of service on two different parties. As to
service on the Plaintiff, the proof of service indicates personal service on
April 27, 2023. April 27, 2023 would be 16 court days before the instant
hearing, and since it was served by personal service, it would be deemed served
that day. Therefore, service on the Plaintiff appears to be timely.
However, as to
service of this motion on the Estate of Murataliev, this motion is not timely.
The proof of service indicates that the Estate was served by overnight courier.
Under CCP §1005(b), the required 16-day period of notice before the hearing
shall be increased by two calendar days for a method of delivery providing for
overnight delivery. April 27, 2023 would have been the 16th court day, and when
adding two calendar days, this motion should have been served on the Estate on
April 25, 2023. Therefore, as to the Estate, this motion is not timely.
Another aspect
that is confusing to the Court is as such: Under the section of the Proof of
Service titled “See Attached Service List,” the Intervenor states overnight courier
was used for the Estate Only, and Personal Service was for the Plaintiff Only.
However, under the section of the Proof of Service titled “Service List,” Third-Party
Manvel Israelyan is also listed. However, there is no indication in the “See
Attached Service List” as to the manner in which Manvel Israelyan was served.
Proof of Service Timely Filed (CRC, Rule 3.1300): Ok
Correct Address (CCP §1013, §1013a, §1013b): Unsure.
As to service on
the Plaintiff, the service via personal service/messenger lists the same
mailing address that the Court has on its file.
As to the service
on the Estate, there are several aspects that are unclear. First, under the
“See Attached Service List” section, Overnight Courier is marked for “Estate
Only.” However, under this same section, “By Electronic Mail,” is also marked.
Confusingly, the Proof of service does not indicate who was served by
electronic mail in the “See Attached Service List,” section.
Additionally,
under the “Service List” section of the proof of service, the Estate is
indicated to have been served “Via Electronic Service.” However, since the
Estate was previously indicated to have been served via Overnight Courier, it
is unclear if the Estate was served by Overnight Courier or via electronic
mail, or both.
Further, if the
Estate was served by Overnight Courier, the mailing address for the Estate is
the same mailing address that the Court has on its file. However, if the motion
was served on the Estate by electronic mail, the Court is unclear as to why the
Intervenor served the email addresses that it served, as the Court does not
have those email addresses on file for the Estate.
Lastly, as
service is also indicated for Third-Party Manvel Israelyan, the Court is
uncertain as to what the proper address is for service, and the Court is
uncertain as to the manner in which Manvel was served.
Moving Papers: Notice of
Motion/Motion; Proof of Service; Linhardt Declaration; Proposed Order
Opposition Papers: No Oppo
No Reply submitted.
RELIEF REQUESTED
Intervenor, Empire Fire and Marine Insurance Company, moves pursuant to CCP
§472, 473(a)(2), and 576 for leave to amend its Complaint-in-Intervention,
originally filed on January 25, 2022, to include additional claims, defenses,
and allegations.
[The Court notes that in the first
two paragraphs of the Notice page, the Intervenor does not mention that it is
moving to file an amended Answer-in-Intervention. The third paragraph of the
notice page also doesn’t mention that Intervenor is moving to file an amended
Answer-in-Intervention, but the third paragraph references an
Answer-in-Intervention. [See lines 20-21 of ¶3 on page 1 of the notice page.
The only portion of the notice pages that indicate Intervenor is moving for
leave to file an amended Answer-in-Intervention is the caption of the notice
page. The reference to an “amended
Answer in intervention” is baffling.
As to the instant motion, Empire alleges
that these amendments will add factual allegations that Plaintiff Donara
Grigoryan (“Plaintiff”) and her co-conspirators orchestrated the accident
underlying this action for the purpose of defrauding Empire, as well as new
affirmative defenses, including lack of personal jurisdiction, unclean hands,
and insurance fraud, relating to the previously pled fraud scheme.
Additionally,
Empire alleges that the First Amended Complaint-in-Intervention and
Answer-in-Intervention accomplishes the following: (a) it includes threshold
jurisdictional defenses relating to Plaintiff’s failure to timely serve the
insured defendants and failure to obtain personal jurisdiction over any Empire
insured; (b) it includes new factual allegations and details regarding Plaintiff’s
scheme to defraud Empire; (c) it adds new allegations about Plaintiff’s
co-conspirators, including Karine Mkrtchyan (the driver of the car in which
Plaintiff was riding and the plaintiff in a related case), her husband Manuk
Aboyan (the owner of the car carrying Plaintiff), Izat Murataliev, and Harutyan
Ajaryan (the renter of the other (rental) car that was involved in the crash);
and (d) it includes several new affirmative defenses that have not been
asserted by any party and revolve around the fraudulent scheme at the center of
this case (e.g., unclean hands, insurance fraud, fraudulent claims, breach of
contract, and related defenses).
