Judge Shirley K. Watkins, Case 20VECV01264 2023-01-17 Tentative Ruling

If ALL parties submit on the tentative, then no appearance is necessary unless some other matter (i.e., Case Management Conference) is on calendar. It is not necessary to call the court to request oral argument. Oral argument is permitted on all tentative rulings.

[TENTATIVE] ORDER: Plaintiff Shant Aram Dashjian’s Motion for Leave to Amend the First Amended Verified Complaint is GRANTED and it shall be separately efiled and served within 10 days.

Plaintiff Shant Aram Dashjian (Plaintiff) moved for leave to amend the First Amended Complaint (FAC) filed against Defendants Steve Kessedjian, individually and as Trustee of The 4847 La Montana Circle, Tarzana CA 91356 Family Trust et al. (Defendants.)

Defendants argued that the Motion was untimely filed and served. The Motion was filed and served on December 21, 2022, via electronic service. Proper notice required 16 court days plus two days for electronic service. (Code Civ. Proc. secs. 1005(b) & 1010.6(4)(b).) The deadline for timely filing and service was December 19, 2022. The filing and service of the Motion was untimely. Despite untimely service, Defendants opposed the Motion on its merits. Because Defendants addressed the merits of the Motion, there was a lack of prejudice against Defendants due to the loss of two days of notice. The Court exercised its discretion and reviewed the Motion on its merits.

The Court notes that Defendants’ Opposition was required to be served by January 3, 2023. Defendants filed and served their Opposition four court days untimely, on January 9, 2023. Despite untimely filing and service, the Court reviewed the Opposition on its merits.

Plaintiff’s Reply was due on January 9, 2023 – the day the Opposition was due. The Reply was not filed.

Defendants argued that Plaintiff failed to completely comply with California Rules of Court, Rule 3.1324. Plaintiff’s failure to comply was part of the Court’s reason to deny Plaintiff’s prior motion for leave to amend heard on December 9, 2022. Plaintiff attempted to cure the defect but the changes identified in the motion are not consistent with the actual changes made in the Proposed Second Amended Complaint (PSAC.) (Motion Exh. 3.) On this defect, there is grounds to again deny the motion. However, the Court exercised its discretion and reviewed the substance of the motion.

Defendants argued that Plaintiff lacked standing because the alleged $90,000 debt (Loan 2) is argued to be held by Plaintiff’s brother, Hariton Dashjian (Hariton[1].) Courts generally do not consider the validity of proposed amendments to a pleading. (Kittredge Sports Co. v. Superior Court (Marker, U.S.A.) (1989) 213 Cal.App.3d 1045, 1047; Atkinson v. Elk Corp. (2006) 109 Cal.App.4th 739, 760.) However, the Court noted that the provisions of Loan 2 showed that the holder of the Note is a person named, “Hartoun Dashjian.” (PSAC par. 15, Exh. B.) Plaintiff alleged that “Hartoun” is his alias. (PSAC par. 14.) Plaintiff alleged that Hariton’s connection to the money is that the funds came from an escrow account held by Plaintiff and Hariton. (PSAC par. 12.) Plaintiff further alleged that Plaintiff paid his brother $45,000.00 for his portion of the Note. (PSAC pars. 16-17.) These allegations are sufficient to show Plaintiff’s standing as to Loan 2 since the Court does not consider the validity of the proposed amendments. Plaintiff sufficiently alleged facts to show that Hariton no longer has any interest in Defendant’s debt under Loan 2. Defendants’ standing argument is not persuasive.

Defendants argued that the action is time-barred by the statute of limitations (SOL.) The PSAC, as did the First Amended Complaint (FAC,) alleged: 1) intentional misrepresentation, 2) cancellation of instrument, 3) slander of title, 4) quiet title, 5) negligence, and 6) monies had and received. The only statutory citations made by Defendants to support the SOL argument is the four-year SOL to argue against the quiet title claim (i.e., the fourth COA) (Code Civ. Proc. sec. 337) and the three-year SOL to argue against the fraud claim (i.e., the first COA.) (Code Civ. Proc. sec. 338.) Part of Plaintiff’s claim is grounded on two loans. The first loan was in the amount of $85,000.00 and entered either in 2002 or 2006 (Loan 1.) (FAC par. 10; PSAC pars. 10 & 11.) The second loan was in the amount of $90,000.00 and entered in 2003 or 2006 (Loan 2.) (FAC par. 10; PSAC pars. 12-15.)

