Judge Teresa A. Beaudet, Case 22STCV32406 2023-03-10 Tentative Ruling

On October 4, 2022, Plaintiff Timothy H Dupler, in pro per (“Plaintiff”) filed this action against Defendants Ron Reitshtein and Youngman Reitshtein, PLC. The Complaint asserts causes of action for (1) professional negligence, (2) breach of fiduciary duty, (3) intentional misrepresentation, and (4) negligent misrepresentation.

Defendants Ron Reitshtein (“Reitshtein”) and Youngman Reitshtein, Professional Law Corporation (the “Law Corporation”) (jointly, “Defendants”) now demur to each of the causes of action of the Complaint. Defendants also move to strike portions of the Complaint. Plaintiff opposes the demurrer. No opposition to the motion to strike was filed.

The Court grants Defendants’ request for judicial notice. The Court notes that it takes judicial notice of the existence of the Exhibits attached to Defendant’s request for judicial notice, but not to the truth of the matters stated therein.

The Court denies Plaintiff’s request that the Court “accept Judicial Notice of the fact Defendant failed in his duty as counsel and is liable for all direct interest and damages stated in the Judicial record which continue to accrue at the rate of 10% to Plaintiff until paid along with diminution in value to the residence caused by the Levy along with numerous other losses that can be proven in Court.” (Opp’n at p. 11:2-5.)

In the Complaint, Plaintiff alleges that he was the petitioner in a divorce action filed in “Torrance Superior Court Family Law section under Case number: YD068909” (the “Dissolution Action”). (Compl., ¶ 8.) The respondent in the Dissolution Action filed a civil suit “in Torrance Superior Court YC7072678” in response to the Dissolution Action, and obtained a default judgment against Plaintiff. (Compl., ¶¶ 8, 9.) Plaintiff contracted the services of Reitshtein. (Compl., ¶ 8.)

Plaintiff alleges that “Reitshtein properly filed a Motion to Set Aside the Default Judgement and Join an improperly filed Civil Case: YC072678 case to the YD068909 Family Law Case. However…Mr Reitshtein failed to take the next step of filing the Motion to Set Aside/Joinder Motion in the Family Law Court. This, according to the Court, caused the Set Aside to lapse and the Default on the Civil case to take effect meaning all damages claimed in the Civil case were from that point forward, legally liable and collectible damages against Petitioner/Plaintiff.” (Compl., ¶ 9.)

Plaintiff alleges that Reitshtein failed to notify Plaintiff of the default. (Compl., ¶ 10.) Plaintiff further alleges that Reitshtein “took little to no affirmative action on Plaintiff’s behalf, and instead, allowed him to be subjected to endless discovery with no active Discovery on his part. This resulted in Plaintiff being required to pay far more in Alimony and Child support, taxes, maintenance, repairs… to Plaintiff’s property even though he was not the party in possession.” (Compl., ¶ 12.) Plaintiff also alleges that he had a separate property asset seized in the amount of $250,000.00 which Reitshtein stated he could not contest, but the court ultimately concluded that the asset was Plaintiff’s separate property and should not have been taken. (Compl., ¶ 13.)

Defendants asserts that “Plaintiff’s first (professional negligence), second (breach of fiduciary duty), and third (negligent misrepresentation)[1] causes of action all are barred by the one-year statute of limitations set forth in Code of Civil Procedure section 340.6.” (Demurrer at p. 8:8-10.)

“An action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services shall be commenced within one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the facts constituting the wrongful act or omission, or four years from the date of the wrongful act or omission, whichever occurs first…Except for a claim for which the plaintiff is required to establish the plaintiff’s factual innocence, the time for commencement of legal action shall not exceed four years except that the period shall be tolled during the time that any of the following exist:

(2) The attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred.

(3) The attorney willfully conceals the facts constituting the wrongful act or omission when those facts are known to the attorney, except that this subdivision shall toll only the four-year limitation.

(4) The plaintiff is under a legal or physical disability that restricts the plaintiff’s ability to commence legal action.

(5) A dispute between the lawyer and client concerning fees, costs, or both is pending resolution under Article 13 (commencing with Section 6200) of Chapter 4 of Division 3 of the Business and Professions Code. As used in this paragraph, ‘pending’ means from the date a request for arbitration is filed until 30 days after receipt of notice of the award of the arbitrators, or receipt of notice that the arbitration is otherwise terminated, whichever occurs first.”

Defendants note that “the one-year limitations period of section 340.6 is triggered by the client’s discovery of the facts constituting the wrongful act or omission, not by his discovery that such facts constitute professional negligence, i.e., by discovery that a particular legal theory is applicable based on the known facts.” ((Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP (2005) 133 Cal.App.4th 658, 685 [internal quotations omitted].) The Peregrine Court found that “[t]he investors’ claims against Sheppard are untimely because they had sufficient knowledge, or access to knowledge, to put them on notice in 2001 that Sheppard had done something wrong to them…The test is whether the plaintiff has information of circumstances sufficient to put a reasonable person on inquiry, or has the opportunity to obtain knowledge from sources open to his or her investigation…” ((Ibid. [internal quotations and citations omitted].)

