Judge: Michael E. Whitaker, Case: 24SMCV05094, Date: 2025-03-06 Tentative Ruling

Case Number: 24SMCV05094    Hearing Date: March 6, 2025    Dept: 207

TENTATIVE RULING - NO. 1

MOTION

            Daniel L. Krishel (“Counsel”), counsel for Defendants Henry Levy aka Henri Levy and Joseph Levy (collectively, “Defendants”), moves to be relieved as counsel for Defendants, citing a breakdown of the attorney-client relationship.  The motions are unopposed.

LEGAL STANDARD

Code of Civil Procedure section 284 provides “[t]he attorney in an action or special proceeding may be changed at any time before or after judgment or final determination as follows: 1. Upon the consent of both client and attorney, filed with the clerk, or entered in the minutes; 2. Upon the order of the court, upon the application of either client or attorney, after notice from one to the other.”

Procedural Requirements

California Rules of Court, rule 3.1362, requires:

(1) the motion must be made on form MC-051; (subd. (a));

(2) it must be accompanied by a declaration on form MC-052 stating why the motion is brought under Code of Civil Procedure section 284(2) instead of a consent brought under section 284(1); (subd. (c));

(3) a proposed order on form MC-053 must be lodged with the court, specifying all hearing dates scheduled in the action or proceeding, including the date of trial, if known; (subd. (e)); and

(4) The documents must be served on the client and on all parties that have appeared in the case. (subd. (d).)

If the notice is served by mail or electronic service, it must be accompanied by a declaration indicating that the address served is the current address, or in the case of service by mail, that it was served on the last known address and a more current address could not be located after reasonable efforts within 30 days before filing the motion.  (Ibid.)  The court may delay the effective date of the order relieving counsel until proof of service of a copy of the signed order on the client has been filed with the court.”  (Ibid.) 

Substantive Requirements

Rules of Professional Conduct, rule 1.16(a) outlines the reasons a lawyer must withdraw from representation of a client:

(1)   the client is bringing an action, conducting a defense, asserting a position in litigation, or taking an appeal, without probable cause and for the purpose of harassing or maliciously injuring any person;

(2)   the representation will result in violation of the Rules of Professional Conduct or the State Bar Act;

(3)   the lawyer’s mental or physical condition renders it unreasonably difficult to carry out the representation effectively; or

(4)   the client discharges the lawyer.

Rules of Professional Conduct, rule 1.16(b) outlines the reasons a lawyer may withdraw from representation of a client:

(1)   the client insists upon presenting a claim or defense in litigation, or asserting a position or making a demand in a non-litigation matter, that is not warranted under existing law and cannot be supported by good faith argument for an extension, modification, or reversal of existing law;

(2)   the client either seeks to pursue a criminal or fraudulent course of conduct or has used the lawyer’s services to advance a course of conduct that the lawyer reasonably believes was a crime or fraud;

(3)   the client insists that the lawyer pursue a course of conduct that is criminal or fraudulent;

(4)   the client by other conduct renders it unreasonably difficult for the lawyer to carry out the representation effectively;

(5)   the client breaches a material term of an agreement with, or obligation, to the lawyer relating to the representation, and the lawyer has given the client a reasonable warning after the breach that the lawyer will withdraw unless the client fulfills the agreement or performs the obligation;

(6)   the client knowingly and freely assents to termination of the representation;

(7)   the inability to work with co-counsel indicates that the best interests of the client likely will be served by withdrawal;

(8)   the lawyer’s mental or physical condition renders it difficult for the lawyer to carry out the representation effectively;

(9)   a continuation of the representation is likely to result in a violation of these rules or the State Bar Act; or

(10)         the lawyer believes in good faith in a proceeding pending before a tribunal that the tribunal will find the existence of other good cause for withdrawal.

DISCUSSION

            Counsel has filed forms MC-051, MC-052, and MC-053 for each client.  The attorney declarations (MC-052) indicate that the motions were filed instead of filing consents because, “client will not adequately and timely cooperate in the defense of the case, including but not limited to, responding to discovery […] resulting in a break-down of attorney client relationship.”  (MC-052 at ¶ 2.)  As such, the Court finds that the motions comply with the Rules of Professional Conduct, rule 1.16(b)(4).) 

            The proofs of service indicates each of these forms were served electronically and by overnight mail on the clients and on counsel for Plaintiff.  The attorney declarations further indicates the clients’ addresses have been confirmed as current within the past 30 days by telephone with the clients.  (MC-052, ¶ 3.)  Therefore, the motions are also procedurally proper.

CONCLUSION AND ORDER

Therefore, having found the Motions are procedurally and substantively proper, the Court grants Counsel’s Motions to be Relieved as Counsel. 

Counsel must serve the signed orders (forms MC-053), which shall include information about all future hearings and proceedings noticed by any party, or ordered by the Court, on the clients and all other parties who have appeared in the action, within 10 days of the date of the Orders, and file proofs of service of such.  Counsel will remain the attorney of record for Defendants until Counsel files the requisite proof(s) of service.  (See Cal. Rules of Court, rule 3.1362(e).) 

Further, to ensure that the Court’s records are updated following the filing of the proof(s) of service, Counsel shall contact the Court to advise that the proof(s) of service has been filed.    

