2010-00087740-CU-CD

George F. Bell vs. Beck Properties, Inc.

Nature of Proceeding: Motion for Monetary Sanctions

Filed By: Schoenfeld, D. Michael

Doe Defendant Alleghany Properties LLC’s Motion for Monetary Sanctions Pursuant to
C.C.P., sec. 128.7 is DENIED.

Defendant Allegany asserts that the plaintiff’s failure to serve its summons and
complaint, within three years of the filing of the original complaint, requires that the
action be dismissed. Despite demand to plaintiffs to do so, plaintiffs’ counsel has failed to dismiss in Alleghany in violation of Code of Civil Procedure section 128.7(b).

Here, although it appears that plaintiff’s counsel failed to timely serve its summons and
complaint; the Court cannot find a violation of section 128.7, nor award sanctions
because the safe harbor provisions of Code of Civil Procedure section 128.7 were not
complied with.

Sanctions under section 128.7 are not designed to be punitive in nature but rather to
promote compliance with the statutory standards. Code of Civil Procedure section
128.7(c) (1) requires that: “Notice of motion shall be served as provided in Section
1010, but shall not be filed with or presented to the court unless, within 21 days after
service of the motion, or any other period as the court may prescribe, the challenged
paper, claim, defense, contention, allegation, or denial is not withdrawn or
appropriately corrected.”

By specifically requiring service of the “motion” and “notice of motion,” the Legislature
made clear that the papers to be served on the opposing party are the same papers
which are to be filed with the court no less than [21] days later. A party may not bring
a motion for sanctions unless there is some action the offending party may take to
withdraw the improper pleading. Hart v. Avetoom (2002) 95 Cal. App. 4th 410, 414-
415. “Close” is good enough in horseshoes and hand grenades, but not in the context
of the sanctions statute. Id.

Here, counsel for defendant served a letter on April 16, 2014, followed on April 28,
2014, by a Notice of Intent to File Motion (omitting any noticed hearing date, any
memorandum of points and authorities or declarations in support) on plaintiff’s
counsel, requesting that the plaintiffs dismiss their complaint. (Schoenfeld Dec., para.
7, Exh. D.)

Satisfaction of section 128.7’s requirement that notices of motion “shall be served as
provided in Section 1010.” is compulsory, not permissive. Where the notice failed to
specify when the motion would be made, it is fatally defective, even if a later notice of
the correct hearing date is served. Galleria Plus, Inc. v. Hanmi Bank (2009) 179 Cal.
App. 4th 535, 538.

The motion itself was served 21 days prior to filing with the Court, by electronic mail on
April 28, 2014, and filed on May 20, 2014. However, C.C.P., sec. 1010.6(a) (4)
provides for an extension after service by electronic means by two court days. The
Notice therefore is also insufficient for failure to comply with the “safe harbor” notice
provisions of the statute.

The Court will not address the merits of the motion, as it fails on procedural grounds.

The minute order is effective immediately. No formal order pursuant to CRC Rule
3.1312 or further notice is required.

Item 4 2010-00087740-CU-CD

George F. Bell vs. Beck Properties, Inc.

Nature of Proceeding: Motion to Dismiss

Filed By: Schoenfeld, D. Michael Specially Appearing Doe Defendant Alleghany Properties LLC’s Motion to Dismiss
Plaintiffs’ Complaint for Failure to Serve Summons and Complaint within Three Years
is GRANTED. C.C.P., secs. 418.10. 583.210(a) and 583.250.

C.C.P., sec. 583.210 requires that: (a) The summons and complaint shall be served
upon a defendant within three years after the action is commenced against the
defendant. For the purpose of this subdivision, an action is commenced at the time the
complaint is filed. (b) Proof of service of the summons shall be filed within 60 days
after the time the summons and complaint must be served upon a defendant.

Code Civ Proc § 583.250 provides that If service is not made in an action within the
time prescribed in this article: (1) The action shall not be further prosecuted and no
further proceedings shall be held in the action. (2) The action shall be dismissed by
the court on its own motion or on motion of any person interested in the action,
whether named as a party or not, after notice to the parties. (b) The requirements of
this article are mandatory and are not subject to extension, excuse, or exception
except as expressly provided by statute.

