Judge: Joseph Lipner, Case: 22STCV12323, Date: 2024-08-15 Tentative Ruling
Case Number: 22STCV12323 Hearing Date: August 15, 2024 Dept: 72
SUPERIOR COURT OF CALIFORNIA
COUNTY OF LOS ANGELES
DEPARTMENT 72
TENTATIVE
RULING
|
ALLA KUTZ, et al.,
Plaintiffs, v. MIKHAIL SIRETSKIY, et al., Defendants. |
Case No:
22STCV12323 Hearing Date: August 15, 2024 Calendar Number: 3 |
Defendant Aykem, LLC (“Aykem”) moves for reconsideration of
the Court’s May 29, 2024 order (the “May 29 Order”) granting the motion for
leave to amend the complaint filed by Plaintiffs Alla Kutz and Igor Kutz (collectively,
“Plaintiffs”) to add Aykem as a defendant and denying as moot Aykem’s motion to
intervene.
The Court DENIES Aykem’s motion in its entirety.
This case involves a contract for partial sale of the real
property located at 5325 Cangas Drive, Calabasas, California 91301, APN:
2052-036-005 (the “Property”).
Plaintiffs allege that Defendant Mikhail Siretskiy
(“Siretskiy”) promised to sell 36 percent of the Property to Plaintiffs but
failed to timely close escrow. Plaintiffs allege that Siretskiy engaged in
fraud during the transaction and are seeking to rescind the contract and obtain
money damages as a result.
On May 26, 2021, Defendant Cangas RE LLC (“Cangas”) borrowed
money from Aykem to fund construction on the Property. As security, Cangas
provided Aykem with a deed of trust and assignment of rents against the
Property (the “Deed of Trust”).
Plaintiffs filed this case on April 12, 2022, raising claims
for (1) breach of contract; (2) breach of fiduciary duty; (3) negligence; (4)
fraud; (5) constructive fraud; and (6) rescission.
On April 27, 2022, Plaintiff recorded a lis pendens against
the Property in the Los Angeles County Recorder’s Office. Aykem contends that Plaintiff
did not serve the lis pendens on Aykem.
On September 27, 2022, Aykem purchased the Property at a
foreclosure auction. On October 17, 2022, the Trustee’s Deed upon Sale was
recorded with the Los Angeles County Recorder’s Office.
In October 2023, Aykem was in the process of selling the
Property.
On November 7, 2023, Aykem brought an ex parte application
to intervene in this matter and expunge the lis pendens. The Court denied the
ex parte application.
On April 24, 2024, Aykem filed a motion for leave to
intervene. Plaintiff opposed the motion.
On May 6, 2024, Plaintiffs moved for leave to amend the
Complaint to add Aykem as a defendant under Code of Civil Procedure, section
473 and to add a seventh cause of action for fraudulent transfer. Aykem opposed
the motion.
On May 29, 2024, the Court held a hearing on both motions.
Around 7:50 a.m., Aykem signed on to the Los Angeles Court Connect desktop
application. The upcoming hearing on the motions was listed with the status of
“Not In Session.” Aykem waited until 8:37 a.m., but the status of the hearing
did not change. Aykem did not appear at the hearing. The Court granted
Plaintiffs’ motion for leave to amend and denied Aykem’s motion to intervene as
moot.
The Court grants the parties’ requests for judicial notice
and takes notice of the requested materials as public records.
Within ten days of service of an order, a party may move for
reconsideration based on new facts, circumstances, or law. (Code Civ. Proc., §
1008, subd. (a); see also Mink v. Superior Court (1992) 2 Cal.App.4th
1338, 1342.) The moving party shall state by affidavit what application was
made before, what order or decisions were made, and what new or different facts
or circumstances are claimed to be shown. (Code Civ. Proc., § 1008, subd .(a).)
“[T]he party seeking reconsideration must provide not only new evidence but
also a satisfactory explanation for the failure to produce that evidence at an
earlier time.” (Glade v. Glade (1995) 38 Cal.App.4th 1441, 1457.) The
legislative intent was to restrict motions for reconsideration to circumstances
where a party offers the court some fact or circumstance not previously
considered and some valid reason for not offering it earlier. (Gilberd v. AC
Transit (1995) 32 Cal.App.4th 1494, 1500.)
