Judge Michael P. Linfield, Case BC527716 2022-11-29 Tentative Ruling

The Court often posts its tentative several days in advance of the hearing. Please re-check the tentative rulings the day before the hearing to be sure that the Court has not revised the ruling since the time it was posted.

Please call the clerk at (213) 633-0154 by 4:00 pm. the court day before the hearing if you wish to submit on the tentative.

The Court sets an OSC why this matter should not also be dismissed with prejudice as to Defendants Baker and OMSJ pursuant to Code Civ. Proc., § 583.310. The OSC will be held on December __, 2023.

On November 15, 2013, Plaintiff James Murtagh, M.D. filed his Complaint against Defendant Clark Baker on causes of action of intentional interference with contractual relations, inducing breach of contract, and injunction.

On January 24, 2014, Plaintiff filed his First Amended Complaint against Defendant Baker on the prior causes of action, with the addition of a cause of action for intrusion into private affairs.

On August 18, 2014, Plaintiff filed his Second Amended Complaint against Defendants Baker and Office of Medical & Scientific Justice, Inc. (“OMSJ”) on the prior causes of action, with the addition of causes of action of unauthorized commercial use of name/likeness and violation of Code of Civil Procedure section 3344.

On February 18, 2015, Plaintiff filed his Third Amended Complaint against Defendants on the prior causes of action, with the addition of causes of action of intentional infliction of emotional distress, negligent infliction of emotional distress, negligence, defamation, violation of Civil Code section 1798.53, intentional interference with prospective economic advantage, violation of Business and Professions Code sections 17200 and 17500, and declaratory relief.

On August 10, 2022, Plaintiff filed his Fourth Amended Complaint (“Fourth Amended Complaint”) against Defendants Clark Baker, OMSJ, Robert Leppo, and D. David Steele. The Fourth Amended Complaint is the first time Messrs. Leppo and Steele were included as Defendants.

(2) Intentional Interference with Contractual Relations (against all Defendants);

(3) Intentional Interference with Prospective Economic Advantage (against all Defendants);

(5) Violation of Business and Professions Code section 17200 (against all Defendants);

On September 26, 2022, Defendant Robert Leppo filed his Motion to Dismiss Fourth Amended Complaint. Defendant Leppo concurrently filed: (1) Request for Judicial Notice; (2) Proposed Order; and (3) Proof of Service.

On September 30, 2022, Defendant D. David Steele filed his Motion to Dismiss under CCP Section 418.10(a)(3). Defendant Steele concurrently filed: (1) Request for Judicial Notice; (2) Declaration of D. David Steele; and (3) Proposed Order.

On October 18, 2022, Plaintiff filed his Response to Motions to Dismiss. Plaintiff concurrently filed: (1) Declaration of James Murtagh, M.D.; (2) Declaration of Derek Linke; and (3) Amended Declaration of Derek Linke.

On October 25, 2022, Defendant Steele filed his Reply. Defendant Steele concurrently filed: (1) Supplemental Declaration of Defendant Steele; and (2) Objections to Declarations of Derek Linke and Plaintiff. Defendant Steele’s Reply was filed late and the hearing was continued as a result. As the parties have now had ample time to consider all the filings on these motions, Court will consider Defendant Steele’s Reply.

Defendant Leppo requests that the Court take judicial notice of the following items:

(5) The court docket in the matter of In re Clark Warren Baker, United States Bankruptcy Court, Central District of California, Case No. 2:15-bk-20351-BB;

(6) The court docket in the matter of In re Office of Medical & Scientific Justice, Inc., United States Bankruptcy Court, Central District of California, Case No. 2:15-bk-20345-BB;

(9) Plaintiff’s Proof of Service of the Summons and Fourth Amended Complaint for Defendant Leppo; and

Judicial notice is DENIED as superfluous as to requests nos. 1-4 and 7-10. Any party that wishes to draw the Court’s attention to a matter filed in this action may simply cite directly to the document by execution and filing date. (See Cal. Rules of Court, rule 3.1110(d).)

Defendant Steele requests that the Court take judicial notice of the following items:

(8) Minute Order, dated March 15, 2016, in In re Office of Medical & Scientific Justice, Inc., United States Bankruptcy Court, Central District of California, Case No. 2:15-bk-20345-BB;

(9) Discharge of Petition for Bankruptcy, dated June 15, 2016, in In re Clark Warren Baker, United States Bankruptcy Court, Central District of California, Case No. 2:15-bk-20351-BB;

(10) Plaintiff’s Joint Status Conference Report, dated March 5, 2019, in this matter; and

(11) Plaintiff’s Motion for Leave to Amend, dated July 1, 2022, in this matter.

Judicial notice is DENIED as superfluous as to requests nos. 1-5, 10 and 11. Any party that wishes to draw the Court’s attention to a matter filed in this action may simply cite directly to the document by execution and filing date. (See Cal. Rules of Court, rule 3.1110(d).)

The Court rules as follows on Defendant Steele’s Objections, filed on October 25, 2022:

Objection
1		OVERRULED
2		OVERRULED
3		OVERRULED
4		OVERRULED
5	SUSTAINED
6		OVERRULED
7		OVERRULED
8	SUSTAINED
9		OVERRULED

III. Motions to Dismiss Pursuant to Code of Civil Procedure Section 583.210, et seq.

“The summons and complaint shall be served upon a defendant within three years after the action is commenced against the defendant. For the purpose of this subdivision, an action is commenced at the time the complaint is filed.” (Code Civ. Proc., § 583.210, subd. (a).)

“In computing the time within which service must be made pursuant to this article, there shall be excluded the time during which any of the following conditions existed:

(b) “The prosecution of the action or proceedings in the action was stayed and the stay affected service.

(d) “Service, for any other reason, was impossible, impracticable, or futile due to causes beyond the plaintiff’s control. Failure to discover relevant facts or evidence is not a cause beyond the plaintiff’s control for the purpose of this subdivision.”

