Judge: Teresa A. Beaudet, Case: 21STCV41765, Date: 2023-02-16 Tentative Ruling

Case Number: 21STCV41765    Hearing Date: February 16, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Plaintiff California Franchise Tax Board (“Plaintiff”) filed this action on November 12, 2021 against Defendants Amarjit Sahani, Rajinder Sahani, Gurpreet Sahani, and Shaheen Sahani (collectively, “Defendants”). The Complaint asserts causes of action for (1) unjust enrichment/restitution, (2) constructive trust, (3) equitable lien, and (4) equitable indemnity.

The trial date in this action is currently set for May 10, 2023.     

Plaintiff now moves for an order continuing the trial date and all related dates and deadlines in this case (including the discovery cutoff), for a period of not less than 150 days.

No opposition to the motion was filed.

            Discussion

“The court may grant a continuance only on an affirmative showing of good cause requiring the continuance.” (Cal. Rules of Court, rule 3.1332, subd. (c).) “In ruling on a motion or application for continuance, the court must consider all the facts and circumstances that are relevant to the determination.” (Cal. Rules of Court, rule 3.1332, subd. (d).)

Plaintiff asserts that good cause exists here to continue the trial date for a number of reasons.

Plaintiff indicates that on October 20, 2022, Plaintiff served Defendants with requests for production (the “RFPs”). (Keith Decl., ¶ 3.) After requesting and obtaining an extension from Plaintiff, Defendants served their responses on December 5, 2022. (Ibid.) The responses indicated that that documents would be produced in response to several of the RFPs (the “Promised Documents”), and defense counsel’s transmitting email stated that a document production “will be forthcoming.” (Keith Decl., ¶ 4.) Plaintiff indicates that Defendants have still not produced the Promised Documents or provided a date certain by which they will do so (despite Plaintiff’s request). (Keith Decl., ¶ 6.) Plaintiff notes that circumstances that may indicate good cause for a trial continuance include “[a] party’s excused inability to obtain essential testimony, documents, or other material evidence despite diligent efforts.” (Cal. Rules of Court, Rule 3.1332, subd. (c)(6).)

Plaintiff indicates that it has decided to defer noticing and taking Defendants’ depositions, as well as potentially propounding additional written discovery, to after it has received and had the opportunity to review the Promised Documents. (Keith Decl. ¶ 7.) Plaintiff asserts that such follow-up discovery would be less meaningful and productive if Plaintiff had to conduct it without the benefit of having received and reviewed Defendants’ documents.
            Plaintiff also asserts that developments in certain bankruptcy proceedings against Defendants will probably make additional material evidence available to Plaintiff before the discovery cutoff in this action if the cutoff date is continued. More specifically, Plaintiff indicates that the “Adversary Proceeding” was one of a number of related adversary proceedings filed in the Debtor’s bankruptcy case by the Official Committee of Unsecured Creditors of the Debtor (the Committee) against Defendants (the “Insiders Adversary”) and against Plaintiff and other tax agencies, who, like Plaintiff, were alleged to have received fraudulent transfers of corporate funds of the Debtor (a pass-through entity for tax purposes) in payment of Defendants’ personal income taxes. (Keith Decl., ¶ 8.)

            Plaintiff indicates that recently, the Bankruptcy Court has entered orders in the Insiders Adversary upholding various third-party subpoenas served by the plaintiff in the Insiders Adversary, seeking documents from the Debtor’s former accountants, attorneys, and financial institutions. (Keith Decl., ¶ 10.) Plaintiff indicates that it expects that in the coming months, it should be able to obtain the third parties’ productions by subpoena to the Debtor’s estate representatives and/or the third parties themselves; and that if the current discovery cutoff in this action is continued, Plaintiff should be able to review the third parties’ documents and use them in conducting Defendants’ depositions and any other follow-up discovery. (Keith Decl., ¶ 14.) Plaintiff notes that circumstances that may indicate good cause for a trial continuance also include “[a] significant, unanticipated change in the status of the case as a result of which the case is not ready for trial.” (Cal. Rules of Court, rule 3.1332, subd. (c)(7).) 

            Lastly, Plaintiff asserts that the facts and circumstances in this case support a trial continuance under California Rules of Court, rule 3.1332, subdivision (d). (See Mot. at pp. 9:20- 10:15.)

            Based on the foregoing, and in light of the lack of any opposition, the Court finds that Plaintiff has demonstrated good cause for a trial continuance.

Conclusion

Based on the foregoing, Plaintiff’s motion is granted.

The Court continues the date to lodge the trial readiness and exhibit binders to October 6, 2023 by 4 p.m. in Dept. 50, the final status conference to October 13, 2023 at 10:00 a.m., in Dept. 50 and trial to October 25, 2023 at 1:30 p.m., in Dept. 50.

All discovery deadlines are continued based on the new trial date.

Plaintiff is ordered to give notice of this ruling.

 DATED:  February 16, 2023                                                

________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court