12-543779

1. The Defendant Uziel’s Motion for Summary Judgment or in the alternative Summary Adjudication is DENIED because it is based upon the same issues raised in the prior Motion for Summary Judgment or in the Alternative which was denied by this court on November 1, 2013 and is not supported by new facts, circumstances or a change in law.

DEFENDANT IS BARRED FROM RENEWING HIS SUMMARY JUDGMENT BECAUSE HE FAILED TO COMPLY WITH SECTION 437c(f)(2)

1. Section 437c(f)(2) Limits a Party’s Ability to Renew a Motion for Summary Judgment C.C.P. Section 437c(f)(2) states: “A motion for summary adjudication may be made by itself or as an alternative to a motion for summary judgment and shall proceed in all procedural respects as a motion for summary judgment. However, a party may not move for summary judgment based upon issues asserted by a prior motion for summary adjudication and denied by the court, unless that party establishes to the satisfaction of the court, newly discovered facts or circumstances or a change of law supporting the issues reasserted in the summary judgment motion.” [emphasis added]. Code of Civil Procedure section 437c, subdivision (f)(2) states that a party may not move for summary judgment based on issues asserted in a prior motion for summary adjudication. To determine whether a second summary judgment motion is proper, courts consider whether it involves “newly discovered facts or circumstances or a change of law.” ( Schachter v. Citigroup, Inc. (2005) 126 Cal.App.4th 726, 739, 23 Cal.Rptr.3d 920; Bagley v. TRW, Inc. (1999) 73 Cal.App.4th 1092, 1097, 86 Cal.Rptr.2d 909 (Bagley) [second motion showed no new law and listed no new material facts in the separate statement].) Patterson v. Sacramento City Unified School Dist. (2007) 155 Cal.App.4th 821, 827, 66 Cal.Rptr.3d 337, 342.

In Bagley v. TRW, Inc. (1999) 73 Cal.App.4th 1092, 86 Cal.Rptr.2d 909 (Bagley), the trial court had earlier denied the defendant’s motion for summary judgment, summarily adjudicated 27 of the issues in favor of the defendant, and denied the remaining 103 requests for summary adjudication. Later, relying on the same facts and the same law, the defendant made a second motion for summary judgment or, in the alternative, summary adjudication of each of the plaintiff’s seven causes of action. The second motion was heard by a different judge, who granted summary judgment. On appeal, Division One of this District reversed and remanded. The Bagley court held a second summary judgment motion is barred where it offers “no ‘newly discovered facts or circumstances,’ ” does not suggest that “ ‘a change of law’ ” had occurred, and does not request the judge to “make a finding” concerning these statutory requirements. (Id. at pp. 1093, 1096, 86 Cal.Rptr.2d 909.) Schachter v. Citigroup, Inc. (2005) 126 Cal.App.4th 726, 734, 23 Cal.Rptr.3d 920, 924.

A comparison of the arguments and material facts shows that the Defendant’s second motion for summary adjudication is a “reformatted, condensed, and cosmetically repackaged” version of its first motion. Bagley v. TRW, Inc. (1999) 73 Cal. App.4th 1092, 1097, 86 Cal.Rptr.2d 909.
This court denied the Defendant’s prior request for summary adjudication on the grounds that the separate statement was defective. As such, the court chose to treat the motion as a motion for summary judgment. Additionally, the court denied the prior request for summary judgment on the grounds that the Defendant had not sustained his initial burden of production to show that Plaintiff is not entitled to an accounting as a shareholder who requested an accounting but was refused such an accounting. CC Sections 1601(a), 1602.

The Defendant has now brought a second motion for summary judgment or in the alternative adjudication. The Defendant asserts that the prior motion was denied based upon a procedural defect regarding the separate statement and that the court questioned the Defendant’s arguments about the fifth cause of action. The Defendant also asserts that this second motion is now filed with additional facts uncovered in subsequent discovery.

First, the Defendant’s focus on the ruling on the prior motion is misplaced. The consideration as set forth in CCP 437c(f)(2) is whether the prior and subsequent motions are based upon the same issues not whether the court’s rulings were based upon the same issue. With respect to this absolute requirement, the Defendant has not even attempted to provide the court with an explanation regarding what new or different issues are raised within this subsequent motion. The Opposition clearly raises and argues the CCP 437c(f)(2) issue and sets forth authority to support denial of the motion on this basis alone. Nevertheless, the Reply brief is wholly silent on the matter. Second, the Defendant has not identified, in his motion or reply brief, what new facts he is referring to. Again, this is particularly interesting since, the Opposition directly challenges the Defendant’s assertion.

