Judge Glenda Sanders, Case JCCP5140 2022-08-05 Tentative Ruling

Judge: Glenda Sanders, Case: JCCP5140, Date: 2022-08-05 Tentative Ruling

1. Motion to Seal

2. Motion for Summary Judgment and/or Adjudication

3. Motion for Summary Judgment and/or Adjudication

Motion to Seal

The court will rule upon this motion by minute order.

Motion for Summary Adjudication in Devine Action

The motion of the Baldwin/Bone Parties for summary for summary adjudication as to the Third, Fourth, Fifth, Sixth and Ninth causes of action in the Second Amended Complaint of plaintiff Faith Devine is denied.

Legal Standard:

A defendant moving for summary judgment satisfies his or her initial burden by showing that one or more elements of the cause of action cannot be established or that there is a complete defense to the cause of action. (CCP §437c(p)(2).) The scope of this burden is determined by the allegations of the plaintiff’s complaint. (FPI Development v. Nakashima (1991) 231 Cal.App.3d 367, 381-382 (pleadings serve as the outer measure of materiality in a summary judgment motion)). Once a defendant meets its prima facie showing, the burden shifts to the plaintiff to show by reference to specific facts the existence of a triable issue as to that affirmative defense or cause of action. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.)

In determining a motion for summary judgment, the court is “required to view the evidence and the reasonable inferences therefrom in the light most favorable to the party opposing the summary judgment motion; doubts as to whether there are any triable issues must be resolved in favor of the opposing party; and equally conflicting evidence or inferences require denial of a summary judgment motion.” (Essex Ins. Co. v. Heck (2010) 186 Cal.App.4th 1513, 1522).

Analysis:

The Baldwin/Bone Parties move for summary adjudication of the Third through Sixth and Ninth causes of action in plaintiff Faith Devine’s Second Amended Complaint on the grounds that each of those causes of action is barred by the statute of limitations set forth in Civil Code §3439.09(a), which provides that a claim made under §3439.04(a)(1) must be asserted “not later than four years after the transfer was made or the obligation incurred, or, if later, not later than one year after the transfer or obligation was or reasonably could have been discovered by the claimant.”

The parties appear to agree that section 3439.04(a)(1) is the statute of limitations that applies to all of the causes of action at issue in this motion. They also appear to agree that the action, which was filed on May 18, 2016, was filed more than four years after the transfers at issue in each cause of action were made.

The parties disagree, however, as to whether the action was filed “not later than one year after the transfer or obligation was or reasonably could have been discovered by the claimant.”

Assuming, without finding, that the Baldwin/Bone Parties have met their burden, Plaintiffs raise triable issues of fact as to whether their alleged delayed discovery occurred in June 2015 and was reasonable. “A plaintiff's inability to discover a cause of action may occur ‘when it is particularly difficult for the plaintiff to observe or understand the breach of duty, or when the injury itself (or its cause) is hidden or beyond what the ordinary person could be expected to understand.’” NBCUniversal Media, LLC v. Superior Ct. (2014) 225 Cal.App.4th 1222, 1232.

Here, Devine and Teeple provide testimony to support the statement that “[b]ecause of the incredible complexity of the fraudulent scheme and due in part to Jim Baldwin providing Pasternak with false information, no reasonable investigation would have focused during the period of 2013-2015 on the Challenged Transactions, as those were either unknown transfers or were transfers between entities that appeared, at that time, to have had only a tangential relationship to the debtor entities, and/or which did not appear on their face to be fraudulent.” (AUF E, EE).

The Baldwin/Bone Parties’ argument that mere knowledge of the transactions (as evidenced through recorded grant deeds) is sufficient to begin the running of the statute of limitations is not persuasive. Knowledge that a transaction occurred is not tantamount to knowledge that a potentially voidable transaction occurred.

Plaintiff could not have filed a complaint until she was able to allege all elements of the claim. Plaintiff has submitted sufficient evidence from which a trier of fact could determine that Plaintiff could not reasonably have discovered the allegedly voidable transactions at issue until June 29, 2015 (AUF A-O, R-FF). The trier of fact could reasonably believe that prior efforts were thwarted by incomplete document productions deliberately selected by the Baldwins to obscure the fraudulent nature of the transactions (AUF D), by having to litigate against the Baldwins for nearly two years to obtain certain documents (AUF J), by false statements made by Jim Baldwin regarding the reason for the massive decrease in value in the Otay Ranch project reflected on Forstar’s balance sheets (AUF V), by incomplete documents concerning the Portola Ranch Property (AUF W), and other concerted efforts by the Baldwins to hamper the investigation.

Defendants’ objections 1 through 4 to the Teeple Declaration are overruled.

Defendants’ objections 1 through 6 and 8 through 18 to the Devine Declaration are overruled. The statements by Devine concerning the effect of the E&Y Opinion Letters on her investigation do not divulge attorney-client privileged communications. The court does not rule on objection no. 7 to the Devine Declaration at this time because it is not necessary for the disposition of this motion.

The court grants Defendants’ request for judicial notice of documents 1 through 15.

The court grants Plaintiff’s request for judicial notice of documents 4 through 6.

Motion for Summary Adjudication in HCR Action

The motion of the Baldwin/Bone Parties for summary for summary adjudication as to the First, Second, Third, Fourth, Seventh and Eighth causes of action in the Third Amended Complaint of plaintiff HCR Moorpark Investors, LLC is denied.

Legal Standard:

Analysis:

The Baldwin/Bone Parties move for summary adjudication of the First through Fourth, Seventh and Eighth causes of action in plaintiff HCR’s Third Amended Complaint on the grounds that each of those causes of action is barred by the statute of limitations set forth in Civil Code §3439.09(a), which provides that a claim made under §3439.04(a)(1) must be asserted “not later than four years after the transfer was made or the obligation incurred, or, if later, not later than one year after the transfer or obligation was or reasonably could have been discovered by the claimant.”

The parties appear to agree that section 3439.04(a)(1) is the statute of limitations that applies to all of the causes of action at issue in this motion. They also appear to agree that the action, which was filed on March 16, 2016, was filed more than four years after the transfers at issue in each cause of action were made.

The parties disagree, however, as to whether the action was filed “not later than one year after the transfer or obligation was or reasonably could have been discovered by the claimant.”

Plaintiff could not have filed a complaint until it was able to allege all elements of the claim. Plaintiff has submitted sufficient evidence from which a trier of fact could determine that Plaintiff could not reasonably have discovered the allegedly voidable transactions at issue until June 29, 2015 (AUF A-FF). The trier of fact could reasonably believe that prior efforts were thwarted by incomplete document productions deliberately selected by the Baldwins to obscure the fraudulent nature of the transactions (AUF D), by having to litigate against the Baldwins for nearly two years to obtain certain documents (AUF J), by false statements made by Jim Baldwin regarding the reason for the massive decrease in value in the Otay Ranch project reflected on Forstar’s balance sheets (AUF T), by incomplete documents concerning the Portola Ranch Property (AUF U), and other concerted efforts by the Baldwins to hamper the investigation.

Defendants’ objections 1 through 4 to the Teeple Declaration are overruled.

The court grants Defendants’ request for judicial notice of documents 1 through 15.

The court grants Plaintiff’s request for judicial notice of documents 4 through 6.