LEGAL STANDARD – LEAVE TO
AMEND
The
court may, in furtherance of justice and on any proper terms, allow a party to
amend any pleading. (Code Civ. Proc., § 473, subd. (a)(1); Branick v.
Downey Savings & Loan Association (2006) 39 Cal.4th 235,
242.) The court may also, in its discretion and after notice to the
adverse party, allow, upon any terms as may be just, an amendment to any
pleading or proceeding in other particulars; and may upon like terms allow an
answer to be made after the time limited by this code. (Code Civ. Proc., §
473, subd. (a); Branick, supra, 39 Cal.4th at
242.) Judicial policy favors resolution of all disputed matters between
the parties and, therefore, the courts have held that “there is a strong policy
in favor of liberal allowance of amendments.” (Mesler v. Bragg
Management Co. (1985) 39 Cal.3d 290, 296-97; see also Ventura v.
ABM Industries, Inc. (2013) 212 Cal.App.4th 258, 268) [“Trial courts
are bound to apply a policy of great liberality in permitting amendments to the
complaint at any stage of the proceedings, up to and including trial where the
adverse party will not be prejudiced.”].) Leave to amend
is thus liberally granted, provided there is no statute of
limitations concern. (Kolani v. Gluska (1998)
64 Cal.App.4th 402, 411.) The court may deny the plaintiff’s leave
to amend if there is prejudice to the opposing party, such as delay in trial,
loss of critical evidence, or added costs of
preparation. (Id.)
Under California Rules of Court, rule 3.1324, a motion
to amend a pleading before trial must (1) include a copy of the proposed
amendment or amended pleading, which must be serially numbered to differentiate
it from previous pleadings or amendments; (2) state what allegations in the
previous pleading are proposed to be deleted, if any, and where, by page,
paragraph and line number, the deleted allegations are located; and (3) state
what allegations are proposed to be added to the previous pleading, if any, and
where, by page, paragraph, and line number, the additional allegations are
located. (Cal. Rules of Court, rule 3.1324(a).)
Further, a separate supporting declaration must
accompany the motion and must specify (1) the effect of the amendment; (2) why
the amendment is necessary and proper; (3) when the facts giving rise to the
amended allegations were discovered; and (4) the reason why the request for
amendment was not made earlier must accompany the motion. (Id., rule
3.1324(b).)
“Leave to amend is in general required to be liberally
granted [citation omitted], provided there is no statute of limitations
concern. Leave to amend may be denied if there is prejudice to the opposing
party, such as delay in trial, loss of critical evidence, or added costs of
preparation. [citation omitted].” (Kolani v. Gluska (1998) 64
Cal.App.4th 402, 411.)
Additionally, under Title 7a, “Pretrial Conferences”
of the Code of Civil Procedure, CCP §576 states, “Any judge, at any time before
or after commencement of trial, in the furtherance of justice, and upon such
terms as may be proper, may allow the amendment of any pleading or pretrial
conference order.” (CCP §576.)
ANALYSIS
CRC 3.1324(a)
Under California Rules of Court, rule 3.1324(a), a
motion to amend a pleading before trial must:
(1) include
a copy of the proposed amendment or amended pleading, which must be serially
numbered to differentiate it from previous pleadings or amendments;
Here, Intervenor attached the Declaration
of Alex Linhardt. Exhibit A is a copy of Empire’s proposed Amended
Complaint-in-Intervention and Answer-in-Intervention. However, the Court notes
there is ambiguity as to the serial numbering for the proposed amendment(s).
In particular, the Court notes that it is
unclear if this is a First Amended Complaint-in-Intervention and a First
Amended Answer-in-Intervention, or, if this is a First Amended
Complaint-in-Intervention and an original Answer-in-Intervention. At the very
least, it seems clear that this is a First Amended Complaint-In-Intervention,
but it is unclear if this is a First Amended Answer-in-Intervention or an
original Answer-in-Intervention.
This confusion is based on the following: The
caption of Exhibit A in the Linhardt Declaration is titled, “EMPIRE FIRE AND
MARINE INSURANCE COMPANY’S FIRST AMENDED COMPLAINT-IN-INTERVENTION AND
ANSWER-IN-INTERVENTION.” It is thus unclear if the phrase “first amended”
applies just to the complaint or if “first amended” applies to both the
complaint and answer.