From a review of the prior motion and this motion, it is quite clear that the issues raised in that motion and this one are the same. In both motions, the Defendant set forth the allegations from the First Amended Complaint and then attempts to dispute each of them as inaccurate. In both motions, the Defendant in challenging the first cause of action for breach of fiduciary duty argues that the Plaintiffs had no evidence that the Defendants had breached any duty or fiduciary duty or that such breach caused any injury or damage to Plaintiff arguing that allegations that Uziel used DC money for his own expenses depleting DC’s revenue stream and putting it in financial trouble.

With respect to the second cause of action for breach of fiduciary duty, the Defendant argued in both the first and second motions that there is no evidence that the Defendant breached any duty which causes injury or damage to Plaintiff. The Defendant argued in both motions that the Plaintiff alleged that Uziel used DC money for his own expenses depleting DC’s revenue stream and putting it in financial trouble. In both motions the Defendant argued that the second cause is insufficient because Plaintiff has not established that such occurred.

Regarding the third cause of action for conversion, the Defendant argues in both motions that no asset was converted and no damages resulted from the alleged conversion. In both motions, the Defendant argued that the fourth cause for conspiracy to convert fails because the conspiracy cause of action is insufficient.

The fifth cause for an accounting is challenged with the same issues in both the prior motion and this motion. The Defendant argued in both motions that the Plaintiff has always had the books and records of DC so there is no need for an accounting and no right to an accounting because the other causes like conversation and breach of fiduciary duty have no merit.

As such, it is clear that the issues raised in both motions are the same.

In addition, it appears that the facts, circumstances and law are the same in both motions. Moreover, the Defendant has done nothing to assist the court or the responding party in identifying the new facts, circumstances or law if they are there somewhere. With respect to the motion as a whole and each of the causes challenged, it is possible that the Defendant has thrown in an extra fact or two but it is impossible to tell given the manner in which the motion is presented. The facts are all lumped together rather than being put under distinct categories or theories. The vast majority of the facts are the same in both motions. As such, the court DENIES the motion for failure to comply with CCP 437c(f)(2).

On the merits, if the court could find that the motion does not violate CCP 437c(f)(2), the court still denies the motion because the Defendant has not sustained his initial burden of production showing a lack of a material issue on an element of the Plaintiff’s causes of action or a complete defense. The Defendant argues that entire complaint and each cause of action are insufficient because the Plaintiff is not entitled to recover on any particular cause of action because he cannot establish any injury or damage to DC Partners, Inc. He also argues that the Plaintiff cannot establish that he lost money or property or was damages in any manner. In support of such argument, the Defendant contends that the alleged improper expenses which form the basis for each of the causes of action were not unauthorized but were in fact authorized by Mr. Raj and Mr. Uziel, himself and that there has been no injury to DC because there is no money missing from DC’s accounts and no reduction in the value of DC which is and has always been solvent. These arguments or facts, even if true, do not establish that the Plaintiff’s allegations lack merit. The Plaintiff alleges that the Defendant improperly charged personal expenses to DC. As such, the injury alleged is obviously the expenses charged to DC which were not DC expenses. The damage to DC is the money it would have had if it had not paid expenses which were for the Mr. Uziel or Mr. Raj’s personal matter rather than for DC. That is the damages. DC did not have to have diminished value or missing money from its bank account to suffer injury and damages.

2. The Cross Defendant DC Partner Inc.’s Motion for Summary Adjudication is DENIED because it is based upon the same issues raised in the prior Motion for Summary Judgment or in the Alternative which was denied by this court on November 1, 2013 and is not supported by new facts, circumstances or a change in law.

CROSS DEFENDANTS ARE BARRED FROM RENEWING THEIR SUMMARY JUDGMENT BECAUSE THEY FAILED TO COMPLY WITH SECTION 437c(f)(2)

1. Section 437c(f)(2) Limits a Party’s Ability to Renew a Motion for Summary Judgment

The Cross Defendant does not even mention the prior motion for summary judgment/adjudication of issues in its moving papers much less establish that there are new facts, circumstances or a change in the law such as to allow this second motion for summary adjudication to be heard. The failure to comply with CCP Section 437c(f)(2) is raised in the Cross Defendant’s Opposition and then addressed by the Cross Complainant in its Reply. The reply is completely off base. The Cross Complainant argues that the present motion is proper since the court never ruled on the merits of the prior motion. The rule provided by CCP Section 437c(f)(2) and authorities interpreting it is that a “a party may not move for summary judgment based upon issues asserted by a prior motion for summary adjudication and denied by the court, unless that party establishes to the satisfaction of the court, newly discovered facts or circumstances or a change of law supporting the issues reasserted in the summary judgment motion.[emphasis added] CCP Section 437c(f)(2).