“If service is not made in an action within the time prescribed in this article:

(1) “The action shall not be further prosecuted and no further proceedings shall be held in the action.

(2) “The action shall be dismissed by the court on its own motion or on motion of any person interested in the action, whether named as a party or not, after notice to the parties.”

“The requirements of this article are mandatory and are not subject to extension, excuse, or exception except as expressly provided by statute.” (Code Civ. Proc., § 583.250, subd. (b).)

Defendant Leppo moves the Court to dismiss Plaintiff’s Fourth Amended Complaint. One of Defendant Leppo’s two primary arguments is that Code of Civil Procedure section 583.210 requires mandatory dismissal of this action against Defendant Leppo. Specifically, Defendant Leppo argues: (1) that Plaintiff failed to serve Defendant Leppo with the summons and Fourth Amended Complaint within three years from when this action was commenced in 2014; (2) dismissal under section 583.210 is mandatory; and (3) that there is no basis for tolling as to Defendant Leppo. (Leppo Motion to Dismiss, pp. 9:11–13, 11:6–17, 11:18–19, and 12:13–19.)

Defendant Steele also moves the Court to dismiss Plaintiff’s Fourth Amended Complaint. One of Defendant Steele’s three primary arguments is the same as that of Defendant Leppo: that Code of Civil Procedure section 583.210 requires mandatory dismissal of this action against Defendant Steele. (Steele Motion to Dismiss, pp. 8:19–22, 10:20–25.)

Plaintiff requests that the Court deny both Motions to Dismiss. (Plaintiff’s Response, p. 17:24–25.) Specifically, Plaintiff argues: (1) that Defendants Leppo and Steele should be estopped from obtaining dismissal as the result of their deceptive conduct and statements; (2) that dismissal is improper in this case because newly added defendants are alleged to be alter egos of a defendant named in the earlier complaint; and (3) that dismissal is also improper because the amended complaint adds a new cause of action based on operative facts different than those underlying the original complaint. (Id. at pp. 13:1–2, 14:24–25, 16:3–4.)

In his Reply, Defendant Leppo argues: (1) that Plaintiff has conceded the merits of Defendant Leppo’s argument by failing to address the legal arguments and authorities in Defendant Leppo’s moving papers; (2) that Defendant Leppo is not estopped from dismissing this matter; (3) that Plaintiff’s alter ego allegations do not prevent dismissal; and (4) that the claims in the Fourth Amended Complaint relate back to the prior complaints and are therefore time barred. (Leppo Reply, pp. 2:10–18, 2:19, 3:15–19, 5:2–10, 6:1, 7:9–15, 7:16–17, 8:6–24.)

In his Reply, Defendant Steele argues: (1) that Plaintiff’s equitable estoppel argument is without merit in regard to both the three-year service statute and the five-year trial statute; (2) that Plaintiff conflates the holding of Hennessey’s Tavern regarding newly-added defendants as opposed to newly identified defendants; (3) that Plaintiff misinterprets the deadline for filing a timely claim for alter ego liability; (4) that Plaintiff’s reliance on Barrington is misplaced because Plaintiff’s Fourth Amended Complaint is based on the same general set of facts as the operative complaint. (Steele Reply, pp. 5:13–14, 6:6–7, 9, 4–5, 12:3–4, 15:11–12, 17:8–9.)

As a preliminary matter, the Court does not agree with Defendant Leppo’s argument in his Reply that Plaintiff has conceded Defendant Leppo’s arguments. This is simply not accurate, and the Court does not consider this argument further.

The Court next considers whether Code of Civil Procedure section 583.210 is implicated here. If so, the Court will consider whether any of Plaintiff’s arguments are correct.

(1) Plaintiff filed his original Complaint on November 15, 2013 (Complaint, p. 1);

(2) Plaintiff filed his Fourth Amended Complaint on August 10, 2022 (Fourth Amended Complaint, p. 1);

(3) the Fourth Amended Complaint was the first complaint to include Messrs. Leppo and Steele as Defendants (Id.); and

(4) the first time Defendant Leppo was served in this case was on September 4, 2022, via substituted service on his assistant at his place of business (Proof of Service, filed September 9, 2022, Item 5.b.).

In addition, it is undisputed that Defendant Steele is actually aware of the Fourth Amended Complaint, although there is currently no proof before the Court that he has been properly served.

Defendant Leppo was served more than eight years after the filing of the original Complaint and that Defendant Steele became aware of the case after a similar amount of time.

Plaintiff does not dispute that more than three years have passed since the filing of the original Complaint. In addition, Plaintiff has not argued that Defendants made a general appearance or that time was extended by Plaintiff by stipulation or oral agreement in court. (Code Civ. Proc., §§ 583.220, 53.230.) Nor has Plaintiff argued: (1) that the computed time should be tolled because of process of the Court; (2) that there was a stay that affected service; (3) that validity of service was the subject of litigation by the parties; or (4) that service was for any other reason impossible, impracticable, or futile due to causes beyond Plaintiff’s control. (Code Civ. Proc., § 583.240, subds. (a)–(d).)

The Court finds that Code of Civil Procedure section 587.210 is implicated here as to both Defendants. The Court thus considers Plaintiff’s arguments as to relation back of new causes of action, alter ego, and equitable estoppel.

“A new cause of action in an amended complaint is held to relate back to the earlier pleaded claims if the later cause of action ‘(1) rest[s] on the same general set of facts, (2) involve[s] the same injury, and (3) refer[s] to the same instrumentality, as the original one.’” (Brumley v. FDCC Cal., Inc. (2007) 156 Cal.App.4th 312, 323, quoting Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 409 [emphases omitted].)

“Thus, when a complaint is amended only to identify a party by its proper name, the gravamen of the complaint remains unaltered, and hence the later pleading relates back to the earlier pleading. By the same token, however, when a complaint is amended to allege a new cause of action based on different operative facts, the new cause of action is different in nature from any cause of action contained in the earlier complaint, and hence does not relate back.” (Barrington v. A. H. Robins Co. (1985) 39 Cal.3d 146, 154.)