Additionally, on page 2 of Exhibit A,
there is a section titled, “First Amended Complaint-In-Intervention,” and on
page 13 of Exhibit A, there is a section titled, “Answer-In-Intervention.” The
fact that Intervenor only included the qualifier of “First Amended” on page 2
and did not include it on page 13 with respect to the Answer seems to indicate
that Intervenor may be saying the Answer is not a “First Amended”
Answer-in-Intervention. Further, the Court does not see an original Answer on
file for the Intervenor.
(2) state
what allegations in the previous pleading are proposed to be deleted, if any,
and where, by page, paragraph and line number, the deleted allegations are
located; and
Here, this motion does
not appear to be proposing to delete allegations in a prior pleading.
(3) state
what allegations are proposed to be added to the previous pleading, if any, and
where, by page, paragraph, and line number, the
additional allegations are located. (Cal. Rules of Court, rule
3.1324(a).)
Here, Intervenor notes it seeks to add facts that it claims
to have uncovered since intervening and to assert several new affirmative
defenses to provide a more complete and accurate summary of the evidence that
it plans to offer at trial. In particular, Intervenor states throughout its
motion:
“The facts it
proposes adding include the death of one of the named defendants (Murataliev),
the fact that service was not properly achieved as to Murataliev and his
Estate, the co-schemers’ history of felony convictions (Ajaryan and Aboyan) and
suspicious insurance claims, and other facts supporting Empire’s theory that
the “accident” in this case masks a scheme to defraud Empire by a set of
professional fraudsters.” (Mot. p.8.)
“The affirmative
defenses fall into three general categories: jurisdictional, fraud-based, and
contractual. (Id., ¶ 63.) Among other things, Empire proposes adding, inter
alia, under the category of “jurisdictional,” lack of personal jurisdiction and
untimely and improper service; under the category of “fraud,” unclean hands,
knowledge of the risk, insurance fraud, fraud and/or willful injury, false and
fraudulent claims, superseding and intervening acts, estoppel, and laches; and
under the category of “contract,” breach of the affirmative covenants of the
rental agreement and breach of the terms and conditions of the insurance policy
and operation of exclusions.” (Mot. p. 8-9.)
“Indeed, by adding
further details about Empire’s fraud scheme allegations, Empire is providing
additional notice regarding the proof it intends to offer at trial, which
should be to Plaintiff’s advantage and will likewise allow the Court to
estimate more exactly the scope and duration of any future trial and evaluate
any future motions in limine.” (Mot. p.10.)
“In addition to
new facts about the fraud scheme, Empire also determined definitively—by
procuring a copy of his autopsy and death certificate—that its insured,
Murataliev, died in July 2019. (Linhardt Decl., ¶ 11.) Murataliev was the only
Empire insured named in Plaintiff’s original complaint. (Id.) While Empire was
aware that Murataliev was dead when it intervened, it was not aware that
Plaintiff had not yet dismissed, and would not dismiss, her claims against
Murataliev. (Id., ¶ 68.) It had also not investigated the circumstances
surrounding service on the Estate. (Id.) Permitting Empire to amend its
Complaint-inIntervention to add facts concerning Murataliev’s death is hardly
controversial and will not work an unfair prejudice for any party, as this
Court has already issued an order dismissing him from this case. Likewise, its addition of
facts concerning lack of personal jurisdiction as to Murataliev and the Estate
is similarly appropriate and justified to support the affirmative defenses of
lack of personal jurisdiction and for the reasons set forth in the separate
Motion to Strike and Motion to Dismiss, both of which are pending before this
Court.” (Mot. p.11.)
“Empire seeks to
add three types of affirmative defenses: jurisdictional, fraud-based, and
contractual. As previously
briefed in this case, jurisdictional defects can be raised at any time.
Following Murataliev’s death, to preserve any claims against his assets
(including insurance), Plaintiff was required to serve Murataliev timely and
properly and (after his death) either to continue the action against
Murataliev’s personal representative or successor-in-interest under Code of
Civil Procedure Sections 377.40 and 377.41, or to continue the action pursuant
to Probate Code Section 550, which limits recovery to available insurance
proceeds. However, Plaintiff failed timely to do these things, which provide
further bases for defending this action.8 Her compounded failure to serve Murataliev before
his death and to act timely to continue this action after his death, means that
this Court lacks personal jurisdiction over any Empire insured.” (Mot. p. 11.)
