Judge: Mark C. Kim, Case: 19LBCP00356, Date: 2022-08-03 Tentative Ruling
Case Number: 19LBCP00356 Hearing Date: August 3, 2022 Dept: S27
Plaintiff, Lawrence Eber filed this
action against Defendants, Veterans Care Coordination, LLC (“VCC”), AVCC, LLC (“AVCC”),
Stacy John Sanchez, Stacy’s In Home Care, Inc. (collectively “Stacy’s”), and American
Veterans Group (“AVG”) for damages arising out of an alleged scheme to fraudulently
poach his pension. Specifically,
Plaintiff alleges he is a veteran who suffers from alcoholism and various
medical ailments. In 2016, he became a
resident at Cabrillo Village (“The Village”); his residency was through U.S. Vets,
which provides housing services for veterans.
While a resident at The Village, Plaintiff met Dawn Thompson. Plaintiff trusted Dawn, and Dawn told Plaintiff
she would help him obtain a VA caregiver due to his difficulty performing his
necessary chores.
In April of 2017, Dawn called Plaintiff
into her office to sign papers. Plaintiff
believed the papers related to permanent housing, and he signed them. Thereafter, caregivers began to show up at The
Village to assist Plaintiff; the caregivers, however, were not helpful and
indeed sometimes did things that were harmful to Plaintiff. In June of 2017, Plaintiff again met with Dawn
and again signed paperwork, again believing the paperwork to be related to
permanent housing.
The papers Plaintiff signed were
actually applications for pension funds from the VA to pay for caregivers. Among the papers was a paper allowing the company
providing the caregivers to electronically withdraw the funds deposited into
Plaintiff’s bank account by the VA to pay for the caregivers. Plaintiff spoke with someone named Nicole
from VCC, who talked to him about coordinating his caretakers.
Plaintiff continued to have caregivers,
and they continued to provide little to no value to Plaintiff, and to sometimes
act to his detriment. Meanwhile, every
month his account was credited $1794 from the VA, and that amount was immediately
removed by “Veterans Care retro.” This
amount subsequently increased to $1820/month.
Plaintiff believes VCC, Sanchez, and/or AVG retrieved the funds.
In April of 2018, Sanchez visited
Plaintiff and said he was the owner of the company that had provided caregivers
in the past. Sanchez told Plaintiff he
was changing corporate partners for the services because he was leaving VCC; at
this time, Sanchez and AVG switched Plaintiff from VCC to AVCC. Sanchez told Plaintiff to call his bank to cease
further electronic withdrawals to VCC and to instead write personal checks to American
Veterans Group, which was associated with or hired by AVCC. Plaintiff told Sanchez he could not do this
and instructed Sanchez to contact his brother, Rick, to handle it. Thereafter, Rick wrote personal checks to AVG.
Plaintiff ultimately, through his
brother’s investigative efforts, determined that only 40% of Plaintiff’s
pension money was supposed to be allocated to caregivers, and the remainder was
supposed to be allocated to Plaintiff personally. Making this worse, the fact that Plaintiff
was receiving the pension meant his access to other means-based programs was
reduced, including his HUD subsidies, Social Security, SSI, and MediCal. When Plaintiff’s brother indicated an intent not
to pay AVCC, AVCC threatened to sue for breach of contract.
Plaintiff’s complaint includes
causes of action for:
·
Fraud (VCC, Sanchez, AVG);
·
Fraud – Concealment (all defendants);
·
Conspiracy to Defraud (all defendants);
·
Breach of Fiduciary Duty (all defendants);
·
Conversion (all defendants);
·
Negligence (all defendants);
·
Financial Elder Abuse (all defendants);
·
Common Count for Money Had and Received (all
defendants);
·
Accounting and Imposition of Constructive Trust and/or
Equitable Lien (all defendants);
·
Declaratory Relief (all defendants).
On 11/31/21, the Court heard Defendants,
Stacy John Sanchez and Stacy’s In Home Care, Inc.’s motion for an order staying
the instant action until expiration of the criminal statute of limitations
against Defendants or, alternatively, staying all discovery directed at
them. The Court balanced the necessary
factors and found a blanket stay of all proceedings was not warranted. The Court also found a blanket stay of
discovery was not warranted. The Court
denied the motion, and ordered Defendants to assert their Fifth Amendment
rights on a question by question basis in connection with discovery.
a.