“The relation-back doctrine, however, is not concerned with circumstances which excuse a failure to serve and return summons within the three-year period, but with the question of when the three-year period starts on a cause of action unrelated to the original complaint, a matter not considered by the Legislature.” (Id. at 155.)

Plaintiff argues that dismissal is improper here because: (1) the Fourth Amended Complaint “adds a wholly new cause of action for conspiracy based on operative facts different from those in the earlier complaint”; (2) under the declaratory relief cause of action, it “seeks forms of declaratory relief relating to completely new operative facts as to [Defendant] Leppo’s liability as OMSJ’s alter ego”; and (3) that the Fourth Amended Complaint “seeks relief for harms to [Plaintiff’s] contractual relationships which are by definition different from those in the earlier complaint, as they were occurred after it was filed [citing ¶ 129 (a)–(k) for relationships from 2016 – 2018 and ¶ 130 for relationships from 2018 – 2019].” (Plaintiff’s Response, p. 16:3–5, 16:15–25.)

Defendant Leppo argues that dismissal is proper because the claims do in fact relate back because “the gravamen of Plaintiff’s Fourth Amended Complaint is no different from prior complaints – they all contain a general set of facts regarding how [Defendants] Baker and OMSJ allegedly engaged in conduct designed to harass and harm Plaintiff through defamatory ‘webpages.’ [Citation omitted.] Indeed, this is particularly true since Plaintiff is alleging that [Defendants] Leppo and Steele are mere alter egos of [Defendants] Baker and OMSJ. [Citation omitted.] Ultimately, the Fourth Amended Complaint essentially contains the same general facts as the prior complaints, resulting in the same injuries, and involving the same instrumentalities.” (Leppo Reply, p. 8:12–21.)

Defendant Steele similarly argues that dismissal is proper because Plaintiff’s Fourth Amended Complaint is “based on the same general set of facts as the operative complaint” and that the new causes of action “are not based on different operative facts.” (Steele Reply, p. 18:13–17.) Moreover, Defendant Steele argues that Plaintiff made this argument himself when he moved the Court for leave to file his Fourth Amended Complaint. (Id. at p. 18:13–25.)

The Court agrees with Plaintiff. To the extent that the new cause of action (conspiracy) and any of the prior causes of action are based upon “new” acts (i.e., acts that occurred after the time the Third Amended Complaint was filed) by Defendants Leppo and/or Steele, those causes of action do not relate back so far as they concern the new acts. Thus, the Court finds that the three-year window for these causes of action begins at the time Plaintiff filed his Fourth Amended Complaint.

“When a defendant is first named in an amended complaint, and is alleged to be the alter ego of a defendant named in the original complaint, he is brought into the action as a new defendant and the action is commenced as to him at the time the amended complaint naming him is filed. It is necessary that the new defendant be named in the amended complaint and summons issued thereon, and that they be served upon him, in order for the court to acquire jurisdiction over him and he be afforded his due process rights to notice and the opportunity to be heard. This is true even though the alter ego defendant is considered to be identical with, i.e., the ‘other self’ of, the defendant named in the original complaint.

“Based on the foregoing we hold that an alter ego defendant added as a new defendant in an amended complaint must be served with the amended complaint and summons thereon within three years after the filing of the amended complaint first naming such defendant.” (Hennessey’s Tavern, Inc. v. Am. Air Filter Co. (1988) 204 Cal.App.3d 1351, 1359–60.)

At first glance, the issue here appears to be very simple: whether Plaintiff first named Defendants Leppo and/or Steele as alter egos of Defendant OMSJ in an amended complaint. If so, then the action is deemed to be commenced against them at the time the amended complaint was filed. (Hennessey’s Tavern, supra, at 1350–60.)

Here, Plaintiff clearly alleged for the first time that “[Defendant] Leppo and [Defendant] OMSJ are each alter egos of one another . . . such that [Defendant] OMSJ’s corporate entity should be disregarded and [Defendant] OMSJ’s acts should be treated as if they were done by the persons actually controlling the corporation.” (Fourth Amended Complaint, ¶ 24.) This is repeated in the seventh cause of action for declaratory relief. (Id. at ¶ 341.)

However, Plaintiff has not actually alleged in any of his complaints that Defendant Steele is an alter ego of Defendant OMSJ. Thus, if the Court would apply the reasoning of Hennessey’s Tavern here, then the Court would only do so with respect to Defendant Leppo.

Before making such a determination with respect to Defendant Leppo, however, the Court discusses three arguments made by Defendant Steele.

Defendant Steele argues that the standard in Hennessey’s Tavern does not apply here because Plaintiff substituted Defendants Leppo and Steele in for previously unidentified Does 1 and 2 instead of simply adding Defendants to the matter as new defendants. (Steele Reply, pp. 13–15.)

On a surface level, the Court agrees with Defendant Steele that the facts in Hennessey’s Tavern (where two defendants were added as new defendants in an amended complaint on the theory that the new defendants were alter egos of an existing defendant) are procedurally different from the facts here (where Defendants Leppo and Steele were originally identified by the fictitious names Doe 1 and Doe 2 but later identified by their true names). (Hennessey’s Tavern, supra, at 1355; Motion for Leave to file Fourth Amended Complaint, p. 4:2–4.) Moreover, Hennessey’s Tavern does state that “[w]hen a defendant is named in the original complaint by fictitious name, but is identified by his true name in an amended complaint, the ‘relation back’ doctrine applies and the action commences as to such defendant when the original complaint is filed.” (Id. at 1359.)

Yet Defendant Steele’s argument does not fully discuss Hennessey’s Tavern. In addition to the section quoted above, the Court of Appeal also stated that “[i]t is established that an action may be brought against an alter ego defendant after the statute of limitations applicable to the cause of action alleged in the original complaint has expired” and that “[w]hen a defendant is first named in an amended complaint, and is alleged to be the alter ego of a defendant named in the original complaint, he is brought into the action as a new defendant and the action is commenced as to him at the time the amended complaint naming him is filed.” (Id., emphases added.) The Court of Appeal then made its specific holding “that an alter ego defendant added as a new defendant in an amended complaint must be served with the amended complaint and summons thereon within three years after the filing of the amended complaint first naming such defendant.” (Id. at 1360.)