The issues raised in this motion are the exact same issues that were raised in the prior motion. The language is almost identical in the two motions. The only difference is that the ninth cause is no longer pled. This change in the pleadings does not create “new circumstances” within the meaning of section 437c(f)(2). Schachter v. Citigroup, Inc. (2005) 126 Cal.App.4th 726, 738, 23 Cal.Rptr.3d 920, 928.

Both the Original and the Current Motion make the following identical arguments:

“It is undisputed that directors and officers owe their company fiduciary duties of care and loyalty, which compel them to act in good faith, with care of a prudent person and in the best interest of the corporation and refrain from self- dealing, or usurp corporate opportunities or funds. Corp Code Section 308.

Cross Defendants admit to operating AGE and generating revenues by producing the same products and services as DC at time when Cross Defendant concealed the fact that he was at the same time director at DC and most openly by representing to “his customers” that DC “knows” or
approves” his conduct [Undisputed Fact # 24] making his breach of duties of loyalty and care to DC fraudulent and malicious repeating violations of Labor laws 2863 and 2860. Gnessin diverted revenues from DC to his own alter ego organization AGE.”[Original Motion Page 6 and Current Motion Page 5]

The Summary of Argument sections in both motions concludes with the following two paragraphs. The paragraphs are identical in both the prior motion and this motion.

“Mr. Jason Engel a licensed CPA, Accredited in Business Valuation (ABV), a Certified Valuation Analyst (CVA), a Certified Forensic Financial Analyst (CFFA), a Certified Fraud Examiner (CFE), and a Certified Insolvency and Restructuring Advisor (CIRA) examined the books and records that Cross Defendant produced and concluded that the verified funds that Cross Defendants usurped are at least $800,000. [Und. Fact #46].

Adding insult to DC injury, Mr. Engel verified that at least $35000 were embezzled by Cross Defendant by abusing his authority as an officer to approve his own business expense reimbursement and claim through payroll expenses (allegedly on behalf of DC) for his fraudulent activities at AGE including property that was shipped to Gnessin Residence and never arrived at DC.” [Original Motion Page 6 and Current Motion Page 6]

It is abundantly clear that a comparison of the arguments and material facts shows that the Cross Complainant’s second motion for summary adjudication is a “reformatted, condensed, and cosmetically repackaged” version of its first motion. Bagley v. TRW, Inc. (1999) 73 Cal. App. 4th 1092, 1097, 86 Cal.Rptr.2d 909. As such, the Cross Complainant did not present new facts, circumstances or law.

The Cross Defendant has not established or even attempted to establish to the satisfaction of this court that there are new facts, circumstances or a change of law supported the issues in this reasserted summary adjudication motion. The motion does not address the defect at all despite the fact that the filing party was clearly aware of the prior motion since, they cut and pasted the current motion from it. The reply simply dismisses the defect without attempting to comply by providing any new facts, circumstances or law. Therefore, the court finds that the motion is barred because it fails to comply with CP Section 437c(f)(2).

3. Plaintiff’s motion for sanctions under CCP Section 128.5 against Yehoram Uziel in the amount of $5,465.00 is DENIED.

The Plaintiff seeks sanctions against the Defendant for filing a frivolous and bad faith motion for summary adjudication. The Plaintiff seeks sanctions under CCP Section 128.5. Unfortunately, that statute is not applicable. The Plaintiff had to file under 128.7.

In cases commenced prior to 1995, the judge could order a party or counsel, or both, to pay the reasonable expenses, including attorney fees, incurred by the other party “as a result of bad-faith actions or tactics that are frivolous or solely intended to cause unnecessary delay.” [CCP Section 128.5(a)] Section 128.5 does not apply to any form of litigation misconduct in lawsuits filed after 1994. General litigation conduct sanctions are available, if at all, only under CCP Section 128.7 [Olmstead v. Arthur J. Gallagher & Co. (2004) 32 C4th 804, 807, 11 CR3d 298, 301] The Plaintiff brought the motion under the wrong statute. The Plaintiff has not established that he complied with the requirements of 128.7. Therefore, the motion is denied.