Judge Holly J. Fujie, Case 21STCV32886 2022-12-21 Tentative Ruling

MOVING PARTY: Plaintiffs Ollye G. Ingram (“Ingram”), Raymond Jallow (“Jallow”) and Holda M. Novelo (“Novelo”) (collectively, “Moving Plaintiffs”)

RESPONDING PARTIES: Defendants Security National Commercial Capital, Inc. (“SNCC”) and Centaurus Financial Inc. (“Centaurus”)[1]

The Court has considered the moving and opposition papers. No reply papers were filed. Any reply papers were required to have been filed at least five court days before the hearing under California Code of Civil Procedure (“CCP”) section 1005, subdivision (b).

This case arises out of the foreclosure of real property (the “Property”) that was owned by a Delaware Statutory Trust, Spring Gate Plaza (“Spring Gate DST”) in which Plaintiffs were investors. The currently operative second amended complaint (the “SAC”) alleges: (1) breach of fiduciary duty; (2) California financial elder abuse; (3) Illinois financial elder abuse; (4) breach of contract; (5) breach of implied duty of good faith and fair dealing; (6) aiding and abetting breach of fiduciary duty; (7) negligence; (8) violation of Business & Professions Code sections 17200 and 17500; (9) common law fraud; and (10) negligent misrepresentation.

On December 17, 2021, Moving Plaintiffs filed a motion for trial preference (the “Motion”) on behalf of themselves and of the other named Plaintiffs requesting that the Court issue an order of trial preference requiring that the trial in this matter occur within 120 days of the date of this order. Plaintiffs argue that the age and health of Moving Plaintiffs require that the Court issue a trial preference order under California Code of Civil Procedure (“CCP”) section 36, subdivision (a).

A trial preference may be granted based on the health of a party. (Heda v. Superior Court (1990) 225 Cal.App.3d 525.) CCP section 36, subdivision (a) functions to safeguard litigants beyond a specified age against the legislatively acknowledged risk that death or incapacity might deprive them of the opportunity to have their case effectively tried and the opportunity to recover their just measure of damages or appropriate redress. (Kline v. Superior Court (1991) 227 Cal.App.3d 512, 515.) The provision was enacted for the purpose of assuring that an aged or terminally ill plaintiff would be able to participate in the trial or his or her case and be able to realize redress upon the claim asserted. (Looney v. Superior Court (1993) 16 Cal.App.4th 521, 532.) The provision safeguards a legislatively acknowledged substantive right of older litigants to trial and to obtain a full measure of damages during the litigant’s lifetime. (Vinokur v. Superior Court (1988) 198 Cal.App.3d 500, 502.)

Under CCP section 36, subdivisions (a)(1) and (a)(2), a party to a civil action who is over 70 years of age may petition the court for a preference, which the court shall grant upon making both of the following findings: (1) the party has a substantial interest in the action as a whole; and (2) the health of the party is such that a preference is necessary to prevent prejudicing the party’s interest in the litigation. Where a motion for trial preference is made pursuant to CCP section 36, subdivision (a), the attorney for the party seeking preference may submit an affidavit in support of the motion based on information and belief as to the medical diagnosis and prognosis of any party. (CCP § 36.5.)

Moving Plaintiffs are each over 70 years old: (1) Ingram is 95 years old (Declaration of Ollye G. Ingram (“Ingram Decl.”) ¶ 2); (2) Jallow is 92 years old (Declaration of Raymond Jallow (“Jallow Decl.”) ¶ 2); and (3) Novelo is 70 years old (Declaration of Holda M. Novelo (“Novelo Decl.”) ¶ 2).

Ingram has severe rheumatoid arthritis that limits his mobility, and he can only walk for limited periods with a walker. (Ingram Decl. ¶¶ 2-3.) About two years ago, Ingram fell and cracked his hip. (Ingram Decl. ¶ 4.) The injury from the fall required hospitalization and it took Ingram nearly a year to recover. (Id.) Because of his age and medical history, Ingram is at an increased risk for another fall. (Ingram Decl. ¶ 5.)

Jallow suffers from health issues that arise from heart disease. (Jallow Decl. ¶ 2.) Jallow’s health issues drain his energy. (Id.) On August 8, 2021, Jallow underwent surgery to enlarge his coronary arteries; the operation required around two months of hospitalization and rehabilitation. (Id.) Since the surgery, Jallow requires 24-hour care and needs assistance with daily tasks. (Jallow Decl. ¶ 3.) Jallow’s mobility is limited, and he can only walk short distances with the assistance of a cane. (Id.) Because of his age and medical history, Jallow is at an increased risk of hospitalization due to heart disease or a fall. (Jallow Decl. ¶ 5.)