DATED:  March 6, 2025                                            ___________________________

                                                                              Michael E. Whitaker

                                                                              Judge of the Superior Court

TENTATIVE RULING -  NO. 2

MOTION

On October 16, 2024, Plaintiff Patrick Bertranou (“Plaintiff”) filed suit against Defendants Henry Levy aka Henri Levy and Joseph Levy alleging ten causes of action for (1) breach of implied-in-fact contract; (2) money had and received; (3) money lent; (4) account stated; (5) conversion; (6) fraud-concealment; (7) breach of fiduciary duty; (8) constructive fraud; (9) financial elder abuse; and (10) theft. 

Defendant Joseph Levy (“Defendant”) now moves for leave to file a cross-complaint against Plaintiff for breach of oral contract arising from the same underlying cryptocurrency transaction. 

Plaintiff opposes the motion and Defendant replies.

LEGAL STANDARD

A party against whom a cause of action has been asserted in a complaint or cross-complaint may file a cross-complaint setting forth either or both of the following:

(a)   Any cause of action he has against any of the parties who filed the complaint or cross-complaint against him. Nothing in this subdivision authorizes the filing of a cross-complaint against the plaintiff in an action commenced under Title 7 (commencing with Section 1230.010) of Part 3.

(b)   Any cause of action he has against a person alleged to be liable thereon, whether or not such person is already a party to the action, if the cause of action asserted in his cross-complaint (1) arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause brought against him or (2) asserts a claim, right, or interest in the property or controversy which is the subject of the cause brought against him.

(Code Civ. Proc., § 428.10, subds. (a)-(b).) 

(a)   A party shall file a cross-complaint against any of the parties who filed the complaint or cross-complaint against him or her before or at the same time as the answer to the complaint or cross-complaint.

(b)   Any other cross-complaint may be filed at any time before the court has set a date for trial.

(c)   A party shall obtain leave of court to file any cross-complaint except one filed within the time specified in subdivision (a) or (b). Leave may be granted in the interest of justice at any time during the course of the action.

(Code Civ. Proc., § 428.50, subds. (a)-(c).) 

Indeed, where a cause of action would otherwise be lost, leave to amend is appropriate even if the party was negligent in not moving for leave to amend earlier.  “The legislative mandate is clear.  A policy of liberal construction of section 426.50 to avoid forfeiture of causes of action is imposed on the trial court.  A motion to file a cross-complaint at any time during the course of the action must be granted unless bad faith of the moving party is demonstrated where forfeiture would otherwise result.”  (Silver Organizations, Ltd. v. Frank (1990) 217 Cal.App.3d 94, 98-99.)   

DISCUSSION

            Defendant filed an Answer to the Complaint on November 19, 2024, and then filed the instant motion on January 31, 2025.  Defendant explains that the delay in bringing the cross-complaint stems from Defendant suffering from traumatic stress resulting from the incident, and Defendant’s inability to communicate with his counsel about what he endured until January 22, 2025.  (Krishel Decl. ¶¶ 3-4 and Ex. A.)

            Plaintiff opposes the motion and argues that Defendant did not act in good faith in filing this motion, as evidenced by counsel’s pending motions to be relieved as counsel, which indicates Defendants failed to cooperate with providing responsive documents.  Plaintiff also disputes the factual allegations of the proposed cross-complaint, and indicates Defendant has refused to appear for his deposition.  Further, Plaintiff argues that all facts underlying Defendant’s compulsory cross-complaint were known to him.

            Plaintiff’s arguments related to whether Defendant has complied with his obligations under the Discovery Act to be immaterial to whether relief should be granted under Section 428.10. 

            With respect to Defendant’s arguments about the merits of proposed cross-claim, the Court will generally not consider the merits in determining whether to grant leave to amend.  (See Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048 [“the preferable practice would be to permit the amendment and allow the parties to test its legal sufficiency by demurrer, motion for judgment on the pleadings or other appropriate proceedings”].)

            Finally, although the facts underlying the cross-complaint were known to Defendant all along, Defendant has provided an adequate explanation for the delay. 

CONCLUSION AND ORDER

            Therefore, in light of the liberal policy of granting leave to avoid forfeiture of claims, and because Defendant has provided an adequate explanation for the relatively short delay in seeking leave, the Court grants Defendant’s motion for leave to file the proposed cross-complaint against Plaintiff. 

            Further, Defendant shall file and serve the proposed Cross-Complaint on or before March 21, 2025.  Defendant shall provide notice of the Court’s ruling regarding the motion, and file the notice with a proof of service forthwith.

            Further, on the Court’s own motion, the Court continues Case Management Conference from March 6, 2025 to May 7, 2025 at 8:30 A.M. in Department 207.  All parties shall comply with California Rules of Court, rules 3.722, et seq., regarding Initial and Further Case Management Conferences.  In particular, all parties shall adhere to the duty to meet and confer (Rule 3.724) and to the requirement to prepare and file Case Management Statements (Rule 3.725).  Plaintiff shall provide notice of the continued Case Management Conference and file the notice with a proof of service forthwith. 

DATED:  March 6, 2025                                ___________________________

                                                                  Michael E. Whitaker

                                                                  Judge of the Superior Court