Judge: William D. Claster, Case: 19-01115265, Date: 2022-10-14 Tentative Ruling
1. Defendants Thomas
Wylde, LLC's and Jene Park's Notice of Demurrer and Demurrer to Plaintiffs'
First Amended Complaint ROA 439
2. Status Conference
Defendants Thomas Wylde, LLC (“TW”) and Jene Park move to dismiss the first amended complaint (FAC) of Plaintiffs PDTW, LLC (“PDTW”) and Paula Thomas. In the alternative, Defendants demur to the 20th cause of action in the FAC (the sole cause of action remaining against them) on the grounds that it is uncertain and fails to state facts sufficient to constitute a cause of action. For the reasons set forth below, the motion to dismiss is DENIED, the previous dismissal of Jene Park is confirmed, and the demurrer is SUSTAINED WITH LEAVE TO AMEND on grounds of uncertainty.
Both sides’ requests for judicial notice are GRANTED.
I. Procedural Background
The Court assumes the parties’ familiarity with the general factual background of this motion, which has been discussed at length in rulings from both this Court and the Court of Appeal.
Procedurally, Plaintiffs (then represented by attorney Dimitrios Biller) filed their original complaint in December 2019. All defendants named in the complaint demurred. The Court sustained all the demurrers in an order dated July 28, 2020. The Court denied leave to amend for many defendants and dismissed them with prejudice. Defendant Jene Park was one of the parties in this group. Plaintiffs appealed those dismissals.
For some defendants, including TW, the Court granted leave to amend by August 10, 2020. Plaintiffs, still represented by Biller, filed their FAC a week late, on August 17. In addition to being untimely, the FAC failed to comply with other procedural requirements imposed by the Court. The remaining defendants, except TW, demurred to the FAC. In an order dated October 9, 2020, the Court sustained these demurrers without leave to amend. Plaintiffs appealed these dismissals as well.
On January 20, 2021—after all other defendants had been dismissed with prejudice and Plaintiffs had filed appeals—TW and Park filed the present motion to dismiss and the demurrer. Shortly thereafter, Judge Nakamura (to whom the case had been reassigned) stayed all proceedings pending resolution of the appeals. The Court of Appeal affirmed the dismissals in two unpublished opinions filed on May 31, 2022.
Meanwhile, in related litigation in Los Angeles County Superior Court, disputes arose between Plaintiffs and their attorney, Biller. On February 16, 2022, the Los Angeles court ordered Biller’s representation of Plaintiffs in the related litigation terminated. Plaintiffs retained attorney Stephen Silverman, who now represents them in this matter. After Biller refused to return Plaintiffs’ client files, Plaintiffs moved the Los Angeles court for an order compelling their return. This motion was granted on July 5, 2022. (Pls.’ RJN, Ex. C.)
The next day, this Court lifted the stay and reset the hearing on TW and Park’s motion to dismiss and demurrer.
II. Status of Jene Park
Although Park has demurred to the FAC, there was no reason for her to do so inasmuch as on July 28, 2020 the Court sustained without leave to amend the demurrer to all claims brought against her. The present demurrer focuses on the 20th cause of action, a claim not brought against Park in either the original complaint or the FAC. Belatedly recognizing this, Park’s attorney acknowledges that the present demurrer on Park’s behalf was brought “inadvertently.” (Reply p. 4)
The Court agrees that the July 28, 2020 ruling on the demurrer to the complaint disposed of all claims against Park. Accordingly, her dismissal from this action is confirmed notwithstanding the below ruling on the present demurrer.
III. Motion to Dismiss
As noted above, Plaintiffs, then represented by Biller, filed their FAC a week later than the Court-ordered deadline and without following other procedural requirements imposed by the Court. TW asks the Court to dismiss the case under CCP § 581(f)(2). “But section 581, subdivision (f)(2), places the decision within the Court’s discretion.” (Harlan v. Department of Transportation (2005) 132 Cal.App.4th 868, 874.) The Court exercises its discretion to consider the untimely, noncompliant version of the FAC. TW has squarely addressed the FAC by demurrer, so it will not be prejudiced by the Court considering it.
In any event, a motion to dismiss under CCP § 581(f)(2) is an improper vehicle to challenge a late-filed amended pleading. “Unless properly challenged, however, an amended pleading filed after the time allowed still prevents default or dismissal. The opposing party’s remedy is to file a noticed motion for an order striking the untimely amended pleading.” (Weil, et al., Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2022) ¶ 7:138.5 [emphasis original].)
IV. Demurrer
TW demurs on grounds of uncertainty and failure to state facts sufficient to constitute a cause of action. Because the FAC is uncertain on the sole remaining cause of action, the Court sustains the demurrer on this ground without deciding whether Plaintiffs have adequately pled a cause of action.
The Court recognizes that demurrers for uncertainty are disfavored. (See Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.) Nevertheless, in the context of this case, the 20th cause of action is uncertain. As originally pled, this fraud claim centered on allegedly false discovery responses regarding insurance policies provided by TW and Park (through their counsel, Schnider) in related litigation. Plaintiffs alleged that Thomas settled the related litigation based on these false responses and was damaged thereby. Then, at the hearing on the original demurrer, Plaintiffs (through then-counsel Biller) argued a new theory of fraud: the claim was based not on false discovery responses about insurance, but the failure to provide Thomas with insurance policies that would cover her alleged losses. Given the confusion on this point, the Court sustained the demurrer on uncertainty grounds with leave to amend. The Court also sustained Schnider’s demurrer to this claim with leave to amend.
Plaintiffs, through Biller, then filed the present FAC. The FAC added three paragraphs to the 20th cause of action that referenced the non-litigation refusal to produce certain property and insurance policies allegedly belonging to Thomas and/or PDTW. Schnider demurred, arguing the new allegations were insufficient to address the problems previously identified by the Court. In opposition to Schnider’s demurrer, Plaintiffs identified a third theory of fraud, this time involving the fraudulent concealment of non-party Stephen Choi’s involvement in the underlying events. As noted above, the Court sustained Schnider’s demurrer without leave to amend, and the Court of Appeal affirmed.
At this point, the Court is unsure what theory of fraud Plaintiffs, now represented by Silverman, intend to rely upon. Their opposition papers argue the theory actually set forth in the FAC is adequately pled, but their prior opposition to Schnider’s demurrer to the FAC suggests this isn’t the operative theory of fraud anymore. Given the confusion resulting from the shifting arguments presented by prior counsel, the Court finds the 20th cause of action is too uncertain to withstand demurrer.
V. Leave to Amend
California has a strong policy favoring amendment. The Court sympathizes with TW’s arguments about the continuing uncertainty of Plaintiffs’ 20th cause of action even after amendment. But in the context of this case, where Plaintiffs were forced to seek relief from the Los Angeles Superior Court simply to discharge their prior counsel, and prior counsel then refused to return their files for months despite having been fired by court order, the Court believes Plaintiffs and their new counsel should be given an opportunity to replead the 20th cause of action.
To that end, Plaintiffs are granted leave to amend solely to replead the 20th cause of action, along with only those facts necessary to provide context for the claim. Assuming Plaintiffs believe it is worthwhile to pursue this litigation in light of both this Court’s and the Court of Appeal previous rulings, the second amended complaint should be redrafted to include only this cause of action and essential background facts. Previously dismissed causes of action and non-relevant background allegations must be eliminated. Plaintiffs shall have until October 24, 2022 to file a second amended complaint.