Wertheim v. Super. Ct. CA2/1 ( 2015 )

Filed 6/25/15 Wertheim v. Super. Ct. CA2/1
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
WERTHEIM, LLC, B262513
Petitioner, (Los Angeles County
Super. Ct. No. BC395819)
v.
THE SUPERIOR COURT OF
LOS ANGELES COUNTY,
Respondent;
CURRENCY CORP., et al.,
Real Parties in Interest.
ORIGINAL PROCEEDINGS in mandate. Deirdre Hill, Judge. Petition granted.
Armen Manasserian; The Newell Law Firm, Felton T. Newell for Petitioner.
No appearance for Respondent.
Boren, Osher & Luftman, Jeremy J. Osher for Real Parties in Interest.
_______________________________
This petition is an offshoot of extensive litigation surrounding dozens of small
loans made by Currency Corporation (Currency) to a single borrower, Maibell Page, from
1997 to 2006. When a dispute arose in 2006, Page entered into an agreement with
Wertheim, LLC, the petitioner here, by which she assigned her claims against Currency
to Wertheim. In 2008, Wertheim sued Currency, alleging it had interfered with that 2006
agreement. In 2009 and 2010, Currency filed two successive lawsuits and a cross-
complaint against Wertheim based on the underlying loan transactions. Although the
three lawsuits were not consolidated, the parties litigated them as essentially one dispute,
with the trial court expressly agreeing the 2008 lawsuit would trail the 2009 and 2010
suits. In 2015, the trial court nevertheless dismissed the 2008 lawsuit for Wertheim’s
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failure to bring it to trial within five years. (Code Civ. Proc., § 583.310.)
In these original writ proceedings, Wertheim seeks an order directing the trial
court to vacate its order of dismissal on the ground that the time within which to
prosecute the 2008 action was tolled during lengthy stays of the 2009 and 2010
proceedings. We grant the petition. Although no formal order staying the 2008 lawsuit
action was ever entered, and it was never formally consolidated with either the 2009 or
2010 lawsuits, the trial court continued the 2008 action for years, trailing it after the 2009
and 2010 actions, which are still extant, trial having been set for August 2015. The five-
year period to bring this matter to trial was tolled during this time.
BACKGROUND
Currency, the real party in interest, makes loans to persons who own rights to
royalty income payable by such entities as the Broadcast Music, Inc. and the American
Society of Composers, Authors, and Publishers. The loans are typically secured by the
borrower’s royalty income. One such borrower was Maibell Page, the widow of
accomplished songwriter Eugene Page.
In 2006, a dispute arose between Page and Currency, and Page assigned both her
royalties and her claims against Currency to Wertheim.
1
All statutory references will be to the Code of Civil Procedure.
2
On August 5, 2008, Wertheim sued Currency,2 alleging Currency interfered with
Wertheim’s 2006 agreement with Page. (Los Angeles Superior Court (LASC) case No.
BC395819; the interference or 2008 action.)
In 2009, Currency sued Wertheim, seeking to enjoin a looming arbitration
concerning the Page loans. (LASC case No. BC417798; the injunction or 2009 action.)
The trial court denied the injunction and twice confirmed a $600,000 arbitration award
against Currency, which we twice reversed on appeal. (Currency Corp. v. Wertheim,
May 20, 2011, B222851 [nonpub. opn.]; Currency Corp. v. Wertheim, September 30,
2013, B240444 [nonpub. opn.].) On January 8, 2015, the trial court ultimately entered
judgment in this action against Wertheim and in favor of Currency. Wertheim filed a
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notice of appeal from the judgment, but on June 12, 2015 we dismissed the appeal.
In 2010, Currency sued Wertheim for declaratory relief, alleging it engaged in an
improper attempt to collect on the (now vacated) arbitration award. (LASC case No.
BC441026; the declaratory relief or 2010 action.)
The 2008 and 2010 actions were ordered related, as were the 2009 and 2010
actions. The 2009 action was stayed during pendency of the two appeals referenced
above, and at one point the 2010 action was stayed based on a stay in the 2009 action.4
A June 9, 2011 minute order stated the 2008 action, “Although not stayed, for
continuity purposes, the court continues the case management conference in [the 2008
action]” to October 28, 2011. On November 6, 2012, the trial court stated issues in the
2
Parviz Omidvar is the founder, owner and CEO of Currency Corporation and
Tiffany Ventures, LLC. Omidvar’s two adult sons, Oliver and O’Neil Omidvar,
participate extensively in this business. Several lawsuits related to the Page loans have
been filed by and against one, some or all of Omidvar, Currency, Tiffany, Oliver and
O’Neil. For simplicity, we will refer to any or all of them as “Currency.”
3
We dismissed the appeal on April 15, 2015, but later granted Wertheim’s motion
to vacate the dismissal. On June 12, 2015, we dismissed the appeal a second time.
4
On January 13, 2012, the trial court stated the “[s]tay remains in effect” as to the
2008 action, but this was later corrected to refer to a stay entered the 2010 action, not the
2008 action. It is undisputed the 2008 action was never formally stayed.