[Footnote 8 of Intervenor’s motion states, “The record is devoid of any proof
that Plaintiff’s November 2021 attempts to amend her complaint satisfied the
requirements of Probate Code Sections 550 and 552 and Code of Civil Procedure
Section 472; therefore, the operative pleading continues to be Plaintiff’s
complaint in the form it was originally filed on March 15, 2017.”]
“Empire previously
adopted the Estate’s statute of limitations defense, and now wishes to amend
its Complaint-in-Intervention to allege new affirmative defenses including lack
of personal jurisdiction and failure to serve timely, so that it may introduce evidence of those defenses at
trial. (Id., ¶ 19.)
By adding lack of personal jurisdiction and other jurisdictional defenses to
the Complaint-in-Intervention, Empire merely formally asserts within the four
corners of its complaint the very same legal claims that it has raised via its
Motion to Strike and Motion to Dismiss, which are presently pending before this
Court.” (Mot. p. 11-12.)
“Empire,
therefore, wishes to amend its Complaint-in-Intervention to assert and/or
clarify its position that (a) the statute of limitations on all insured claims
ran well before November 2021, and (b) there is no evidence in the record that
Plaintiff satisfied the requirements of Probate Code Sections 550 and 552.
Although Empire’s position remains that the Plaintiff’s original complaint was
not properly and timely amended or thereafter served—and thus no answer to such
pleading is required—Empire wishes to amend its Complaint-in-Intervention to
make sure that the facts regarding the passage of time, the consequent statute
of limitations bar, and the lack of proper and timely service are asserted and
preserved before and during trial.” (Mot. p. 12.)
“…Empire wishes to
also add affirmative defenses and supporting facts relating to the over-all
fraud scheme it alleges that Plaintiff perpetrated with her coschemers (e.g.,
unclean hands and related defenses). Chief among the additions to the factual
allegations are facts concerning Harutyan Ajaryan (the renter of the car
Murataliev was driving and who purchased the highest-limit Empire insurance
product); Manuk Aboyan, the owner of the car Murataliev allegedly hit, who was
convicted of fraud in 2021; and Aboyan’s wife Karine Mkrtchyan, driver of the
BMW, another Empire claimant, and an initial lawsuit plaintiff. As to
Mkrtchyan, Empire wishes to add allegations that she applied for millions of
dollars’ worth of life insurance and submitted to medical examinations to prove
her good health at the same time that she was maintaining in a related action
to this case that she was severely injured from the July 2015 collision.
Indeed, after she successfully obtained around $16 million in life insurance
policies, Mkrtchyan left the country and purportedly “died” in Ukraine in April
2018. (Id., ¶ 51.) Notably, despite being “dead,” she continued to maintain her
personal injury case stemming from the July 2015 collision before this Court
until late 2018 when she voluntarily dismissed it (presumably because her
husband Aboyan had initiated claims to recover the $16 million in life
insurance proceeds). (Id.) Obviously, she cannot have been both alive and dead
at the same time.” (Mot. p. 13.)
“The third
category of facts concern the rental and insurance contracts, and specifically
the failure of the insureds to abide by their terms, disclose material facts at
the time of the rental (which voids coverage), and/or the triggering of
exceptions to coverage. Although discovery is not yet complete, it is apparent
from materials obtained earlier this year through a subpoena to B&D Law
Group and other sources, that the renter of the car (Ajaryan) and the driver of
the car (Murataliev) were not honest at the time of the rental and that
thereafter Murataliev operated the rental vehicle inconsistently with the
obligations of those agreements and/or in a way that fell within the operative
exceptions to coverage. Because these facts were not known to Empire prior to
entering this lawsuit and because allowing them to be pled and the related
affirmative defenses to be pled will not unfairly prejudice any party, they
should be allowed.” (Mot. p. 13-14.)
Here, the motion itself does not allege where,
by page, paragraph, and line number, the additional allegations are located.
The motion notes, generally speaking, what it seeks to add. However, ¶70 of the
Linhardt Declaration states, “Pursuant to CRC 3.1324, attached hereto as
Exhibit B is a redline comparison of the proposed Amended Complaint-in-Intervention
stating what allegations are to proposed to be added or deleted from the
operative pleading by page, paragraph, and line number. These proposed
additions are identified in red, while the proposed deletions are in
strikethrough.” (Ibid.)
Intervenor doesn’t strictly comply with CRC 3.1324(a)(3)
in the sense that it didn’t indicate page, paragraph, and line number of the
additions in the motion itself. However, it may have been impractical to do so.