To be clear, the quote above regarding fictitious defendants does not discuss fictitious defendants that are later identified as alter egos of a defendant who was previously and properly served in an earlier complaint. Nor is such a situation discussed elsewhere in Hennessey’s Tavern. That makes sense because the Court of Appeal in Hennessey’s Tavern was explicitly considering the issue before it as “a question of first impression.” (Id. at 1357.) The Court of Appeal did not need to hold further than the facts before it. However, the dicta and the reasoning behind the holding in Hennessey’s Tavern – that an action brought against an alter ego defendant is brought to that alter ego as a new defendant and commenced as to that alter ego at the time the amended complaint naming the alter ego is filed – hold here as to Defendant Leppo.

Furthermore, even if the Court were to apply the relation back doctrine here, the analysis and results are not as straightforward as Defendant Steele claims. (For further discussion, see sections on Relation Back supra and infra.)

Before making concluding remarks on this matter, the Court considers Defendant Steele’s other arguments regarding the alter ego allegations.

Defendant Steele argues that Plaintiff has changed his legal position on the relation back doctrine, which “may have momentarily salvaged Plaintiff’s obvious statute of limitations problem, but it also created a worse problem – a Three-year rule violation.” (Id., pp. 12:5–28, 13:1–4.)

Again, a perfunctory analysis indicates that Plaintiff has changed legal positions. When Plaintiff moved the Court for leave to amend his Complaint for the fourth time, he cited Code of Civil Procedure section 474 for the proposition that the Fourth Amended Complaint would not be barred by the statute of limitations because the Fourth Amended Complaint “relates directly to the subject matter of this action” and that “[a]ll of the proposed amendment’s causes of action arise from the same general set of facts about [Defendants] Baker and OMSJ’s efforts to harm [Plaintiff] set forth in the operative Third Amended Complaint.” (Motion for Leave to Amend, p. 6:1–4, 6:24–27, 7:1–2.) But in his Response to the Motions to Dismiss, Plaintiff argues that dismissal is improper here because the “amended complaints adds a new cause of action based on operative facts different than those underlying the original complaint” and “seeks forms of declaratory relief relating to completely new operative facts as to [Defendant] Leppo’s liability as OMSJ’s alter ego.” (Response, p. 16:3–4, 16:15–19.)

While the Court does view these as different legal positions, they are also reconcilable.

As a procedural matter, Defendant Steele correctly recognizes that “Plaintiff filed his Motion to Amend, which was unopposed by [Defendants] Baker and OMSJ, and granted by the Court.” (Steele Reply, p. 12:5–6.) Although the Court granted Plaintiff leave to amend, the Court did not discuss the relation back doctrine at all, much less make any findings on it. (Minute Order dated August 3, 2022.) Thus, the Court did not previously have a reason to scrutinize whether there was an issue implicating the relation back doctrine.

More importantly, as a substantive matter, application of the relation back doctrine in this matter is complicated. This case has proceeded for nearly nine years; the penultimate complaint is the Third Amended Complaint filed on February 18, 2015. Plaintiff’s Fourth Amended Complaint lists Defendant Leppo as an alter ego of Defendant OMSJ, and the Fourth Amended Complaint includes causes of action based on allegations occurring both before February 18, 2015 as well as after February 18, 2015. It is indeed possible for all of the allegations regarding both Defendants Leppo and Steele to have a relationship with the prior allegations made, even as some of the allegations may invoke application of the “relation back” doctrine while other allegations do not.

At this time, the Court sees Plaintiff’s arguments in the Motion for Leave to Amend and the Response to the Motions to Dismiss as different but reconcilable.

Defendant Steele argues that “Plaintiff cannot have it both ways. He cannot characterize [Defendant] Steele as a newly identified defendant to benefit from the ‘relation back’ doctrine to avoid a statute of limitations problem, and then try to characterize [Defendant] Steele as a newly added defendant to avoid the ‘relation back’ doctrine so as to avoid a potential Three-year rule violation.” (Steele Reply, pp. 14:25–27, 15:1–2.)

Defendant Leppo also makes this argument solely in a footnote in his Reply: “Of course, Plaintiff also cannot claim [Defendant] Leppo is a new defendant brought into the action for the first time avoid the three-year service statute, as the complaint would then be time-barred against [Defendant] Leppo under the applicable statute of limitations, as well.” (Leppo Reply, fn. 3.)

The Courts of Appeal have repeatedly discussed how “[t]he nature and purpose of the three-year service off process statute and the statute of limitations are virtually identical.” (Hennessey’s Tavern, supra, at 1359, citing Barrington, supra, at 152.) While this is an important argument, it is also waivable, and neither Defendant Steele nor Defendant Leppo made this argument in their respective Motions to Dismiss. Their Replies are the first time the Court is hearing this argument as to the claims made in the Fourth Amended Complaint. Although the Court recognizes that the Defendants are replying to Plaintiff’s argument about the relation back doctrine, they cannot raise the statute of limitations issue at this late stage. The Court will not consider the statute of limitations issue at this time.

The Court finds that, due to the allegation of alter ego, Defendant Leppo, but not Defendant Steele, is treated for purposes of service as though the action began at the time Plaintiff filed his Fourth Amended Complaint. Therefore, the Court finds that Defendant Leppo has been served within the three-year window provided for by Code of Civil Procedure section 583.210, et seq., while Defendant Steele has not.

“The doctrine of equitable estoppel is applicable to motions to dismiss for failure to effectuate service within three years. (Brookview Condo. Owners’ Ass’n v. Heltzer Enters.-Brookview (1990) 218 Cal.App.3d 502, 510, citation omitted.)

