Judge Michael P. Linfield, Case Number: 22STCV15352, Date: 2023-09-06 Tentative Ruling

Judge: Michael P. Linfield, Case: 22STCV15352, Date: 2023-09-06 Tentative Ruling

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Case Number: 22STCV15352 Hearing Date: October 23, 2023 Dept: 34

SUBJECT: Motion for Leave to File Second Amended Complaint

Moving Party: Plaintiff Rochelle Sterling Defendant

Resp. Party: Mohammad Fawaz

SUBJECT: Motion for a Global Stay of Proceedings

Moving Party: Plaintiff Rochelle Sterling

Resp. Party: Mohammad Fawaz

The Motion for a Global Stay of Proceedings is GRANTED. This case is STAYED IN ITS ENTIRETY, pending resolution of the criminal matter or waiver of Defendant’s Fifth Amendment right against self-incrimination. Defendant’s Request for Sanctions is DENIED. A status hearing is set for October 23, 2024 regarding the stay. The parties are to file a Joint Status Conference Report 5 court days prior to the status conference hearing.

Since Plaintiff’s request for a stay is being granted, her Motion for Leave to File Second Amended Complaint is DENIED without prejudice to her refiling such a motion when the stay is lifted.

BACKGROUND:

On May 9, 2022, Plaintiff Rochelle Sterling, filed her Complaint against Defendant Mohammad M. Fawaz.

On December 30, 2022, Plaintiff filed her First Amended Complaint.

On May 31, 2023, the Court stayed this matter in its entirety as to Defendant, including motions for sanctions against Defendant and motions for summary judgment. Such discovery is stayed until such time as the criminal proceeding against Defendant is concluded. The case is not stayed as to amending pleadings, discovery on third parties, and to other actions that do not affect Defendant’s Fifth Amendment rights.

On August 8, 2023, Defendant filed his Answer to the First Amended Complaint.

On September 14, 2023, pursuant to the Parties’ Stipulation, the Court entered vacated the trial date and final status conference date, and the Court reset those dates for February 18, 2025 and February 7, 2025, respectively. All discovery and other deadlines were reset to the new dates.

On September 15, 2023, Plaintiff filed her Motion for a Global Stay of Proceedings. Plaintiff concurrently filed two Proposed Orders, one on Judicial Council Form EFS-020 and one specially prepared by Plaintiff.

On September 18, 2023, Plaintiff filed her Motion for Leave to File Second Amended Complaint. Plaintiff concurrently filed: (1) Declaration of Linda Toutant; and (2) Proposed Order.

On October 9, 2023, Defendant filed: (1) Opposition to Motion to Reconsider Scope of Stay; and (2) Statement of Non-Opposition to Motion for Leave to Amend Complaint. Defendant’s Opposition includes a Request for Sanctions.

On October 16, 2023, Plaintiff filed her Reply Supporting Motion for a Global Stay of Proceedings.

ANALYSIS:

I. Motion for a Global Stay of Proceedings

A. Legal Standard

“Every court shall have the power to do all of the following: . . . To amend and control its process and orders so as to make them conform to law and justice. . . .” (Code Civ. Proc., § 128, subd. (a)(8).)

“When an application for an order has been made to a judge, or to a court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order. The party making the application shall state by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown.” (Code Civ. Proc., § 1008, subd. (a).)

B. Discussion

1. The Parties’ Arguments

Plaintiff moves the Court to impose a global stay of proceedings in this matter. (Motion for a Global Stay of Proceedings, p. 6:25–27.) Plaintiff argues: (1) that the Court issued a “clarified (surprise) order”; (2) that the Court should reconsider or amend its stay to be extended globally; (3) that a global stay is fair and equitable; (4) that a one-sided stay is abusive and a misuse of the Fifth Amendment; and (5) that one-sided discovery is burdensome and inefficient. (Id. at pp. 3:2, 4:7, 4:27, 5:22, 6:9.)

Defendant disagrees, arguing: (1) that the motion should be denied based on judicial estoppel; (2) that reconsideration is precluded because the motion was not timely filed; (3) that reconsideration is precluded because there are no new facts, law, or circumstances; (4) that reconsideration is precluded because the statutory standard is jurisdictional; (5) that sanctions are appropriate here; and (6) that there is nothing unfair about the status quo. (Opposition to Motion for a Global Stay of Proceedings, pp. 4:10, 5:17, 5:25, 6:4, 6:13, 7:4, 7:14.)

In her Reply, Plaintiff argues: (1) that judicial estoppel does not apply; (2) that reconsideration is appropriate and timely; and (3) that fairness and judicial economy support a global stay. (Reply, pp. 2:12, 2:24, 3:16.)

2. Reconsideration

The Court considers whether it is appropriate to reconsider its prior orders.