Novelo has had two hip surgeries, one in 2016 and one in 2018. (Novelo Decl. ¶ 2.) In February 2020, Novelo underwent a neck fusion to reduce pain, the recovery time for which was about four months. (Novelo Decl. ¶ 3.) As she grows older, the likelihood that Novelo may have to undergo additional procedures which would limit her ability to participate in this action will increase. (Novelo ¶ 4.)

Moving Plaintiffs all declare that hospital visits are particularly risky for them because of the possibility of increased exposure to the COVID-19 virus and their heightened susceptibility to severe complications or death if they were to contract the virus due to their medical histories. (See Ingram Decl. ¶ 6; Jallow Decl. ¶ 6; Novelo Decl. ¶ 5.)

In the Oppositions, SNCC and Centaurus both argue that Moving Plaintiffs have not demonstrated that they have a substantial interest in the action as a whole.[2] Centaurus notes that there is not a developed body of caselaw defining what constitutes a “substantial interest” in a lawsuit and argues that this case presents a situation where there are many claims and many parties where the individuals seeking a trial preference do not have a significant interest in the overall litigation based on the proportion of their ownership interests in Spring Gate DST. The SAC alleges that: Ingram invested $210,000 and owned a 3.39 interest in Spring Gate DST (SAC ¶ 26); (2) Novelo invested $28,000 and owned a 0.45 percent interest in Spring Gate DST (SAC ¶ 26); and (3) Jallow invested $836,000 and owned a 13.83 percent interest in Spring Gate DST (SAC ¶ 35), making their collective interest in Spring Gate DST 17.67 percent. Centaurus additionally argues that Moving Plaintiffs should be required to submit further evidence that a trial preference is necessary, such as medical records.[3]

The Court notes that Moving Plaintiffs are not required to provide medical records because the Motion seeks a trial preference pursuant to CCP section 36, subdivision (a), which does not require medical records or clear and convincing evidence. (See CCP § 36.5; Fox v. Superior Court (2018) 21 Cal.App.5th 529, 533-34.) Nonetheless, the Court finds that the Motion and the supporting declarations fail to establish that Moving Plaintiffs’ health is such that not granting trial preference would prejudice their interests in the litigation. The evidence submitted in support of the Motion is insufficiently specific to establish the necessity for a trial preference. Moving Plaintiffs’ respective declarations indicate that they have significant health conditions, that they are at risk of suffering complications should they contract COVID-19 if they are hospitalized, and Ingram and Jallow have limited mobility such that they may be prone to falls that may require hospitalization. In addition, Jallow experiences low energy resulting from heart disease and requires 24-hour care. While Moving Plaintiffs’ declarations establish that they have ongoing health issues, they fail to establish that advancing the trial is necessary to prevent prejudicing their interests in the litigation.[4]

In consideration of the current COVID-19 pandemic situation, the Court¿strongly¿encourages that appearances on all proceedings, including this one, be made by LACourtConnect if the parties do not submit on the tentative.¿¿If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to¿SMC_DEPT56@lacourt.org¿stating your intention to appear in person.¿ The Court will then inform you by close of business that day of the time your hearing will be held. The time set for the hearing may be at any time during that scheduled hearing day, or it may be necessary to schedule the hearing for another date if the Court is unable to accommodate all personal appearances set on that date.¿ This rule is necessary to ensure that adequate precautions can be taken for proper social distancing.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

[1] SNCC and Centaurus filed separate oppositions (the “SNCC Opposition” and the “Centaurus Opposition,” respectively). SNCC was dismissed from this action on June 23, 2022.

[2] Several of the arguments raised in the SNCC Opposition are moot or partially moot following the Court’s ruling on various Defendants’ demurrers to the first amended complaint (the “FAC”) on February 7, 2022 and former Defendant American National Insurance Company, Inc.’s motion to quash and motion to dismiss on March 3, 2022.

[3] Alternatively, Centaurus argues that severing Moving Plaintiffs’ causes of action is the appropriate course of action should the Court grant the Motion because of the number of parties and claims in the lawsuit and the minimal discovery that has thus far been conducted.

[4] The Court also notes that the Motion and supporting declarations do not explicitly set forth facts providing that Moving Plaintiffs have a substantial interest in the action as a whole.