“Equitable estoppel requires that (1) the party to be estopped was aware of the operative facts and either intended that its act or omission be acted upon, or acted in such a way that the party asserting estoppel rightfully believed it was intended; and (2) the party asserting estoppel was unaware of the facts and relied on the other party's conduct to its detriment. The party asserting estoppel has the burden to establish these elements.” (Gaines v. Fidelity Nat’l Tit. Ins. Co. (2016) 62 Cal.4th 1081, 1097–98 [citations omitted].)

“[T]he determination of whether a defendant's conduct is such as to invoke the doctrine of equitable estoppel is a factual question confided to the discretion of the trial court[.]” (Griffis v. S. S. Kresge Co. (1984) 150 Cal.App.3d 491, 500, citing Tresway Aero, Inc. v. Super Ct. (1971) 5 Cal.3d 431, 440.)

Plaintiff’s argument that Defendants Leppo and Steele are equitably estopped, is based on several letters. (Plaintiff’s Response, pp. 3–7.)

The first letter was sent on September 4, 2015 by Plaintiff’s Counsel (John B. Wallace) to then-nonparty Robert Leppo. Among other things, the letter stated:

“Enclosed is a detailed written and evidentiary package which documents the Activities of the Perpetrators. You are financing the Activities according to recent sworn testimony of Clark Baker. We therefore believe that you are civilly liable for our client’s damages, especially damages suffered after receipt of this package. If you are aware of any facts which you think we should know, please advise me. At this point forward, there should be no question on the issue of your notice of the Activities and that your funding of Perpetrators is causing our client continuing damages.

“If you believe that any of the statements above are not true, please feel free to inform us in writing of any facts, and/or provide us with any evidence, to support your position. Absent information from you which shows our understanding to be materially in error, it is our intention to promptly file a civil lawsuit for damages against you.”

The second letter was sent on October 15, 2015 by then-nonparty D. David Steele on behalf of Robert Leppo back to Plaintiff’s Counsel Wallace. Among other things, the letter stated:

“[The statement that Robert Leppo is financing the Activities according to recent sworn testimony of Clark Baker] is a false and unsupported statement. Please send us the excerpt of sworn testimony upon which you rely. A more accurate statement would be that Mr. Leppo previously made lawful donations to the Office of Medical & Scientific Justice, Inc. (“OMSJ”), which we understand is a tax-exempt nonprofit organization in the United States, founded under Section 501(c) of the United States Internal Revenue Code (26 U.S.C. § 501(c).)

“We have no idea if your client has been damaged, or if so, what the damages are. We understand that your client has sued Clark Baker for damages, and that the case is still pending. Regardless, even if your client has been damaged, none of Mr. Leppo’s acts were tortious, or a substantial factor in causing any such damages to your client.

“[O]ur client has not authorized Mr. Baker to make any statement about your client, or ratified any statement made by Mr. Baker about your client at any time.”

“Your claim that Mr. Leppo’s contributions to OMSJ ‘may not be charitable donations’ is vague, unsupported by any facts, and has not a thing to do with your client.”

“Mr. Leppo did not authorize or condone Mr. Baker to make any allegedly defamatory statements about Mr. Murtagh in any forum, and did not ratify such statements at any time.”

The third letter was another letter by then-nonparty Steele to Counsel Wallace, sent on January 29, 2016. Among other things, the letter stated:

“[N]one of this drama has a solitary thing to do with Clark Baker, Bob Leppo, or myself.”

“I provided legal advice to Baker and OMSJ on several [cases related to certain criminal defendants being charged with criminal battery for having consensual sex without disclosing their HIV status], and formed an attorney-client privilege with OMSJ and Baker.

“I have no information whatsoever about these claims. I have no experience in Trademark law, and, to be honest, am not very facile on the internet. I do not know why Baker and Pardo allegedly created the website ‘jamesmurtaghmd.com’ or when they did. I can only surmise that it was one of several mutual escalations between them and your client. My understanding is that Mr. Leppo has no information about these claims as well.

“Your premise is correct (that neither myself nor Mr. Leppo has any personal or professional relationship with your client), but your conclusion is absurd. Neither I, nor my client have spent countless hours and millions of dollars to fund a campaign against him.

“My patience with you and Mr. Wallace of the Rosen firm will soon run out, if you keep pursuing this frivolous course of action.

“My first suggestion is that you simply withdraw the two defective subpoenas and move on to greener pastures. If you insist on re-issuing them and properly serving them on me and Mr. Leppo, we will respond by filing a Motion to Quash in the United States District Court, Northern District of California, and we will seek Sanctions against you and [Plaintiff].”

In addition, the Amended Declaration of Derek Linke, which is filed in support of Plaintiff’s Response, sheds some light on the true actions of Defendants Leppo and Steele. Specifically, Exhibits 6, 7 and 9 show Defendants Baker, Leppo, and Steele engaging in email communications from April 2013 to October 2014 that discuss Plaintiff, lawsuits by and against him, and Defendant Leppo’s direct financial contributions to OMSJ. (Amend. Decl. Linke, Exs. 6, 7, 9.)

Plaintiff argues: (1) that the letters “included a number of statements that [Plaintiff] later discovered were false and designed to deceive [Plaintiff] and his counsel”; (2) that Defendants Leppo and Steele were “unquestionably aware of the true facts about their respective actual involvement with [Defendants] Baker and OMSJ”; (3) that Defendants Leppo’s and Steele’s misrepresentations “were clearly intended to be acted upon”; (4) that Plaintiff was “unaware of the true facts about [Defendants] Leppo and Steele’s direct, personal involvement with Baker and OMSJ, including their attacks on [Plaintiff] via websites and the various lawsuits and other legal actions [Defendant] Steele supported [Defendant] Baker in pursuing”; and (5) that Plaintiff “relief on [Defendants] Leppo’s and Steele’s conduct to his detriment.” (Plaintiff’s Response, pp. 3:28, 4:1, 13:20–21, 13:23–24, 14:2–4, 14:9.)