Defendants assert that Plaintiff was put on inquiry notice of the alleged malpractice more than one year prior to the filing of this action.

Defendants note that Plaintiff alleges that “Reitshtein properly filed a Motion to Set Aside the Default Judgement and Join…[the] Civil Case: YC072678…to the YD068909 Family Law Case. However…Reitshtein failed to take the next step of filing the Motion to Set Aside/Joinder Motion in the Family Law Court.” (Compl., ¶ 9.)

Defendants argue that “Plaintiff was on notice of the alleged ‘failure’ to actually set aside the Default Judgment by no later than December 31, 2019, when his ex-wife’s counsel filed her Amended Trial Brief which stated the Default Judgment had not been set aside and was continuing to accrue interest. In addition, in June 2020, Plaintiff’s ex-wife sought and obtained writs of possession and execution based on the Default Judgment. Plaintiff was on notice of these documents – and thus was on inquiry notice of his asserted claims against Defendants – at the time of their filing. These documents were a matter of public record, available to Plaintiff and/or any counsel he had at the time. Accordingly, these court filings were sufficient – as a matter of law – to put Plaintiff on notice that ‘he was wronged’ with respect to the adequacy (or alleged lack thereof) regarding Defendants’ representation.” (Demurrer at p. 15:13-22.)[2]

As an initial matter, the Court notes that the above statute of limitations argument solely addresses Plaintiff’s claim that “Reitshtein failed to take the next step of filing the Motion to Set Aside/Joinder Motion in the Family Law Court.” (Compl., ¶ 9.) However, Plaintiff alleges additional wrongdoing in addition to the alleged failure to set aside a default judgment against Plaintiff.

In the first cause of action for professional negligence, Plaintiff also alleges that “Defendants…undertook the representation of plaintiff to obtain file an answer on his behalf and defend him in the civil lawsuit in relation to the Case No. YC072678,” and that “defendants negligently failed to timely file a timely denial prior to the deadline provided by California Code of Civil Procedure.” (Compl., ¶¶ 20-21.) Plaintiff also alleges in the first cause of action that “the failure to file for death benefits as set forth above was negligent…” (Compl., ¶ 25.) In support of the second cause of action for breach of fiduciary duty, Plaintiff alleges that “defendants breached their fiduciary obligations to plaintiff in numerous respects, including failing in the duty to file an Answer, and subsequently fail to file a timely Motion to Set Aside Default Judgement.” (Compl., ¶ 28.) The Court notes that “a demurrer cannot rightfully be sustained to part of a cause of action or to a particular type of damage or remedy.¿” (¿Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1047¿; ¿see also PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1682 [“A demurrer does not lie to a portion of a cause of action.”]¿.)

In the fourth cause of action for negligent misrepresentation, Plaintiff alleges that “Defendants represented to Plaintiff that the Motion to Set Aside Default has been filed, default was removed, and the two cases were consolidated,” but that “Defendants representation was not true.” (Compl., ¶¶ 41-42.) As set forth above, Defendants’ argument is that “Plaintiff was on notice of the alleged ‘failure’ to actually set aside the Default Judgment by no later than December 31, 2019, when his ex-wife’s counsel filed her Amended Trial Brief which stated the Default Judgment had not been set aside[3] and was continuing to accrue interest. In addition, in June 2020, Plaintiff’s ex-wife sought and obtained writs of possession and execution based on the Default Judgment… these court filings were sufficient…to put Plaintiff on notice that ‘he was wronged’ with respect to the adequacy (or alleged lack thereof) regarding Defendants’ representation.” (Demurrer at p. 15:13-22.) But Plaintiff’s fourth cause of action for negligent misrepresentation alleges that “Defendants represented to Plaintiff that the Motion to Set Aside Default has been filed, default was removed, and the two cases were consolidated,” and that “Defendants representation was not true.” (Compl., ¶¶ 41-42.) Defendants argue that Plaintiff was put on notice by the above-referenced court filings of Defendants’ alleged failure to set aside the default judgment, not that Defendants allegedly misrepresented to Plaintiff that a motion to set aside default judgment had been filed.

Based on the foregoing, the Court overrules the demurrer to the first, second, and fourth causes of action.

Defendants also assert that the third cause of action for intentional misrepresentation is subject to demurrer. In support of the third cause of action, Plaintiff alleges that “Defendants represented to Plaintiff that Defendants were going to file an answer on his behalf, subsequently file a Motion to Set Aside Default, and let [sic] Plaintiff to believe that the default was set aside.” (Compl., ¶ 32.) Plaintiff alleges that “Defendants representation was false.” (Compl., ¶ 34.)

Defendants note that “[t]he elements of fraud that will give rise to a tort action for deceit are: (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or scienter); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” ((Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974 [internal quotations omitted].)

Defendants note that “[t]he requirement of specificity in a fraud action against a corporation requires the plaintiff to allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” ((Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.) As to the Law Corporation, the Court agrees with Defendants that Plaintiff fails to clearly allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, and when the alleged representations were said or written.

