Hector Ozuna v. Alpha Factors, et al.		CASE NO. 111CV206813
DATE: 25 September 2014	TIME: 9:00	LINE NUMBER: 3

This matter will be heard by the Honorable Judge Socrates Peter Manoukian in Department 19 in the Old Courthouse, 2nd Floor, 161 North First Street, San Jose.  Any party opposing the tentative ruling must call Department 19 at 408.808.6856 and the opposing party no later than 4:00 PM Wednesday 24 September 2014.  Please specify the issue to be contested when calling the Court and counsel.

On 25 September 2014, the following motions were argued and submitted: (1) the motion of plaintiff Hector Ozuna (“Ozuna”) to augment his expert witness list, and (2) the motion of defendants Alpha Factors and Edward Zimbrick (collectively, “Defendants”) to strike Ozuna’s augmented expert disclosure. Defendants and Ozuna filed formal oppositions to the respective motions.

Statement of Facts

This action arises out of Defendants’ purportedly negligent misrepresentations concerning the value of commercial property purchased by Ozuna. In May 2007, Defendants acted as real estate agents and brokers in connection with Ozuna’s purchase of commercial real property in Monroe, Missouri. (Compl., ¶ 8.) The property at issue was owned by BischCo, Inc. (“BischCo”), which operated a KFC/Taco Bell franchise. (Compl., ¶ 9.) Under the terms of the sale, Ozuna purchased the property and simultaneously leased it back to BischCo. (Compl., ¶ 10.) Defendants represented that the property was valued at $700,000 and BischCo was sufficiently profitable to make all required lease payments. (Compl., ¶¶ 11-12.) In fact, the value of the property was less than $200,000 and BischCo stopped paying rent in August 2008 because its business was unprofitable. (Compl., ¶¶ 15-16.)

In his complaint, Ozuna asserts two causes of action against Defendants, Mark Skilling and Lee & Associates for negligent misrepresentation and negligence.

Discovery Dispute

The present matter was originally set for trial on December 2, 2013. Prior to the original trial date, a demand for disclosure of expert witnesses was served and the parties exchanged their expert witness information. At that time, Ozuna designated Norman Hulberg (“Hulberg”) as its expert witness concerning the valuation of the property in 2007. All discovery, including the expert and non-expert depositions, were completed prior to this date.

On 27 November 2013, Defendants filed a number of motions in limine, including a motion to exclude the testimony of Hulberg on the ground that he was not licensed to conduct appraisals in the state of Missouri.

Six days later, on 3 December 2013, Defendants filed a successful peremptory challenge against the original trial judge and, as a result, the trial was continued to 3 March 2014.

One month later, on 2 January 2014, Ozuna’s counsel filed a motion to be relieved as counsel. On 24 February 2014, the motion was granted. In order to allow Ozuna time to find new counsel, the matter was taken off the trial calendar.

On 8 July 2014, Ozuna retained new counsel and, at a trial setting conference on 22 July 2014, the matter was set for trial on 14 October 2014.

On 5 August 1014, Defendant served a second demand to exchange expert witness information.

On 25 August 2014, Ozuna exchanged his expert witness information, designating, for the first time, Charles Rubison (“Rubison”) as an expert concerning the appraisal of the property at issue.

Over the next three days, Ozuna’s counsel left a number of voicemail messages for Defendants’ counsel concerning the exchange of expert witness information. On 28 August 2014, Defendants’ counsel sent an email in response, indicating that discovery was closed. As no motion to reopen discovery had been made or granted, Defendants’ counsel indicated that Defendants would move ex parte to strike the designation.

On 4 September 2014, Defendants filed an ex parte application to strike Ozuna’s augmented disclosure or, in the alternative, to shorten time for hearing on a motion to strike the disclosure. The Court granted the ex parte application to shorten time for hearing on the motion to strike the disclosure. In addition, the Court granted a parallel request by Ozuna for an order shortening time to hear a motion to augment his expert witness list.

On 8 September 2014, Ozuna and Defendants filed their respective motions to augment the expert witness list and strike the augmented expert witness list. Ozuna and Defendants filed their respective oppositions on 15 September 2014.