Defendant Leppo counter-argues: (1) that Plaintiff did not allege any direct statements by Defendant Leppo; (2) that Defendant Steele’s alleged statements in the letters are “insufficient to establish estoppel because they did not ‘lull’ Plaintiff ‘into a false sense of security resulting in inaction’ with regard to the time limitations under Sections 583.210 and 583.310”; and (3) that “[t]he doctrine as applied requires a showing of statements of conduct specifically relating to the calculation or computation of the time limitations under Sections 583.210 and 583.310.” (Leppo Reply, pp. 2:24–25, 2:25–28, 5: 2–4.)

Defendant Steele also makes multiple arguments in his Reply: (1) that Plaintiff’s citations concern cases involving a violation of the five-year rule rather than the three-year rule; (2) that Plaintiff’s citation to Brookview, supra, at 514, is to an example when the court did not overturn a motion to dismiss on the doctrine of equitable estoppel; (3) that the evidence cited by Plaintiff does not discuss the timing or service of any complaint; (4) that Plaintiff had a duty to act with reasonable diligence; (5) that Plaintiff provides no evidence or plausible explanation of how he was lulled into a false sense of security; and (6) that the old legal maxim “he who seeks equity must do equity” applies to this dispute. (Steele Reply, pp. 7:24–25, 8:4–5, 8:24, 9:4–9, 9:10–12, 10:1, citing Taliaferro v. Collasso (1956) 139 Cal.App.2d 903, 906.)

For equitable estoppel to be applied, “the party asserting estoppel was unaware of the facts and relied on the other party’s conduct to its detriment.” (Gaines, supra, at 1097–98, italics added.) The reliance must be “reasonable” for a successful invocation of the doctrine. (Tejada v. Blas (1987) 196 Cal.App.3d 1335, 1341.)

Given the details listed in the letter dated September 4, 2015, Plaintiff was clearly aware of Defendant Leppo’s actions prior to that date. (Murtagh Decl., Ex. A.) On January 21, 2016, Plaintiff sent another letter to Defendant Steele detailing “Leppo’s and Steele’s actual involvement with Baker and OMSJ.” (Opposition, p. 5:17–18; Murtagh Decl., Ex. C.) The fact that Defendants Leppo and Steele denied these allegations did not negate Plaintiff’s awareness of the facts.

It is not clear to what extent Plaintiff actually relied on Defendant Steele’s representations in determining not to sue Defendants Leppo and Steele until the date of the Fourth Amended Complaint. To the extent that Plaintiff did rely upon these representations, the Court finds such reliance to be unreasonable. (Boutwell v. Kaiser Found. Health Plan (1988) 206 Cal.App.3d 1371, 1375.) Defendants rarely admit the charges against them in response to a demand letter. Yet instead of suing Defendants Leppo and Steele, initiating discovery and taking their depositions, it appears that Plaintiff sat on his hands for years regarding these Defendants. “[F]or purposes of computing the three years in which the plaintiff must serve the defendant, failure to discover relevant facts or evidence is not a cause beyond the plaintiff’s control.” (Higgins v. Superior Court (2017) 15 Cal.App.5th 973, 982 [cleaned up]; Code Civ. Proc., § 583.240, subd. (d).)

Plaintiff’s citations to case law are inapposite to the case at hand. (See Opposition, p.13:23 – p. 14:23.) In Griffis, counsel made false representations to the Court concerning the calculation of the five-year rule and opposing counsel relied upon those representations. (Griffis v. S. S. Kresge Co. (1984) 150 Cal.App.3d 491, 499–500.) That is not the case here, where Plaintiff alleges that defense counsel made false representations to him in response to a demand letter. Nor does Tejada help Plaintiff. In Tejeda, the Court of Appeal did not find equitable estoppel and affirmed the trial court’s dismissal of the action under Code of Civil Procedure section 583.310. (Tejada, supra, at 1335.)

“In order to successfully assert equitable estoppel, there must be conduct by defendants that lulls the plaintiff into a false sense of security resulting in inaction and reasonable reliance by the plaintiff.” (Boutwell v. Kaiser Foundation Health Plan (1988) 206 Cal.App.3d 1371, 1375.) Any reliance upon defendant’s counsel’s response to a demand letter was simply not reasonable.

To find impose equitable estoppel in this situation would be to eviscerate Code of Civil Procedure sections 583.210 and 583.310. Plaintiff was clearly aware of the facts and at best unreasonably relied upon Defendant Steele’s assertions.

The Court finds that Plaintiff has not met his burden in establishing the elements of equitable estoppel as to either Defendant Leppo or Defendant Steele. Neither are equitably estopped from moving for dismissal based on Code of Civil Procedure section 583.210, et seq.

Based on the allegation of alter ego, the Court finds that Defendant Leppo has been properly served with the Fourth Amended Complaint within the statutory timeframe listed in Code of Civil Procedure section 583.210, et seq. Thus, the Court will not dismiss Defendant Leppo from the 4AC on these grounds.

However, there is no allegation of alter ego as to Defendant Steele, and the Court finds that Defendant Steele was not properly served with the Fourth Amended Complaint within the statutory timeframe listed in Code of Civil Procedure section 583.210, et seq. Moreover, Defendants are not equitably estopped from bringing up this defense.

The Court DENIES Defendant Leppo’s Motion to Dismiss and GRANTS Defendant Steele’s Motion to Dismiss on the grounds of Code of Civil Procedure section 583.210, et seq.

IV. Motions to Dismiss Pursuant to Code of Civil Procedure Section 583.210, et seq.

“An action shall be brought to trial within five years after the action is commenced against the defendant.” (Code Civ. Proc., § 583.310.)

“In computing the time within which an action must be brought to trial pursuant to this article, there shall be excluded the time during which any of the following conditions existed:

“An action shall be dismissed by the court on its own motion or on motion of the defendant, after notice to the parties, if the action is not brought to trial within the time prescribed in this article.” (Code Civ. Proc., § 583.360, subd. (a).)

“The requirements of this article are mandatory and are not subject to extension, excuse, or exception except as expressly provided by statute.” (Code Civ. Proc., § 583.360, subd. (b).)