“If those requirements have been met to the satisfaction of
the court but the court is not persuaded the earlier ruling was erroneous, the
proper course is to grant reconsideration and to reaffirm the earlier ruling.”
(Corns v. Miller (1986) 181 Cal.App.3d 195, 202.)
“If a court at any time determines that there has been a
change of law that warrants it to reconsider a prior order it entered, it may
do so on its own motion and enter a different order.” (Code Civ. Proc., §
1008, subd. (c).)
Bracketing the issue of whether new facts, circumstances,
or law exist, the Court denies the motion to vacate the order granting leave to
amend because it is not convinced that the May 29 Order is incorrect.
“The
court may, in furtherance of justice, and on any terms as may be proper, allow
a party to amend any pleading or proceeding by adding or striking out the name
of any party[.]” (Code Civ. Proc., § 473, subd. (a)(1).) “[O]ne not named as a
party in the original complaint may be made a party to the action by amendment
of the complaint pursuant to Code of Civil Procedure section 473.” (Fifth
& Broadway Partnership v. Kimny, Inc. (1980) 102 Cal.App.3d 195, 199 (Fifth
& Broadway).) The policy of liberality in amendments “applies to
amendments changing parties, adding new parties, and correcting erroneous
names.” (Jo Redland Trust, U.A.D. 4-6-05 v. CIT Bank, N.A. (2023) 92
Cal.App.5th 142, 161, 162 [reversing denial of leave to amend and relying on
Code of Civil Procedure, § 473, subd. (a)(1) to do so].)
As
noted above, Fifth & Broadway, supra, explicitly held decades
ago that a new party may be added by amending the complaint pursuant to Civil
Procedure Code section 473. Similarly, Nissan v. Barton (1970) 4
Cal.App.3d 76 (Nissan) held even earlier as follows: “If not
named as a party in the original complaint . . . any proper person may be
brought in by amendment of the complaint (§473) or may be designated by a
fictitious name upon proper allegation in the complaint to that effect. (§474.)” Aykem nevertheless argues that section 474,
which governs amendments to replace a fictitious name with a defendant’s true
name, is the only mechanism by which to amend a complaint to add a party and
that Plaintiffs therefore could not obtain leave to amend under section 473. Aykem
argues that “[c]ases interpreting this section clearly hold that section 473
does not authorize the addition of a party for the first time whom the
plaintiff failed to name in the first instance.” (Kerr-Mcgee Chemical Corp.
v. Superior Court (1984) 160 Cal.App.3d 594, 598–599.)
The
Court entertains significant doubt as to whether Kerr-Mcgee broadly held
that parties may not use section 473 to add parties, as Aykem argues. But even assuming that Aykem correctly
interprets Kerr-Mcgee, Aykem has at most identified a split within the
Court of Appeal. If such a split exists, the Court will follow the
interpretation of section 473 laid out in Fifth & Broadway and Nissan. The Court determines that the ruling in these
cases is the correct one. The plain text of section 473, allowing amendment “by
adding […] the name of a party,” permits amendment to add a party. (Code Civ.
Proc., § 473, subd. (a)(1).)
“The court may, upon any terms as may be just, relieve a
party or his or her legal representative from a judgment, dismissal, order, or
other proceeding taken against him or her through his or her mistake, inadvertence,
surprise, or excusable neglect.” (Code Civ. Proc., § 473, subd. (b).)
The Court declines to exercise its discretion to do so.
Aykem has not raised a meritorious argument for denial of leave to amend in the
present motion, despite additional time to prepare following the May 29 Order.
Any mistake, inadvertence, surprise, or excusable neglect at the May 29, 2024
hearing therefore would not have affected the outcome.
The Court denies the motion to vacate the order granting
leave to amend.
In the May 29 Order, the Court denied Aykem’s motion to
intervene because it was moot following the decision to grant leave to amend.
Because the Court does not vacate that decision, the motion to intervene
remains moot.
The Court denies the motion to vacate the order denying
Aykem’s motion to intervene.