Defendants first argued time-bar against the allegations related to Loans 1 & 2 because Plaintiff’s FAC alleged that Defendants stopped paying the monthly interest-only payments and the principal on the two loans in 2009. (FAC par. 10.) Preliminarily, Plaintiff’s only COA strictly based upon these two loans is the sixth COA for monies had and received – a common count. Defendants failed to cite any statute identifying the applicable SOL as to the sixth COA. It is noted that there is no breach of contract COA alleged in the PSAC (or the FAC.)

The facts alleged to support the other COAs are more complex than a simple breach of two promissory notes and the SOL argument against Loans 1 & 2 ignore the other factual allegations. In support of the other COAs, Plaintiff alleged that the parties entered into an oral agreement in 2008 wherein Plaintiff agreed to, essentially, save Defendants’ residence/property from foreclosure instituted by U.S. Bank in exchange for Defendants’ promise to pay Plaintiff’s new mortgage, tax, insurance, and other costs related to the property once Plaintiff purchased the property from U.S. Bank. Plaintiff then alleged that Defendants stopped making payments related to the property without alleging a date as to this breach and/or fraud. (FAC par. 12; PSAC pars. 19-27.) There are insufficient facts to necessarily show that the entire action is time-barred as a matter of law. Defendants’ SOL argument against Loans 1 & 2 only makes a colorable argument as to part of the claims in the FAC and PSAC and is insufficient to show that the action in its entirety is time-barred as a matter of law. The SOL argument against Loans 1 & 2 is unpersuasive to deny Plaintiff leave to file the PSAC.

Defendants’ SOL argument then asserted that the fraud-based claims are time-barred because Plaintiff allegedly discovered the fraud back in 2002 and 2003 when the parties entered into Loans 1 & 2. However, the gravamen of the fraud-based claims (i.e., the first through fifth COAs for intentional misrepresentation, cancellation of instrument, slander of title, quiet title, and negligence) are not based upon Loans 1 & 2 but based upon the oral promise to pay Plaintiff’s new mortgage, taxes, insurance, and other costs related to the property and the fraudulent/forged Trust Transferred Deed (Fraudulent Deed.) (FAC pars. 15-18; PSAC pars. 28-35.) Even if Defendants argued that the SOL expired as to the promise to pay the mortgage, taxes, insurance, and other costs related to the property because Plaintiff should have known of the fraud prior to November 2017 (i.e., three years prior to the filing of this action on November 2, 2020,) the argument would again only address a part of the fraud claim since the argument would not address the fraud claims based upon the Fraudulent Deed, which was allegedly discovered in 2019. (FAC pars. 17-18; PSAC par. 33.) The SOL argument against fraud is unpersuasive to deny an amended complaint.

Defendants then argued that the motion should be denied because of inexcusable delay and extreme prejudice. A court can deny leave to amend after long, inexcusable delay, where there is cognizable prejudice, such as discovery needed, trial delay, critical evidence lost, or added preparation expense. (P & D Consultants, Inc. v. City of Carlsbad (2010) 190 Cal.App.4th 1332, 1345; Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761; Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 487.) The operative pleading in this action is the FAC and was filed on March 9, 2021. The instant motion was filed on December 21, 2022. The gap in time alone may be sufficient to show delay in bringing this motion especially in light of Plaintiff’s own assertion that the amendment is based upon facts that the newly alleged facts were in Plaintiff’s possession/memory or Hariton’s possession and only discovered as a result of investigation stemming from Defendant’s July 2022 discovery demands. The fact that the facts forming the basis of the amendment was in Plaintiff’s possession and Hariton’s possession makes the delay probably inexcusable. However, there must also be prejudice to Defendants. Defendants argued that they would need to restart discovery from the beginning. However, as argued by Plaintiff, there are no new COAs alleged in the PSAC. The gravamen of the action still remains limited to Loans 1 & 2, the agreement to save Defendants from foreclosure, and the Fraudulent Deed, which were all alleged in the FAC. It is undisputed that some new discovery may need to be conducted by Defendant (i.e., as to Plaintiff’s standing on Loan 2.) But the PSAC not adding any new COAs shows that discovery need not be conducted ab initio. The Court does not find that Defendants’ prejudice is sufficient to overcome the liberal policy in permitting amendments.

The motion for leave to file the SAC is GRANTED. SAC shall be separately efiled and served within 10 days.

This order is not intended to be a ruling on whether the statutes of limitation have or have not expired; it is merely a review for purposes of the motion to amend and for no other purpose.

The court does not address whether there should be a continuance of the trial and extension of the discovery cutoff. No request was made. That is a matter that should be discussed between counsel.

[1] Due to the common family name between Plaintiff and his brother, the Court identifies Plaintiff’s brother by his first name. The Court means no disrespect to Hariton Dashjian.