“The critical factor in applying these exceptions to a given factual situation is whether the plaintiff exercised ‘reasonable diligence’ in prosecuting his or her case. To establish reasonable diligence, the plaintiff must be able to demonstrate diligence in pursuit of his or her duty to expediate the resolution of the case at all stages of the proceedings. Central to this duty is the specific duty to use every reasonable effort to bring the matter to trial within the five-year period.” (Tejada v. Blas, 196 Cal.App.3d 1335, 1340, citations omitted.)

“Indeed, the diligence required of a litigant increases as the five-year deadline approaches. It is then that the greatest diligence is required.” (Wilshire Bundy Corp. v. Auerbach (1991) 228 Cal.App.3d 1280, 1287, citation omitted.)

The second of Defendant Leppo’s two primary arguments is that Code of Civil Procedure section 583.310 requires mandatory dismissal of the entire action. Specifically, Defendant Leppo argues: (1) that Plaintiff failed to bring this action against Defendant Leppo to trial within five years from when this action was commenced against him in 2014; (2) that dismissal under section 583.310 is mandatory and there is no basis for tolling as to Defendant Leppo; and (3) that the entire action should be dismissed as to all Defendants under section 583.310. (Leppo Motion to Dismiss, pp. 13:1–3, 13:12–15, 13:16–17, 14:1–13, 14:15–16, 15:1–14.)

The second of Defendant Steele’s three primary arguments is the same as that of Defendant Leppo: that Code of Civil Procedure section 583.310 requires mandatory dismissal of this action against Defendant Steele. (Steele Motion to Dismiss, pp. 12–15.)

Plaintiff requests that the Court deny both Motions to Dismiss. (Plaintiff’s Response, p. 17:24–25.) Plaintiff makes the exact same arguments regarding section 583.310 that he made to section 583.210: (1) that Defendants Leppo and Steele should be estopped from obtaining dismissal as the result of their deceptive conduct and statements; (2) that dismissal is improper where, as is the case here, newly added defendants are alleged to be alter egos of a defendant named in the earlier complaint; and (3) that dismissal is also improper where an amended complaint adds a new cause of action based on operative facts different than those underlying the original complaint. (Id. at pp. 13:1–2, 14:24–25, 16:3–4.)

Defendant Leppo also makes the same arguments in Reply. (Leppo Reply, pp. 2:10–18, 2:19, 3:15–19, 5:2–10, 6:1, 7:9–15, 7:16–17, 8:6–24.)

Defendant Steele mostly makes the same arguments in Reply, although any differences have already been discussed in the section above regarding the Motions to Dismiss pursuant to Code of Civil Procedure section 583.210.

Just as with section 583.210, the Court considers whether Code of Civil Procedure section 583.310 is implicated here. If so, the Court will consider whether any of Plaintiff’s arguments are correct.

Defendants argue that this case must be dismissed because more than five years have passed since the filing of the original Complaint. Defendants further argue that the bankruptcy stays were lifted in 2016 and that more than five years have passed since the lifting of those stays, which is further reason this case should be dismissed. (Leppo Motion to Dismiss, pp. 7:21–28, 14:22–26, 15:1–8; Steele Motion to Dismiss, pp. 2:4–11, 12:6–15, 12:17–20, 14:2–11.)

Plaintiff does not dispute that more than five years have passed since the filing of the original Complaint. In addition, Plaintiff has not argued that the time was extended by stipulation or oral agreement in court. (Code Civ. Proc., § 583.330, subds. (a)–(b).) Nor has Plaintiff argued: (1) that the jurisdiction of the Court to try the action was suspended; (2) that prosecution or trial of the action was stayed or enjoined; or (3) that brining the action to trial, for any other reason, was impossible, impracticable, or futile. (Code Civ. Proc., § 583.340, subds. (a)–(c).)

Pursuant to the statute, the Court considers the following timeline in determining how much time should be excluded in assessing the time that has passed:

· On February 18, 2015, Plaintiff filed his Third Amended Complaint in this matter.

· On June 29, 2015, Defendant Baker filed a Chapter 7 Voluntary Petition. (Leppo Request for Judicial Notice, Ex. E, p. 1.)

· On June 29, 2015, Defendant OMSJ filed a Chapter 7 Voluntary Petition. (Leppo Request for Judicial Notice, Ex. F, p. 1.)

· On March 15, 2016, the Bankruptcy Court closed Defendant OMSJ’s case and entered a no discharge. (Leppo Request for Judicial Notice, Ex. F, pp. 1, 6 (“Since it appears that no further matters are required that this case remain open, or that the jurisdiction of this Court continue, it is ordered that the Trustee is discharged, bond is exonerated, and the case is closed.”).)

· On June 21, 2016, the Bankruptcy Court closed Defendant Baker’s bankruptcy case and entered a discharge. (Leppo Request for Judicial Notice, Ex. E, pp. 1, 17.)

· On January 31, 2017, only in the bankruptcy case against Defendant Baker, Plaintiff filed Memorandum of Points and Authorities for Monetary Sanctions Against Defendant Baker and/or B. Cohen. (Leppo Request for Judicial Notice, Ex. E, p. 17.)

· On March 24, 2021, Plaintiff deposed Defendant Steele in the bankruptcy case against Defendant Baker.

· On June 211,2021, Plaintiff deposed Defendant Leppo in the bankruptcy case against Defendant Baker.

· On June 27, 2022, the docket in the bankruptcy case against Defendant Baker shows that a hearing was held on June 21, 2022 regarding Plaintiff’s Motion for Sanctions/Disgorgement Against Baruch C. Cohen, Esq. and D. David Steele, Esq.

· On August 10, 2022, Plaintiff filed his Fourth Amended Complaint in this matter.