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2008 case would “be addressed after declaratory relief issues are resolved in [the 2010
action].” All in all, from December of 2008 to March of 2014, the trial court continued
the case management conference for the 2008 action over two dozen times.
On March 26, 2014, the trial court dismissed the 2010 action.5 At hearing on that
date, when Currency’s counsel evinced an intent to move to dismiss the 2008 action for
failure to prosecute, the court (Hon. Maureen Duffy-Lewis) stated the 2008 action had
always trailed the 2009 action. Judge Duffy-Lewis said, “They have not been failing to
prosecute. The court’s been actively trailing it based on the representations of prior
counsel that, and all prior counsel, that it was best to happen after another case.”
Currency’s counsel responded, “We’ve never made that representation,” to which the
court replied, “If you don’t want to agree to [a] stay, [the 2008 case] currently trails for
trial until what case?” Wertheim’s counsel interjected, “the [2009] case, which is the
main claim.” The court agreed, stating the 2008 action had been stayed “informally” for
purposes of trial, but not for discovery.
Trial in the 2008 action was set for May 4, 2015, with a final status conference set
for April 24, 2015. In July 2014, Currency filed a peremptory challenge to Judge Duffy-
Lewis, and the case was assigned to Judge Deirdre Hill.
On July 17, 2014, Currency moved to dismiss the 2008 action for failure to bring
it to trial within five years. Judge Hill’s tentative ruling was to deny the motion, citing
the remarks of Judge Duffy-Lewis at the March 26, 2014 hearing, and concluding that
Judge Duffy-Lewis had determined there were a series of oral and implicit agreements
between Wertheim’s counsel and Currency’s former counsel to stay the case pending
resolution of the other cases. After two hearings, however, Judge Hill ultimately granted
the motion and dismissed the 2008 action.
5
There are several more actions and cross-complaints among these parties
concerning the Page loans, some of which were consolidated with (and at least one
thereafter severed from) one or more of the three actions listed above, and some of which
have been wholly or partially dismissed. To avoid confusion, we will discuss only the
three main actions, with the understanding that no dismissal of any or all of them will
terminate the parties’ litigation over the loans.
4
Wertheim timely petitioned this court for a writ of mandate, seeking to overturn
the trial court’s order of dismissal and reinstate the 2008 action. We issued an order to
show cause.
DISCUSSION
Preliminarily, real party argues the petition must be dismissed because the format
is improper, the record incomplete, and the verification inadequate. We find the petition
substantially complies with California Court Rules and the record and verification are
adequate. (Cal. Rules of Court, rule 8.486; Humane Society of the U.S. v. Superior Court
(2013) 214 Cal. App. 4th 1233, 1253 [immaterial record deficiencies may be ignored];
Star Motor Imports, Inc. v. Superior Court (1979) 88 Cal. App. 3d 201, 204 [verification
used to join issues rather than as direct evidence of facts may be alleged on “information
and belief”].)
Section 583.310 mandates that an action “be brought to trial within five years after
the action is commenced against the defendant.” Section 583.360, subdivision (a)
provides: “An action shall be dismissed by the court on its own motion or on motion of
the defendant, after notice to the parties, if the action is not brought to trial within the
time prescribed in this article.” The statute serves to “prevent[] prosecution of stale
claims where defendants could be prejudiced by loss of evidence and diminished
memories of witnesses” and “to protect defendants from the annoyance of having
unmeritorious claims against them unresolved for unreasonable periods of time.” (Lewis
v. Superior Court (1985) 175 Cal. App. 3d 366, 375.)
The five-year period begins to run when the action is “commenced against the
defendant” and continues until the action is “brought to trial.” (§ 583.310.)
“‘Commencement’ of an action for purposes of section 583.310 and its predecessor,
former section 583, is firmly established as the date of filing of the initial complaint.”
(Brumley v. FDCC California, Inc. (2007) 156 Cal. App. 4th 312, 318.) In a nonjury trial,
an action is “brought to trial” for purposes of the five-year statute when the first witness
is sworn. In a jury trial, a matter is brought to trial when a jury is impaneled. (Hartman
v. Santamarina (1982) 30 Cal. 3d 762, 765.) It is plaintiff’s duty to exercise reasonable
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diligence to insure a case is brought to trial within statutory time constraints, which
includes the duty to call the attention of the court to the necessity of setting trial for a
time within five years. (Howard v. Thrifty Drug & Discount Stores (1995) 10 Cal. 4th
424, 434; Sanchez v. City of Los Angeles (2003) 109 Cal. App. 4th 1262, 1270.)
The five-year period can be extended by written stipulation or oral agreement
made in open court among the parties. (§ 583.330.) In addition, certain events toll the
five-year statute, such as when the court’s jurisdiction has been suspended, when
prosecution of trial of the action has been stayed or enjoined, and when, for any other
reason, bringing the action to trial is “impossible, impracticable, or futile.” (§ 583.340.)