Procedural
History
Defendants filed this renewed motion for a stay of proceedings on
7/26/22, setting it for hearing on 9/08/22.
On 7/27/22, the Court heard Defendants’ ex parte application to advance the
hearing on the motion. The Court granted
the motion and set the matter for hearing on 8/03/22. The Court ordered the parties to meet and confer
re: a stay and/or severance. Neither the
Court’s minute order nor Plaintiff’s Notice of Ruling specified a briefing
schedule. As of the drafting of this
tentative ruling, the Court has not received written opposition to the renewed
motion.
b.
Relief
Sought
Defendants seek an order staying the litigation against them pending
expiration of criminal proceedings against them. In the alternative, they seek an order
staying the action as to them, and severing the action against the
co-defendants so it can be tried separately (and earlier). They contend the motion is based on new facts,
specifically the fact that their depositions went forward with a discovery
referee, and the referee sustained their Fifth Amendment objections.
c.
Law
Governing Stay of Civil Actions when Parallel Criminal Actions are Pending
Any party or witness in a discovery
proceeding may claim the 5th Amendment privilege against disclosure of
information that might tend to incriminate him or her under either federal or
state law. Zonver v. Sup.Ct. (1969) 270 CA2d 613, 620-621. No “punishment” can be imposed against a
party or witness for claiming the privilege against self-incrimination. But, at
the same time, a party is not permitted to take advantage of his or her
adversary by invoking the 5th Amendment; i.e., the party “may be required either
to waive the privilege or accept the civil consequences of silence if he or she
does exercise it.” Blackburn v. Sup.Ct.
(1993) 21 CA4th 414, 425-426. In any
case, a blanket claim of “self-incrimination” is insufficient. The court must
have the opportunity to determine whether specific questions pose a threat of
self-incrimination. Fuller v. Sup.Ct. (2001) 87 CA4th 299, 305. The party or witness must assert the
privilege as to particular questions asked or other evidence sought. A blanket
refusal to appear or testify is not sufficient. Warford v. Medeiros (1984) 160
CA3d 1035, 1045.
A defendant claiming the privilege
against self-incrimination to avoid discovery risks the court excluding his or her
testimony as to such matters at time of trial. See Marriage of Hoffmeister
(1984) 161 CA3d 1163, 1169. Alternatively,
a plaintiff may seek a protective order prior to trial to bar the defendant
from testifying to such matters when the case comes to trial. Pacers, Inc. v.
Sup.Ct. (1984) 162 CA3d 686, 688-689.
The court may stay discovery until
disposition of any pending criminal proceedings or until the statute of
limitations has run on criminal prosecution, so that defendant can no longer
claim a 5th Amendment privilege. Pacers, supra, at 689. Such a stay is discretionary; a defendant has
no right to a blanket stay on 5th Amendment grounds. Klein v. Sup.Ct. (1988)
198 CA3d 894, 905. In Avant! Corp. v.
Sup.Ct. (2000) 79 CA4th 876, 885, the court enumerated the factors to be
considered in determining whether or not to stay the action. Additionally, a stay is not favored where
the statute of limitations on criminal prosecution has years to run. Fuller, supra, at 309.
In Avant!, supra, the court delineated
the factors to be considered in determining whether to grant a blanket stay as
follows:
In addition, the decisionmaker
should generally consider the following factors: (1) the interest of the
plaintiffs in proceeding expeditiously with this litigation or any particular
aspect of it, and the potential prejudice to plaintiffs of a delay; (2) the
burden which any particular aspect of the proceedings may impose on defendants;
(3) the convenience of the court in the management of its cases, and the efficient
use of judicial resources; (4) the interests of persons not parties to the
civil litigation; and (5) the interest of the public in the pending civil and
criminal litigation.
d. Analysis
Defendants’ moving papers show that
Sanchez, in deposition, successfully asserted his Fifth Amendment privilege in
connection with a variety of issues that go to the heart of this case. Defendants renew their request for a blanket
stay of the action against them in light of the deposition.
Trial in this case is scheduled for
8/15/22. The case has been pending since
10/02/19. If the motion is unopposed,
the Court will grant the motion and sever the case against Moving Defendants
pending expiration of the SOL on criminal proceedings against them and/or
completion of such proceedings. If the
motion is opposed, the Court wishes to hear argument from the parties on the
four factors detailed above, and will make a final determination of the issue
at the conclusion of the hearing.
The Court asks Counsel to
make arrangements to appear remotely at the hearing on this matter.