Discussion

I. Motion to Augment Expert Witness Disclosure

Ozuna moves for an order pursuant to Code of Civil Procedure section 2034.610 allowing him to designate Rubison as an expert witness. In opposition, Defendants contend that discovery is currently closed and Ozuna has failed to move to reopen it. Furthermore, they argue that Ozuna has not met his burden to establish the conditions necessary to augment his expert witness disclosure.

A. Legal Standards

A party may obtain discovery by serving a demand for exchange of expert witness information. (Code Civ. Proc., § 2034.210.) The demand obligates all parties to mutually and simultaneously exchange information concerning their expert trial witnesses. (Code Civ. Proc., § 2034.210.)

“On motion of any party who has engaged in a timely exchange of expert witness information, the court  may grant leave…” to augment that party’s expert witness list and declaration by adding the name and address of any expert witness whom that party has subsequently retained. (Code Civ. Proc., § 2034.610, subd. (a).) The court shall grant leave to augment an expert witness list only if all of the following conditions are satisfied: the court has taken into account the extent to which the opposing party has relied on the list of expert witnesses, determined that any party opposing the motion will not be prejudiced in maintaining that party’s action or defense on the merits, and found that the moving party would not in the exercise of reasonable diligence have determined to call that expert witness or the moving party failed to determine to call that expert witness as a result of mistake, inadvertence, surprise, or excusable neglect. (Code Civ. Proc., § 2034.620, subds. (a)-(c).) An order granting leave is conditioned on the moving party making the expert immediately available for deposition. (Code Civ. Proc., § 2034.620, subd. (d).)

“A motion to augment a party’s expert witness list must be made at a sufficient time in advance of the time limit for the completion of discovery … to permit the deposition of any expert to whom the motion relates to be taken within that time limit. Under exceptional circumstances, the court may permit the motion to be made at a later time.” (Code Civ. Proc., § 2034.610, subd. (b).)

With regard to time limit to complete discovery, “any party shall be entitled as a matter of right to complete discovery proceedings on or before the 30th day, and to have motions concerning discovery heard on or before the 15th day, before the date initially set for the trial of the action.” (Code Civ. Proc., § 2024.020, subd. (a).) Once discovery is closed, the court lacks jurisdiction to hear any discovery matter unless a party moves to reopen discovery pursuant to Code of Civil Procedure section 2024.050, subdivision (a). (See Pelton-Shepherd Industries, Inc. v. Delta Packaging Products, Inc. (2008) 165 Cal.App.4th 1568, 1586.) The court, however, has discretion to allow a party to complete discovery proceedings closer to or after the initial trial date. (See Code Civ. Proc., § 2024.050.) In exercising its discretion to permit discovery beyond the cut-off date, the court may consider: (1) the need and reasons for further discovery, (2) the diligence of the party seeking the discovery and the reasons the discovery was not completed earlier, and (3) the likelihood that permitting the discovery will prevent the case from going to trial on the date set or result in prejudice to any other party. (Code Civ. Proc., § 2024.050, subd. (b).)

B. Discovery Cut-Off

As noted above, the case was initially set for trial on 2 December 2013. Accordingly, pursuant to Code of Civil Procedure section 2024.020, subdivision (a), discovery is closed. In addition, Ozuna has not formally requested that the Court reopen discovery pursuant to Code of Civil Procedure section 2024.050.

Ozuna argues that Defendants’ service of a second demand to exchange expert witness information on 5 August 2014 is a sufficient basis to allow him to reopen discovery and designate Rubison. In opposition, Defendants assert that the second demand for exchange of expert witness information was made in error and does not re-open discovery. This argument is persuasive. While the parties may enter into an agreement to extend the time for the completion of discovery proceedings, they must do so by a written agreement specifying a later date. (See Code Civ. Proc., § 2024.060.) Here, the second demand for exchange of expert witness information does not constitute a written agreement extending the time for the completion of discovery.

Therefore, the failure to move to reopen discovery proceedings is a sufficient basis, on its own, to deny this motion.

