Judge Peter A. Hernandez, Case Number: 24STCV13785, Date: 2024-08-29 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.

Plaintiff The People of the State of Indiana (“Plaintiff”) alleges as follows:

Fran and Menashi Cohen (“Fran” and “Menashi”) misappropriated property of Plaintiff by illicitly retaining and failing to report money to the State of Indiana that Defendants owed for sales taxes, use taxes, or other taxes. The Defendants misappropriated the Plaintiff’s monies by knowingly falsifying information in tax documents, tax returns, Small Business Administration loan documents, and other documents. The Defendants undercalculated and underpaid the amount due and owing to Plaintiff. The Defendants knowingly or intentionally used the ill-gotten gains to acquire personal and real property including the property located at 623 N Beverly Drive, Beverly Hills, CA 90210 (the “Beverly Hills Property”). Defendants also conducted, supervised, or facilitated transactions involving the proceeds of the ill-gotten gains.

Plaintiff is informed and believes, and thereon alleges that the Defendants used their ill-gotten monies that rightfully belong to Plaintiff to purchase, meet their loan obligations, maintain, and repair the Beverly Hills Property. Therefore, Plaintiffs are entitled to the legal and equitable ownership of the Beverly Hills Property. Plaintiff is informed and believes, and thereon alleges that the Defendants resided in the Beverly Hills Property until 2013. In 2016, the Defendant transferred the Beverly Hills Property to Defendant Quarteroak, LLC (“Quarteroak” and with Fran and Menashi, collectively “Defendants”), a limited liability company in which Fran is the sole member.

On June 3, 2024, Plaintiff filed a complaint, asserting causes of action against Defendants and Does 1-25 for:

"When a court upon motion of a party or its own motion finds that in the interest of substantial justice an action should be heard in a form outside the state, the court shall stay or dismiss the action in whole or in part on any conditions that may be just.” (Code Civ. Proc., § 410.30, subd. (a).) The doctrine of forum non conveniens is “an equitable doctrine invoking the discretionary power of a court to decline to exercise the jurisdiction it has over a transitory cause of action when it believes that the action may be more appropriately and justly tried elsewhere.” (Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 751.) A “court must first determine whether the alternate forum is a ‘suitable’ place for trial.” (Id., at pp. 751-52.) Second, if it is, the court must “consider the private interests of the litigants and the interests of the public in retaining the action for trial in California.” (Id.)

The private interest factors are those that make trial expeditious and relatively inexpensive, including: (1) ease of access to sources of proof; (2) the cost of obtaining attendance of witnesses; and (3) the availability of compulsory process for attendance of unwilling witnesses. (Id.) The public interest factors include more general concerns related to the local community in which the case will be tried, namely: (1) avoidance of overburdening local courts with congested calendars; (2) protecting the interests of potential jurors; and (3) weighing the competing interests of California and the alternate jurisdiction in the litigation. If the court finds that “in the interest of substantial justice” an action filed in California should be adjudicated elsewhere, the court may stay or dismiss the action on such conditions as may be just. (Id.)

Defendants seek to dismiss the case pursuant to section 410.30(a). They argue that the alleged liability in both actions is based on alleged wrongful conduct by Menashi involving state tax documents, state tax returns, and undercalculation and underpayment of taxes purportedly due and owing to the State of Indiana. (See Motion to Dismiss, at pp. 2-3.) Defendants further contend that Plaintiff already chose the appropriate forum for the alleged misconduct that exclusively arose within the State of Indiana and the harm, if any, occurred exclusively within the borders of Indiana. (Id., at p. 3.)

In fact, a review of the Complaint and the specific causes of action suggest that the underlying conduct, i.e. the misrepresentation to the taxing and governmental authorities, is what provides Plaintiff an ability to seek a monetary judgment against Defendants. The Beverly Hill Property is merely a tool to collect a judgment based on the illegal conduct.

Plaintiff contends Defendants have failed to demonstrate that Indiana is a suitable, alternative forum because their claim in their own courts may be barred by a statute of limitations claim. (Opposition, at p. 5 [emphasis added].) In fact, Plaintiff contends, Defendants refused to waive any rights they have to raise a statute of limitations defense in its home court. That, according to Plaintiff, is the reason why Indiana is not a suitable, alternative forum. However, that begs the question why Plaintiff is using a separate court to litigate a matter exclusively in the jurisdiction of its own court. If the statute of limitations is a bar to a potential civil law suit in Indiana, why would it not be one here? Moreover, if it’s not a bar here yet, then why should Plaintiff be entitled to proceed here when Indiana law could apply?[1]

Essentially, this case boils down to Plaintiff’s inability to file a lis pendens to preserve the status quo of the Beverly Hills Property. Moreover, it appears that Plaintiff is attempting to file this lawsuit in order to protect an asset that would be used to enforce a potential judgment. (Opposition, at p. 9.) The court does not intend to be used as a place holder for a litigant to collect on its judgment.

Nevertheless, the court see a more immediate problem. Plaintiff further contends Defendants have provided no evidence. It is correct! Without proper factual contentions placed before the court by the moving party, the court finds Defendants have not met their burden to have the court exercise its discretionary power to dismiss or, at a minimum, stay the action.

[1] The Declaration of Jeffrey N. Brown, filed after the Opposition but before the Reply, reinforces the court’s belief that the Beverly Hills Property is a mere product of the liability but does not form the basis for liability.