Case Number: BC564386 Hearing Date: February 21, 2018 Dept: 46

Case Number: BC564386
LONNIE MERRITT ET AL VS MARY HARO

Filing Date: 11/19/2014
Case Type: Mortgage Foreclosure

02/21/2018
Motion to Dismiss

TENTATIVE RULING

Defendants Pieter Maarten Vandermark and e-mortgageloans.com, Inc. dba Exit Dream House Realty Motion to Dismiss pursuant to CCP Section 583.250 is DENIED. The alternate motion to dismiss pursuant to Section 583.410 is also DENIED.

Defendants Vandermark and E-Lenders’ Motion to Strike is continued to 3/16/2018, and Defendants are ordered to provide additional briefing on why they believe the FAC is not covered by CCP §472. Defendants’ supplemental brief shall be submitted by 2/26/18, and the opposition and reply shall be filed and served per the time periods set forth in CCP §1005(b) (i.e. Opposition due 3/5/18 and Reply due 3/9/18).

DISCUSSION

On 11/6/17, Ps filed their FAC for (1) Breach of K; (2) Estoppel; (3) Breach of Good Faith and Fair Dealing; (4) Breach of Fiduciary Duty; (5) Fraudulent Misrepresentation; (6) Fraudulent Promise Without Intention to Perform; (7) Fraudulent Concealment; (8) Fraud; (9) Conspiracy to Commit Fraud; (10) Conversion; (11) Claim and Delivery; (12) Set Aside Fraudulent Transfers; and (13) Imposition of a Constructive Trust; against Ds Mary Haro (hereinafter, “Haro”); Pieter Maarten Vandermark (hereinafter “Vandermark”); Andre Designer, LLC (hereinafter “Andre”); E-MortgageLoans.com, Inc. (hereinafter “E-Lender”); Exit Dream House Realty (hereinafter “Exit”); Olga Leticia Pacheco (hereinafter “Pacheco”); Oscar “Doe” (hereinafter “Oscar”); and DOES 5-9. On 12/24/14, Ps filed an “Amendment to Complaint,” wherein “Pieter Vandermark” was named in lieu of DOE 1. On 4/7/15, this court granted D’s motion to enforce settlement pursuant to CCP § 664.6, and entered judgment according to the terms of the settlement. On 6/30/17, this court set aside that judgment as void.

Plaintiffs allege that, in/about February 2014, they entered into an oral agreement with real estate agent, Defendant Haro, in which Haro agreed to short sell their residential property in exchange for a commission. Plaintiffs claim that Haro breached the aforesaid agreement by not selling the subject property, by fraudulently misrepresenting to them that she had sold same, by forging a deed fraudulently alleging that plaintiffs gifted the subject property to her and by thereafter moving into the subject property.

Three-Year Mandatory Dismissal

CCP §583.210 states:

“(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.”

CCP §583.240 states:

“In computing the time within which service must be made pursuant to this article, there shall be excluded the time during which any of the following conditions existed:

(a) The defendant was not amenable to the process of the court.

(b) The prosecution of the action or proceedings in the action was stayed and the stay affected service.

(c) The validity of service was the subject of litigation by the parties.

(d) Service, for any other reason, was impossible, impracticable, or futile due to causes beyond the plaintiff’s control. Failure to discover relevant facts or evidence is not a cause beyond the plaintiff’s control for the purpose of this subdivision.”

CCP § 583.250 states:

“(a) 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.”