            C. Merits of the Motion

Ozuna contends that he meets each of the conditions set forth in Code of Civil Procedure section 2034.620. In this regard, he asserts that Defendants have not extensively relied on the prior list of expert witnesses, they will not be otherwise prejudiced in maintaining their defense on the merits, and the failure to designate Rubison was the result of excusable neglect.

1. Reliance and Prejudice

Leave to augment may be granted only if the court determines it will not prejudice the opposing party’s ability to maintain its action or defense on the merits. (Code Civ. Proc., § 2034.620, (a)-(b).) As part of this determination, the court must take into account how much the opposing party relied on the expert list provided by the moving party. (Code Civ. Proc., § 2034.620, (a)-(b).)

Ozuna argues that Defendants will not be prejudiced because he produced Rubison’s appraisal of the property in discovery and Rubison’s testimony will not be materially different than the testimony of Hulberg. He further asserts that Defendants will have plenty of time to depose Rubison prior to the 14 October 2014 trial date.

In opposition, Defendants contend that they deposed Hulberg and paid for his deposition, negotiated settlement, and prepared the matter for trial in reliance on the expert witness list. In addition, Defendants argue that they will suffer the time and cost of another deposition, and will have to completely revisit their trial preparations. Defendants conclude that they would be significantly prejudiced by the augmentation of the expert witness list. Defendants’ argument is not persuasive. The reliance and prejudice factors “evidence a concern with prejudicing the party opposing the motion by adding a new expert for which that party, due to its reliance on the previous list of experts, is not prepared and cannot prepare in time.” (Dickison v. Howen (1990) 220 Cal.App.3d 1471, 1479.) Here, there is no indication that cannot complete the deposition and revise their trial preparations prior to the 14 October 2014 trial date. Thus, Defendants would not be prejudiced in maintaining their defense.

2. Excusable Neglect

Ozuna contends that his prior counsel, John Cardosi (“Cardosi”), committed excusable neglect by failing to designate Rubison. Nevertheless, Ozuna submits no evidence in support of this contention.[1] Accordingly, Ozuna does not meet his burden to establish that the failure to designate Rubison was due to excusable neglect.

D. Conclusion

In sum, as discovery is closed, Ozuna was required to move to reopen it pursuant to Code of Civil Procedure section 2024.050. As he has failed to do so, the Court lacks jurisdiction to rule on this motion. Furthermore, even if the Court could rule on this motion, to prevail Ozuna must establish that all of the conditions listed in Code of Civil Procedure section 2034.620 are satisfied. As he has not established that the failure to designate Rubison was a result of excusable neglect, he fails to meet this burden.

Accordingly, Ozuna’s motion for leave to augment his expert witness list is DENIED.

II. Motion to Strike Augmented Expert Disclosure

Defendants move to strike Ozuna’s augmented expert designation on the ground that discovery is closed.

As a threshold matter, Defendants do not provide any authority permitting the Court to strike a party’s expert disclosure. The only remedy authorized by statute for the submission of an improper expert witness designation is the exclusion of expert testimony at trial under Code of Civil Procedure section 2034.300. (See Richaud v. Jennings (1993) 16 Cal.App.4th 81, 85, 90 [affirming trial court’s grant of motion in limine excluding expert testimony for failure to augment witness list].) Thus, Defendants are not authorized to make a motion to strike the expert designation at this time, and the motion to strike Ozuna’s augmented expert designation is DENIED.[2]

 

 

 

 

 

 

 

Conclusion and Order

Ozuna’s motion for leave to augment his expert witness list is DENIED.

Defendants’ motion to strike Ozuna’s augmented expert designation is DENIED.

 

 

________________­­­____________ DATED:

_________________________­­­________________________ HON. SOCRATES PETER MANOUKIAN Judge of the Superior Court County of Santa Clara

 

[1] Ozuna’s counsel declares that Cardosi is not available to explain the reasons for failing to designate Rubison because Cardosi suddenly passed away in May 2014.

[2] The Court notes that the second expert designation has no legal effect in light of the Court’s ruling on the motion to augment the expert witness list.