Defendant twice applied for a stay. The first time Defendant applied for a stay, insufficient evidence was submitted to indicate that his Fifth Amendment rights would be at issue, and thus the Court denied any stay. Defendant had been indicted before he applied a second time for a stay. On May 31, 2023, upon considering the matter, as well as the Parties’ arguments, the Court granted a limited stay in the case.

Plaintiff argues that the 10-day period has not begun because Plaintiff did not receive notice of the order. (Motion for a Global Stay of Proceedings, p. 4:14–19.) The Court disagrees. Plaintiff appeared at the hearing on that motion, opposed any stay, and argued in the alternative that any stay should be limited. The Court issued its ruling at the hearing, with the modifications listed in its Minute Order dated May 31, 2023. Thus, there is no issue with service upon Plaintiff.

More than 10 days have passed since the issuance of the Minute Order dated May 31, 2023. Thus, Plaintiff cannot seek reconsideration of the Minute Order dated May 31, 2023 pursuant to Code of Civil Procedure section 1008, subdivision (a).

To the extent that Plaintiff seeks reconsideration of the Minute Order dated September 6, 2023, the Court agrees with Defendant that such a motion should be denied because there are no new facts, circumstances, or law at hand.

Further, the Court disagrees with the notion that the Court issued a “surprise order” on September 6, 2023. Rather, the Court merely clarified what should have already been clear: that the stay was limited so that Defendant’s Fifth Amendment right could be protected. As stated before, “Defendant is now acting in accordance with Plaintiff’s requested relief.” (Minute Order dated September 6, 2023, p. 7.) It strikes the Court as ironic that Plaintiff, who twice opposed any stay, and in the alternative argued that any stay should be limited — presumably so that Plaintiff could continue to use discovery as a sword against Defendant by conducting discovery through third parties — now argues that it is unfair that Defendant can still use discovery as a sword against Plaintiff. (Motion for a Global Stay of Proceedings, pp. 5:24–26, 6:25; Reply, p. 3:17–19.)

3. Judicial Estoppel

“Judicial estoppel is an equitable doctrine that applies when ‘(1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake.’ The application of judicial estoppel, even when all necessary elements are present, is discretionary.” (Brown v. Ralphs Grocery Co. (2018) 28 Cal.App.5th 824, 842, quoting Aguilar v. Lerner (2004) 32 Cal.4th 974, 986–987, also citing MW Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co., Inc. (2005) 36 Cal.4th 412, 422.)

The Court need not, and does not, consider whether all of the factors for judicial estoppel are present here. This is because, given the ongoing criminal matter, bringing this action to trial any sooner than the February 18, 2025 trial date appears to be impossible, impracticable, or futile. (See, for example, Code Civ. Proc., § 583.340, subd. (c).) Put differently, it matters not whether the Court judicially estops Plaintiff from arguing for a global stay because, at present, it appears that the criminal matter is impeding the ultimate resolution of this civil matter.

Thus, the Court declines to exercise its discretion to judicially estop Plaintiff from arguing for a global stay.

4. Expanding the Limited Stay to a Global Stay

Upon consideration of the Parties’ respective arguments, the Court agrees with Plaintiff’s argument that the Court has the power to issue a stay pursuant to Code of Civil Procedure section 128.

Further, the Court agrees with Plaintiff’s argument that a global stay of all proceedings in this matter would be appropriate. Neither Plaintiff nor Defendant should be able to obtain an advantage against the other in discovery or by other procedural mechanisms until the criminal matter is resolved or Defendant has chosen to waive his Fifth Amendment right against self-incrimination in this matter. Until that point, allowing the civil matter to proceed would be inefficient and unjust.

Further, the Court is aware that Plaintiff filed this case. If Plaintiff wishes to stay the case, there is less of an issue of “gaming the system” or “delaying for the purpose of delay.”

As the Court is expanding the limited stay to a global stay, it would be inappropriate to grant Defendant’s Request for Sanctions.

C. Conclusion

II. Motion for Leave to File Second Amended Complaint

A. Discussion

Plaintiff moves for leave to file her proposed Second Amended Complaint. (Motion for Leave to File Second Amended Complaint, p. 8:7–9.) Plaintiff meets all of the procedural requirements required by California Rules of Court, rule 3.1324. (See Decl. Toutant, ¶¶ 2–6 and Exhs. A–B.)

Defendant does not oppose this relief; he only asks for 30 days to respond to the amended complaint. (Statement of Non-Opposition to Motion for Leave to Amend Complaint, p. 1:20–21.)

However, since the Court is granting Plaintiff’s motion for a stay, it cannot grant leave to file a FAC.

B. Conclusion

The Motion for Leave to File Second Amended Complaint is DENIED without prejudice to it being refiled after the stay is lifted.