Plaintiffs filed their initial complaint on Sept. 10, 2010 in this construction defect action.
Plaintiffs had up to three years to serve all defendants, including fictitiously named
defendants, or until Sept. 10, 2013 but has failed to do so. Plaintiffs served moving
party Alleghany on March 3, 2014, three years and five months after filing the initial
complaint.

Plaintiffs filed their First Amended Complaint on Jan. 11, 2011, adding additional
plaintiffs. Plaintiffs filed their Second Amended Complaint on Sept. 13, 2013 clarifying
the construction defects. On Feb. 27, 2014, Plaintiff filed Doe Amendment to
substitute Defendant Alleghany for Doe 44. On March 3, 2014, plaintiff finally served
process on defendant Alleghany.

On March 4, 2014, without notice to Alleghany, and before it had filed its first
appearance, plaintiff filed a motion for leave of court to file a Third Amended Complaint
(“TAC”), to add common law theories of liability against Alleghany and another
defendant, as it was not a homebuilder, subject to Civil Code, sec. 895, et seq. The
unopposed motion was granted and the Third Amended Complaint was filed on March
19, 2014.

In plaintiff’s moving papers requesting leave to file the TAC, the plaintiffs admitted that
the TAC grows out of the same general set of facts set forth in the original complaint,
and that the causes of action were added as against Alleghany. At that time, trial was
calendared for April 7, 2014, less than one month away.

Since more than three years has passed since the filing of the complaint, without
service of process, defendant moves under C.C.P., sec. 583.250 to dismiss the action
for failure to prosecute.

The language of Code Civ. Proc. § 583.210 is mandatory: “The summons and
complaint shall be served upon a defendant within three years after the action is
commenced against the defendant. For the purpose of this subdivision, an action is
commenced at the time the complaint is filed.”
Plaintiffs cannot rely on their amended complaints to re-start the computation of time
for purposes of CCP § 583.210(a) because California courts have made clear that
where a defendant named in an amended complaint was originally sued under a
fictitious name, the three-year period for purposes of CCP § 583.210(a) begins to run
from the date that the original complaint was filed if the amended complaint relates to
the same set of operative facts. See Nelson v. A.H. Robbins Co., 149 Cal.App.3d 862
(1983); Barrington v. A.H. Robins Co., 39 Cal.3d 146 (1985); Lesko v. Superior Court,
(1982) 127 Cal.App.3d 476, 481-485.

Although plaintiffs assert that Alleghany is a new party, the plaintiffs’ Substitution of
Alleghany for Doe Defendant 44, filed Feb. 27, 2014, reflects to the contrary.

Plaintiffs now assert that their representation to the Court in its moving papers on the
motion to amend that the TAC grows out of the same “general set of facts set forth in
the original complaint” was a “mistake”. They further contend that the other parties
“stipulated” to the amended pleading, but as that motion to amend was not served on
Alleghany, it certainly did not stipulate. Had the plaintiff acknowledged that the facts
were different and did not relate back to the initial filing of the complaint, the outcome
of the motion to amend on the eve of trial might have been different.

Judicial estoppel prevents a party from asserting a position in a legal proceeding that
is contrary to a position previously taken in the same or some earlier proceeding.
Jogani v. Jogani (2006) 141 Cal.App.4th 158, 169. The doctrine most appropriately
applies when (1) the same party has taken two positions; (2) the positions were taken
in judicial or quasi-judicial administrative proceedings; (3) the party was successful in
asserting the first position (i.e., the tribunal adopted the position or accepted it as true);
(4) the two positions are totally inconsistent; and (5) the first position was not taken as
a result of ignorance, fraud, or mistake. Id.

Here, each of those factors has been shown. The Court cannot permit plaintiffs to take
inconsistent positions, as it is convenient and assists its strategy.

The motion to dismiss for failure to timely serve Alleghany is granted.

Defendant shall submit a formal order of dismissal.