Plaintiff has not argued that there was a stay at any point between the filing of the original Complaint and the beginning of the bankruptcy proceedings. Nor has Plaintiff argued that there was a stay at any point after the bankruptcy proceedings concluded in March 2016. More importantly, Plaintiff has not even argued that there was a complete stay during or after the bankruptcy proceedings, which is a point that Defendants persuasively argue. (See Cross v. Cooper (2011) 197 Cal.App.4th 357, fn. 2 (“Generally, however, the automatic stay of judicial proceedings against a debtor in bankruptcy does not apply to nondebtor codefendants.”); see also Bruns v. E-Commerce Exch., Inc. (2011) 51 Cal.4th 717, 730 (“We conclude subdivision (b) of section 583.340 governs only complete stays that are ‘used to stop the prosecution of the action altogether.’ [Citation omitted.]”); see also Gaines, supra, at 1087 (“A complete stay will operate to automatically toll the five-year period. A partial stay will not do so unless it results in a circumstance of impossibility, impracticability, or futility.”).)

The Court finds that there has not been a complete stay in place in this case since at least June 21, 2016. Thus, unless “an extension, excuse, or exception as expressly provided by statute” applies, this action “shall be dismissed by the court” because the action has not been brought to trial within the time prescribed by statute. (Code Civ. Proc., § 583.360.)

The Court notes that Plaintiff’s argument for alter ego of Defendants is only an argument that affects mandatory dismissal pursuant to Code of Civil Procedure section 583.210 (for failure to serve within three years), not section 583.310 (for failure to bring the case to trial within five years). (Hennessey’s Tavern, supra, at 137, listing the issues in that case as those involving section 583.210.)

The reasoning for this is straightforward. If an original defendant was originally served in the case, it comports with section 583.210 to allow the alter ego to also be served, even if after three years of the original complaint in a case. This is because the alter ego was already served. But if five years have passed since the filing of the original complaint, it does not comport with section 583.310 to allow a plaintiff more time to prosecute the case against the original defendant than would otherwise be allowed simply by later serving the alter ego.

There is no support in the law for an alter ego theory extending the five-year window to prosecute the case or considering the action as re-started based upon an amended complaint. The Court finds that there is no basis for relief here.

Unlike with alter ego, case law is clear that the relation-back doctrine discussed above (see supra, §III(B)(3)), also applies to Code of Civil Procedure section 583.310. (See Brumley, supra at 320 (“We agree with plaintiff that the reasoning of Barrington requires us to apply the relation-back doctrine in the context of section 583.310.”).)

Just as with the prior discussion on relation back, the Court agrees with Plaintiff. Defendants Leppo and Steele have moved the Court to dismiss the entire action as to all Defendants based upon the failure to bring this matter to trial within five years. Absent a defense that would preclude dismissal, the Court will at this time only dismiss with prejudice this matter as to Defendants Leppo and Steele. (Code Civ. Proc., § 583.310.) The Court finds that this relief would not only be appropriate but is statutorily mandated. (Code Civ. Proc., § 583.360.) In addition, the Court will issue an order for Plaintiff to show cause as to why this matter should not also be dismissed with prejudice as to Defendants Baker and OMSJ.

Just as with the relation back doctrine, and unlike with the alter ego doctrine, case law is clear that the equitable estoppel doctrine discussed above also applies to Code of Civil Procedure section 583.310. (See Tejada, supra, at 1341 (“The doctrine of equitable estoppel is applicable to section 583.310 dismissal motions. If a trial court finds statements or conduct by a defendant which lulls the plaintiff into a false sense of security resulting in inaction, and there is reasonable reliance, estoppel must be available to prevent defendant from profiting from his deception.”).)

The Court found above that Defendants Leppo and Steele were not equitably estopped from asserting dismissal under Code of Civil Procedure section 583.210. In the context of Code of Civil Procedure section 583.310, the Court similarly finds that none of the Defendants are equitably estopped from asserting dismissal under Code of Civil Procedure section 583.310.

The reasoning is straightforward. Plaintiff has actually been litigating this case. (Amend. Decl. Linke, Exs. 1–11.) Plaintiff’s actions are documented in the docket of this case. (See, for example, Status Reports filed December 14, 2017, September 5, 2018, March 5, 2019, October 2, 2019, February 19, 2020, June 25, 2020, November 12, 2020, August 17, 2021, February 2, 2022, and March 17, 2022.)

The original Complaint was filed in this matter on November 15, 2013. The date of this hearing is November 29, 2022. That is more than nine years of litigation. Plaintiff has not even requested a trial date and no such trial date currently set. It is clear that Plaintiff has not exercised reasonable diligence in prosecuting this case or in using every reasonable effort to bring the matter to trial within the five-year period. (Tejada, supra, at 1340.)

The Court finds that none of the Defendants are equitably estopped from asserting dismissal under Code of Civil Procedure section 583.310.

More than five years have passed since the beginning of this litigation, with no defenses or exceptions to justify it.

The Court DISMISSES with prejudice this matter as to Defendants Leppo and Steele.

The Court sets an OSC why this matter should not also be dismissed with prejudice as to Defendants Baker and OMSJ. The OSC will be held on December __, 2023.

Any party, within the time allowed to respond to a pleading, may serve and file a notice of motion to strike the whole or any part thereof. (Code Civ. Proc., § 435(b)(1)). The notice of motion to strike a portion of a pleading shall quote in full the portions sought to be stricken except where the motion is to strike an entire paragraph, cause of action, count or defense. (California Rules of Court Rule 3.1322.)¿

The grounds for a motion to strike shall appear on the face of the challenged pleading or form any matter of which the court is required to take judicial notice. (Code Civ. Proc., § 437(a)). The court then may strike out any irrelevant, false, or improper matter inserted in any pleading and strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Code Civ. Proc., § 436.) When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend. (Perlman v. Municipal Court (1979) 99 Cal.App.3d 568, 575.)¿

Defendant Steele makes a third argument that the cause of action for conspiracy should be stricken.

In the previous section of this Order, the Court dismissed this matter pursuant to Code of Civil Procedure section 583.310, et seq. As the Court has already dismissed this matter, the Court does not reach Defendant Steele’s request for relief and it is denied as moot.