“The court must dismiss the action (dismissal is mandatory) if defendant is not served with summons and complaint within 3 years after the action is commenced. [CCP §§ 583.210, 583.250].” Weil & Brown, et al., CAL. PRAC. GUIDE: CIV. PRO. BEFORE TRIAL (The Rutter Group 2017) ¶ 11:51 (emphasis in original). “Service of summons and complaint is not invalid because of defects that do not impair timely notice to defendant. [Davis v. Allstate Ins. Co. (1989) 217 CA3d 1229, 1231, 266 CR 668, 669 (ordered published by Supreme Court)].” Id. at ¶ 11:52

“The periods for service run from the “commencement of the action.” This means the time the complaint is filed. [CCP § 583.210(a); see Bishop v. Silva (1991) 234 CA3d 1317, 1327, 285 CR 910, 916]” Id. at ¶ 11:58 (emphasis in original). “An action is “commenced” when the original complaint is filed against the defendants named therein. Therefore, the 3-year period for service and filing proof of service runs from that date, rather than from the date of any later amended complaint (even if the amended complaint is the only one served). [CCP § 411.10; Perati v. Atkinson (1964) 230 CA2d 251, 253-254, 40 CR 835, 836].” Id. at ¶ 11:59.

“The above rule applies even where the defendant seeking dismissal was served as one of the “Doe” defendants named in the original complaint, which was later amended to show his true name. Because “Doe” was named in the original complaint, the 3-year period for service and filing proof of service of summons runs from the date it was filed. [Lesko v. Sup.Ct. (Lopez) (1982) 127 CA3d 476, 484-485, 179 CR 595, 599-600—original complaint named only “Doe” defendants to stop running of statute of limitations].” Id. at ¶ 11:60.

The original complaint in this action was filed on 11/19/14. According to the proof of service on file, Vandermark was served with the original complaint on 2/6/15. Vandermark has introduced evidence to show that service of the original complaint was improper. (Declaration of Pieter Maarten Vandermark). However, Vandermark and E-Lender were served with the FAC on 11/4/17. Vandermark and E-Lender argue that because the FAC was filed without leave of court, it is null, and cannot confer jurisdiction over them (Defendants do not challenge the formal propriety of the service of the FAC). Defendants conclude that, since the three years for service has now run, they cannot properly be served and must be dismissed. For the reasons decided below, the court concludes that the moving parties are incorrect.

Validity of FAC

Defendants’ argument is premised on the invalidity of the First Amended Complaint (“FAC”). However, Defendants’ argument on this point is unclear, and the FAC appears to be valid. CCP §472 permits a party to amend its pleading once, without leave of court, at any time before a responsive pleading is filed. No responsive pleading was filed in this case before 11/6/17, the date the FAC was filed. Defendants cite to no authority that the void judgment under CCP §664.6 was a responsive pleading. Defendants may be arguing that the “Amendment to Complaint” filed on 12/24/14 was Plaintiff’s one permitted amendment, and the FAC is therefore actually a second amendment. But that does not appear on the face of the papers. If indeed that is Defendants’ argument, it is a highly technical one which will need to be supported by more argument and authority than Defendants now provide. However, as discussed below, the validity of the FAC is not critical to the disposition of this motion.

Validity of Service

“Only a valid service complies with the requirement of section 583.210 that the summons and complaint be served within three years. (Mannesmann DeMag, Ltd. v. Superior Court (1985) 172 Cal.App.3d 1118, 1125, 218 Cal.Rptr. 632.) Accordingly, while a motion to quash is the procedure usually employed to challenge the validity of service, the same issue is raised by a motion to dismiss under section 583.210. (Id., pp. 1124–1125, 218 Cal.Rptr. 632.).” Dill v. Bergquist Construction Co. (1994) 24 C.A.4th 1426, 1433. It seems clear from Defendants’ evidence that the original service on 2/6/15 was invalid. (Declaration of Pieter Maarten Vandermark). However that may be, service of the FAC on 11/4/17 still beat the three-year deadline by 15 days.