Generally, impracticability and futility involve “a determination of ‘“excessive and
unreasonable difficulty or expense,”’ in light of all the circumstances of the particular
case.” (Brunzell Constr. Co. v. Wagner (1970) 2 Cal. 3d 545, 554.) The burden is on the
plaintiff to prove that an exclusion applies (Tamburina v. Combined Ins. Co. of America
(2007) 147 Cal. App. 4th 323, 329), and the superior court must make a factual
determination as to whether the plaintiff exercised “reasonable diligence” in overcoming
the obstacles (Howard v. Thrifty Drug & Discount Stores, supra, 10 Cal.4th at p. 438).
The lower court’s ruling on a motion to dismiss is reviewed for abuse of discretion
to the extent it is based on an evaluation of factual matters relating to whether it was
impossible, impracticable, or futile to bring the case to trial. (Bruns v. E-Commerce
Exchange, Inc. (2011) 51 Cal. 4th 717, 731.) “We will not substitute our opinion for that
of the trial court unless a clear case of abuse is shown and unless there is a miscarriage of
justice.” (Mitchell v. Frank R. Howard Memorial Hospital (1992) 6 Cal. App. 4th 1396,
1402.)
The complaint here was filed on August 5, 2008. Wertheim therefore had until
August 5, 2013, to bring the matter to trial. It failed to do so. The action must therefore
be dismissed unless one of the tolling exclusions applies or some other reason exists not
to apply the five-year rule.
Wertheim argues each of the tolling exclusions applies: The trial court’s
jurisdiction over the 2008 action was suspended during appeals in the 2009 action; the
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trial court stayed proceedings in the 2008 action pending resolution of the 2009 and 2010
actions; and it was impossible and impracticable to bring the matter to trial. We need not
reach these issues because it is undisputed the trial court instituted a long de facto stay
pending completion of the 2009 and 2010 actions. The five-year period to bring the
matter to trial was tolled during this stay.
The doctrine of equitable estoppel “applies fully to motions brought under section
583[.410].” (Borglund v. Bombardier, Ltd. (1981) 121 Cal. App. 3d 276, 281; § 583.140
[“Nothing in this chapter abrogates or otherwise affects the principles of waiver and
estoppel”].) In ruling on a motion to dismiss, the trial court must “examine all the acts
and conduct of the parties, and render a discretionary decision with a view to furthering
the ends of justice.” (Tresway Aero, Inc. v. Superior Court (1971) 5 Cal. 3d 431, 440.)
“If a trial court encounters statements or conduct by a defendant which lulls the plaintiff
into a false sense of security resulting in inaction, and there is reasonable reliance,
estoppel must be available to prevent defendant from profiting from his deception.”
(Borglund v. Bombardier, supra, at p. 281.) “By following the rule of Tresway, [the
courts] move away from the rigid application of a few limited exceptions to section
[583.340], and rather adopt a rule that permits substantial justice to triumph over form.”
(Ibid.)
The estoppel doctrine applies not only to the parties’ conduct, but also to trial
court actions. (Moran v. Superior Court (1983) 35 Cal. 3d 229, 241 [five-year period
tolled during trial court’s delay in putting a matter on calendar]; Hartman v.
Santamarina, supra, 30 Cal.3d at p. 768 [“‘the period that the trial is held in abeyance
pending assignment of another judge is to be disregarded in considering a subsequent
motion to dismiss’”]; Nail v. Osterholm (1970) 13 Cal. App. 3d 682, 686 [same]; see
Weeks v. Roberts (1968) 68 Cal. 2d 802 [five-year period tolled during period following
trial court’s erroneous performance of duty].)
It is undisputed that there were arbitrations and appeals in the 2009 and 2010
actions, which tolled the five-year limit as to them. Although there was no formal stay in
this case, No. BC395819, the record shows that respondent court regularly and
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consistently continued it pending resolution of the other matters, Judge Duffy-Lewis
acknowledging the instant case had been stayed informally for purposes of trial, but not
for discovery. On June 9, 2011, the trial court stated the 2008 action would be continued
“for continuity purposes,” and stated on November 6, 2012, that issues raised by the
action would “be addressed after declaratory relief issues are resolved in [the 2010
action].” The court continued the case management conference over two dozen times
between December of 2008 and March of 2014, and stated it would be best to resolve
substantive claims regarding the Page loans before adjudicating whether Currency had
interfered with Page’s assignment of those claims to petitioner. Wertheim was thus lulled
into complacency by the court’s statements and orders, and it was an abuse of discretion
for the court to dismiss the action.
Currency argues evidence existed—the trial court’s docket and the declaration of
its former counsel—that it never agreed to a stay of the 2008 action and in fact there was
no formal stay. The point is immaterial. Even if Currency did not agree to a formal or
informal stay, Judge Duffy-Lewis trailed the matter for six years on the understanding
that adjudication of Page’s underlying claims would precede adjudication of whether
Currency interfered with assignment of the claims.
DISPOSITION
The petition is granted. Let a peremptory writ of mandate issue directing the
superior court to vacate its order dismissing the 2008 action and enter a new order
denying Currency’s motion. Petitioner shall recover its costs on this writ proceeding.
NOT TO BE PUBLISHED.
CHANEY, Acting P. J.
We concur:
JOHNSON, J. BENDIX, J.*
*
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant
to article VI, section 6 of the California Constitution.
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