Exhibit B is a bizarre version of a redline. It looks like an image of a
redline. Intervenor didn’t explicitly state that it chose not to allege the additions
by page, paragraph, etc., because it was impractical. CRC 3.1324(c) may apply to the instant
scenario, as it states, “The court may deem a motion to file an amendment to a
pleading to be a motion to file an amended pleading and require the filing of
the entire previous pleading with the approved amendments incorporated into it.”
The Court also notes
that ¶70 of the Linhardt Declaration mentions proposed deletions being in
strikethrough. But as indicated in the prior section regarding 3.1324(a)(2) of
this tentative, Intervenor did not state that it sought deletions. It is not
clear in the moving papers what, if anything, Intervenor seeks to delete from
the Complaint-in-Intervention. The first time deletions are referenced is ¶70
of the Linhardt Declaration. This motion doesn’t indicate proposed additions
with respect to what is separately being added to the complaint-in-intervention
and what is separately being added to the answer-in-intervention. This motion appears
to assume that everything is being added to one document – the combined complaint/answer.
CRC 3.1324(b)
Further, under CRC 3.1324(b), a separate declaration
must accompany the motion and must specify:
(1) the
effect of the amendment;
Intervenor attached the declaration of Alex Linhardt.
Intervenor doesn’t explicitly state, “the effect of the amendment is…;” however,
what appears to be the affect of the amendment is:
Empire’s amendment
will add factual allegations related to the facts alleged in the
Complaint-in-Intervention—that Plaintiff and her co-conspirators engaged in a
scheme to defraud Empire. (Decl. Linhardt ¶60.)
In addition to
factual allegations in support of its claims, Empire seeks to add affirmative
defenses, including lack of personal jurisdiction and failure to serve timely,
so that it may introduce evidence of those defenses at trial. (Linhardt
Declaration ¶62.)
¶61-67 of the Linhardt Declaration also go to
the effect of the amendment.
(2) why
the amendment is necessary and proper;
The Linhardt Declaration states:
“The proposed
amendment is necessary and proper because: (i) it is based on further
discoveries of Plaintiff’s fraud; (ii) there is no unfair prejudice to
Plaintiff; and (iii) the discovery and investigation detailing the nature and
extent of the fraud supporting the amendment only recently became known to
Empire after the filing of the Complaint-in-Intervention. Moreover, Empire
contends that amendment is necessary to promote judicial economy. By adding
further details about Empire’s fraud allegations, Empire is providing
additional notice regarding the proof it intends to offer at trial, which
should be to Plaintiff’s advantage and will likewise allow the Court to
estimate more exactly the scope and duration of any future trial and evaluate
any future motions in limine.” (Decl. Linhardt ¶69.)
(3) when
the facts giving rise to the amended allegations were discovered;
This requirement appears
to have been met and encompassed in the 4th requirement below.
(4) the
reason why the request for amendment was not made earlier must accompany the
motion. (Id., rule 3.1324(b).)
Intervenor states
as follows in ¶68 of the Linhardt Declaration:
“This
amendment could not have been made earlier. Although Empire was aware that it
was the victim of a scheme to defraud, the parameters of that fraud had not
been fully investigated when it intervened in the case in January 2022. The
additional evidence of fraud was uncovered through extensive investigation,
including through third-party subpoenas, many of which were objected to and/or
that required motions to compel that took months to brief and resolve. For
example, evidence of lack of personal jurisdiction was not discovered until
Empire intervened in this case and began actively investigating whether its
insureds were properly served. Further, facts concerning the collusion between
Plaintiff and her co-conspirators, and the fraud scheme developed by Plaintiff
with co-schemers Murataliev and Mkrtchyan were not made available to Empire
until it received records in response to the life insurance subpoenas on
February 27, 2023 (United), February 28, 2023 (Brighthouse), March 3, 2023
(Nationwide), and March 28, 2023 (Accordia).” (Linhardt Decl. ¶68.)
TENTATIVE
RULING
The Court will hear argument on Intervenor’s
motion for leave to file a “First
Amended Complaint-In-Intervention and Answer-In-Intervention,” especially with
respect to the following issues:
1. Effect of waiver of the service
defense;
2. Failure to follow procedural
requirements?
3. Ambiguity as to amended complaint-in-intervention
and an original answer-in-intervention;
4. The proposed pleading is one document;
5. Service issue; late as to the Estate
but not as to Plaintiff?