Defendants are correct that an amended complaint filed without leave of court is null. Shapell Industries, Inc. v. Superior Court (2005) 132 C.A.4th 1101, 1107. But Defendants cite to no authority, and none appears, in support of the proposition that otherwise proper service of a defective complaint creates a jurisdictional defect. This court must be careful to avoid “exalt[ing] a procedural technicality over substance.” Mannesmann, supra, 172 C.A.3d at 1125. A superseded complaint is also null. JKC3H8 v. Colton (2013) 221 C.A.4th 468, 477 (when an amendment has been made, the original complaint ceases to have any effect as a pleading or a basis for judgment). And yet, for purposes of CCP §583.210, service of a superseded complaint is sufficient because it ensures that Defendants receive notice of the action. Davis v. Allstate Ins. Co. (1989) 217 C.A.3d 1229, 1231, 1234. There is no reason to treat the FAC any differently, even assuming that it is an improper amendment. Therefore, Defendants have been validly served within the three-year limit.

Tolling

Even if service of a defective pleading would deprive the court of jurisdiction, the three-year period has been tolled.

CCP § 583.240(d) provides for tolling of the three-year period where service was impossible, impracticable, or futile due to circumstances beyond the plaintiff’s control. Section 583.240(d) is construed strictly against the plaintiff, such that if the plaintiff’s problems are at all within her control, no relief is available. Torrey Hills Community Coalition v. City of San Diego (2010) 186 C.A.4th 429, 436; see also Shipley v. Sugita (1996) 50 C.A.4th 320, 325 (positive misconduct on the part of plaintiff’s attorney is not sufficient excuse). However, where a case has been dismissed by the court due to some extrinsic error, service during the time of dismissal would be futile because it is a legal impossibility and might even expose the plaintiff to an action for abuse of process. Graf v. Gaslight (1990) 225 C.A.3d 291, 297 (disapproved on other grounds by Watts v. Crawford (1995) 10 C.4th 743, 758 fn.13).

That is essentially the case here. Plaintiff’s husband improperly signed her name to the settlement agreement, resulting in a void judgment. (Minute Order of 6/30/17). Therefore, the three-year period is tolled at least for the time period between the filing of the request for relief and the grant of said relief; it may be tolled even longer depending on Plaintiff’s diligence in keeping up with the lawsuit, but no arguments or evidence have been presented to the court on that point. Graf, supra, 225 C.A.3d at 297-298. The period between Plaintiffs’ filing of the motion for relief (2/13/17) and this court’s grant of relief (6/30/17) was 137 days. The addition of those 137 days to the original three-year deadline of 11/19/17 gives a new deadline date of 4/4/18. Therefore, Plaintiff’s still have until then to serve Ds.

Two-Year Discretionary Dismissal

CCP §583.410 reads in relevant part:

“(a) The court may in its discretion dismiss an action for delay in prosecution pursuant to this article on its own motion or on motion of the defendant if to do so appears to the court appropriate under the circumstances of the case.”

CCP §583.420 provides in relevant part:

“(a) The court may not dismiss an action pursuant to this article for delay in prosecution except after one of the following conditions has occurred:

(1) Service is not made within two years after the action is commenced against the defendant.

…

(b) The times provided in subdivision (a) shall be computed in the manner provided for computation of the comparable times under Articles 2 (commencing with Section 583.210) and 3 (commencing with Section 583.310).”

CCP § 583.430:

“(a) In a proceeding for dismissal of an action pursuant to this article for delay in prosecution the court in its discretion may require as a condition of granting or denial of dismissal that the parties comply with such terms as appear to the court proper to effectuate substantial justice.

(b) The court may make any order necessary to effectuate the authority provided in this section, including, but not limited to, provisional and conditional orders.”

Motions under these sections (but not motions under the three-year rule) are governed by CRC Rule 3.1342:

“(a) Notice of motion

A party seeking dismissal of a case under Code of Civil Procedure sections 583.410-583.430 must serve and file a notice of motion at least 45 days before the date set for hearing of the motion. The party may, with the memorandum, serve and file a declaration stating facts in support of the motion. The filing of the notice of motion must not preclude the opposing party from further prosecution of the case to bring it to trial.