Defendants also assert that Plaintiff fails to allege with specificity how he “reasonably relied” on the alleged misrepresentations or how he sustained any damage as a result of this supposed reliance. The Court agrees with Defendants that the third cause of action does not plead these elements with sufficient specificity. As Defendants note, “fraud must be specifically pleaded. This means: (1) general pleading of the legal conclusion of fraud is insufficient; and (2) every element of the cause of action for fraud must be alleged in full, factually and specifically, and the policy of liberal construction of pleading will not usually be invoked to sustain a pleading that is defective in any material respect.” ((Wilhelm v. Pray, Price, Williams & Russell (1986) 186 Cal.App.3d 1324, 1331.)

In the opposition, Plaintiff appears to concede that the third cause of action is deficient. (See Opp’n at p. 4:12-14, “Opposition to Defendant’s Claim to Plaintiff’s Third Cause of Action failing to State a Claim…Plaintiff stands by his statement as it is factually correct and does not at this time, wish to amend his Second Cause of Action, although agrees with Defendant that Plaintiff should be more concise.”)

Based on the foregoing, the Court sustains Defendants’ demurrer to the third cause of action.

A court may strike any “irrelevant, false, or improper matter inserted in any pleading” or any part of a 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.) “The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.” (Code Civ. Proc., § 437.)

Defendants move to strike Plaintiff’s punitive damages allegations. More specifically, Defendants move to strike the allegations that “[h]owever; if the Court determines at Trial that Mr Reitshtein deliberately and Fraudulently mislead Plaintiff into believing that services were properly provided believing that the Statute of Limitations for filing a Legal Malpractice would lapse, Plaintiff requests the Punitive damages of Three (3) x damages or $10,050,000.00.” (Compl., ¶ 17.) Defendants also move to strike the allegation that “Defendants’ willful failure to advise plaintiff about the true state of affairs to cover up their negligence, demonstrated a conscious disregard for plaintiff’s rights and, given the fiduciary relationship between plaintiff and defendants, is so egregious as to warrant the imposition of emotional distress and punitive damages.” (Compl., ¶ 30.) Lastly, Defendants move to strike the request in paragraph 3 of the prayer for relief “[f]or imposition of punitive damages…” (Compl., p. 6:14.)

A motion to strike may lie where the facts alleged do not rise to¿the level of “malice,¿oppression¿or fraud” required to support a punitive damages award. ((See Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 63-64.)¿“‘Malice’ means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” ((Civ. Code, § 3294, subd. (c)(1).) “‘Oppression’ means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Civ. Code, § 3294, subd. (c)(2).) “‘Fraud’ means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.” (Civ. Code, § 3294, subd. (c)(3).)

Defendants assert that Plaintiff failed to allege specific facts showing Defendants acted with malice, oppression, or fraud against Plaintiff within the meaning of Civil Code section 3294. Plaintiff does not oppose the motion to strike and thus does not argue to the contrary. ((See DuPont Merck Pharmaceutical Co. v. Superior Court (2000) 78 Cal.App.4th 562, 566, “[t]he anti-SLAPP statute provides that the phrase…‘act in furtherance of a person’s right of petition or free speech under the United States or California Constitution in connection with a public issue’ includes: (1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law…Defendant’s lobbying and other activities seeking to influence the decisions of regulatory and legislative bodies fall within this definition. By failing to argue the contrary, plaintiffs concede this issue.” [emphasis added].)

Based on the foregoing, the Court overrules Defendants’ demurrer to the first, second, and fourth causes of action. The Court sustains Defendants’ demurrer to the third cause of action, with leave to amend.

The Court grants Defendants’ motion to strike in its entirety, with leave to amend.

The Court orders Plaintiff to file and serve an amended complaint, if any, within 20 days of the date of this Order. If no amended complaint is filed within 20 days of this Order, Defendants are ordered to file and serve their answer within 30 days of the date of this Order.¿

[1]The Court notes that the fourth cause of action is for negligent misrepresentation and the third cause of action is for intentional misrepresentation.

[2]Defendants’ request for judicial includes Exhibit 10, “Respondents’ Amended Trial Brief, filed on December 31, 2019 in the Dissolution Action,” Exhibit 11, an “Application for Issuance of Writ of Execution, Possession or Sale, filed on June 5, 2020 in the Dissolution Action,” and Exhibit 12, a “Writ of Execution and Sale of Real Property, issued on June 9, 2020 in the Dissolution Action.” (Defendants’ RJN, ¶¶ 10-12, Exs. 10-12.)

[3]The Court notes that the December 31, 2019 Amended Trial Brief does not appear to expressly state that a default judgment against Plaintiff had not been set aside. Rather, it provides, inter alia, that “[a] default judgment was obtained against him for $404,500.00 principal and $224,303.56, a total of $628,803.56 as of December 16, 2019, and will continue to accrue interest of the daily rate of $110.82. No part of the default judgment has been paid by Petitioner.” (Defendants’ RJN, ¶ 10, Ex. 10, p. 9.)

Superior Court of California

County of Los Angeles

Department 50