(b) Written opposition

Within 15 days after service of the notice of motion, the opposing party may serve and file a written opposition. The failure of the opposing party to serve and file a written opposition may be construed by the court as an admission that the motion is meritorious, and the court may grant the motion without a hearing on the merits.

(c) Response to opposition

Within 15 days after service of the written opposition, if any, the moving party may serve and file a response.

(d) Reply

Within five days after service of the response, if any, the opposing party may serve and file a reply.

(e) Relevant matters

In ruling on the motion, the court must consider all matters relevant to a proper determination of the motion, including:

(1) The court’s file in the case and the declarations and supporting data submitted by the parties and, where applicable, the availability of the moving party and other essential parties for service of process;

(2) The diligence in seeking to effect service of process;

(3) The extent to which the parties engaged in any settlement negotiations or discussions;

(4) The diligence of the parties in pursuing discovery or other pretrial proceedings, including any extraordinary relief sought by either party;

(5) The nature and complexity of the case;

(6) The law applicable to the case, including the pendency of other litigation under a common set of facts or determinative of the legal or factual issues in the case;

(7) The nature of any extensions of time or other delay attributable to either party;

(8) The condition of the court’s calendar and the availability of an earlier trial date if the matter was ready for trial;

(9) Whether the interests of justice are best served by dismissal or trial of the case; and

(10) Any other fact or circumstance relevant to a fair determination of the issue.

The court must be guided by the policies set forth in Code of Civil Procedure section 583.130.

(f) Court action

The court may grant or deny the motion or, where the facts warrant, the court may continue or defer its ruling on the matter pending performance by either party of any conditions relating to trial or dismissal of the case that may be required by the court to effectuate substantial justice.”

While the court must consider the ten factors listed in Rule 3.1342(e), it need not issue express findings on them. Wilson v. Sunshine Meat & Liquor Co. (1983) 34 C.3d 554, 562-563.

Defendants Vandermark and E-Lender argue that this court should dismiss them because Plaintiffs produce no excuse for their failure to effectuate service. However, as noted above, Plaintiff has produced an excuse meritorious enough to warrant revival of the action: her husband improperly signed a settlement on her behalf and then abandoned the litigation. In the unique circumstances of this case, the court declines to exercise its discretion to dismiss the matter at this time. This is especially true in light of the fact that discretionary dismissals are always without prejudice. Franklin Capital Corp. v. Wilson (2007) 148 C.A.4th 187, 213-215. Plaintiff may just re-file and re-serve her case against Defendants and then there would be two cases.

Motion to Strike

Ds Vandermark and E-Lender have concurrently filed a motion to strike the FAC, which is to be heard two days after the instant motion, on 2/23/18. This motion contains no more argument than the statement that amended pleadings filed outside the provisions of CCP §472 must be filed with leave of court. As discussed above, this argument begs the question because it appears that the FAC was filed within the provisions of Section 472.

There is also a demurrer and motion to strike filed by D Haro and set for hearing on 3/16/18.

The motion to strike of Defendants Vandermark and E-Lender is continued to 3/16/2018, and Defendants are ordered to provide additional briefing on why they believe the FAC is not covered by Section 472. Defendants’ supplemental brief should be submitted by 2/26/18, and the opposition and reply may be done per the time periods set forth in CCP §1005(b) (i.e. Opposition due 3/5/18 and Reply due 3/9/18). If Ds Vandermark and E-Lender are correct about the propriety of the FAC, it will affect the demurrer and motion to strike of Haro as well.

Conclusion

The motion to dismiss under Section 583.250 is DENIED. The alternate motion to dismiss under Section 583.410 is DENIED. Defendants’ Motion to Strike, currently on calendar for 2/23/18 is CONTINUED to 3/16/17, for additional briefing on the issue of whether the FAC is properly under CCP §472. The briefing schedule is as set forth above.

IT IS SO ORDERED:

Frederick C. Shaller, Judge