This case was last updated from Los Angeles County Superior Courts on 12/30/2020 at 01:15:21 (UTC).

AHRON ZILBERSTEIN, ET AL. VS IRA LEIBOWITZ, ET AL.

Case Summary

On 03/19/2019 AHRON ZILBERSTEIN filed a Contract - Other Contract lawsuit against IRA LEIBOWITZ. This case was filed in Los Angeles County Superior Courts, Van Nuys Courthouse East located in Los Angeles, California. The Judges overseeing this case are SHIRLEY K. WATKINS, MICHAEL J. CONVEY and THERESA M. TRABER. The case status is Pending - Other Pending.
Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    *******0375

  • Filing Date:

    03/19/2019

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

SHIRLEY K. WATKINS

MICHAEL J. CONVEY

THERESA M. TRABER

 

Party Details

Plaintiffs

72 VAN NUYS LLC A CALIFORNIA LIMITED LIABILITY COMPANY

ZILBERSTEIN AHRON

6360 VAN NUYS LLC A CALIFORNIA LIMITED LIABILITY COMPANY

E&N FINANCIAL SERVICES & DEVELOPMENT INC. AKA E.N. FINANCIAL SERVICES AND DEVELOPMENT INC. A CALIFORNIA CORPORATION

Defendants

CLASS FIVE TRADING LLC A CALIFORNIA LIMITED LIABILITY COMPANY

CLASS FIVE HOLDINGS LLC A DELAWARE LIMITED LIABILITY COMPANY

CLASS FIVE HOLDINGS LLC A CALIFORNIA LIMITED LIABILITY COMPANY

KIRSCH TOBY

LEIBOWITZ IRA

SEVEN WELLS LLC A CALIFORNIA LIMITED LIABILITY COMPANY

CLASS FIVE TRADING LLC A DELAWARE LIMITED LIABILITY COMPANY

LEIBOWITZ AMY

SCHWARZ STEPHEN

RASKIN CHAIM

DIVISION SIX SPORTS INC. A CALIFORNIA CORPORATION

CLASS FIVE HOLDINGS DE LLC A DELAWARE LIMITED LIABILITY COMPANY

Attorney/Law Firm Details

Plaintiff Attorney

KOLODZI MICHAEL DANIEL

Defendant Attorneys

KATZ DANIEL

ISENBERG RYAN L.

LAKE DAVID

ISENBERG RYAN

LAKE DAVID NATHAN

 

Court Documents

Case Management Statement

12/28/2020: Case Management Statement

Minute Order - MINUTE ORDER (NUNC PRO TUNC ORDER)

12/28/2020: Minute Order - MINUTE ORDER (NUNC PRO TUNC ORDER)

Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE)

12/28/2020: Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE)

Order Appointing Court Approved Reporter as Official Reporter Pro Tempore - ORDER APPOINTING COURT APPROVED REPORTER AS OFFICIAL REPORTER PRO TEMPORE PAM MYERS #12940

10/22/2020: Order Appointing Court Approved Reporter as Official Reporter Pro Tempore - ORDER APPOINTING COURT APPROVED REPORTER AS OFFICIAL REPORTER PRO TEMPORE PAM MYERS #12940

Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE)

10/22/2020: Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE)

Answer

10/22/2020: Answer

Case Management Statement

10/8/2020: Case Management Statement

Case Management Statement

10/7/2020: Case Management Statement

Cross-Complaint

9/17/2020: Cross-Complaint

Answer

9/17/2020: Answer

Notice - NOTICE NOTICE OF CONTINUANCE OF CASE MANAGEMENT CONFERENCE

9/22/2020: Notice - NOTICE NOTICE OF CONTINUANCE OF CASE MANAGEMENT CONFERENCE

Notice Re: Continuance of Hearing and Order

9/14/2020: Notice Re: Continuance of Hearing and Order

Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE; HEARING ON DEMURRER - WITHOUT MOT...)

9/1/2020: Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE; HEARING ON DEMURRER - WITHOUT MOT...)

Minute Order - MINUTE ORDER (RULING ON SUBMITTED MATTER)

9/2/2020: Minute Order - MINUTE ORDER (RULING ON SUBMITTED MATTER)

Order - ORDER RE: DEFENDANT'S DEMURRER TO THE SECOND AMENDED COMPLAINT'S FOURTH, NINTH, AND TENTH CAUSES OF ACTION

9/2/2020: Order - ORDER RE: DEFENDANT'S DEMURRER TO THE SECOND AMENDED COMPLAINT'S FOURTH, NINTH, AND TENTH CAUSES OF ACTION

Certificate of Mailing for - CERTIFICATE OF MAILING FOR (RULING ON SUBMITTED MATTER) OF 09/02/2020

9/2/2020: Certificate of Mailing for - CERTIFICATE OF MAILING FOR (RULING ON SUBMITTED MATTER) OF 09/02/2020

Reply - REPLY IN SUPPORT OF DEFENDANTS' DEMURRER TO PLAINTIFFS' VERIFIED SECOND AMENDED COMPLAINT

8/24/2020: Reply - REPLY IN SUPPORT OF DEFENDANTS' DEMURRER TO PLAINTIFFS' VERIFIED SECOND AMENDED COMPLAINT

Opposition - OPPOSITION OPPOSITION TO DEMURRER TO SECOND AMENDED COMPLAINT

8/19/2020: Opposition - OPPOSITION OPPOSITION TO DEMURRER TO SECOND AMENDED COMPLAINT

112 More Documents Available

 

Docket Entries

  • 12/30/2020
  • Hearing12/30/2020 at 13:30 PM in Department U at 6230 Sylmar Ave., Van Nuys, CA 91401; Case Management Conference

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  • 12/28/2020
  • Docketat 08:30 AM in Department U, Theresa M. Traber, Presiding; Case Management Conference - Not Held - Advanced and Continued - by Court

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  • 12/28/2020
  • Docketat 2:55 PM in Department U, Theresa M. Traber, Presiding; Nunc Pro Tunc Order

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  • 12/28/2020
  • DocketMinute Order ( (Nunc Pro Tunc Order)); Filed by Clerk

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  • 12/28/2020
  • DocketMinute Order ( (Case Management Conference)); Filed by Clerk

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  • 12/28/2020
  • DocketCase Management Statement; Filed by Ahron Zilberstein (Plaintiff); 72 Van Nuys, LLC, a California limited liability company (Plaintiff); 6360 Van Nuys, LLC, a California limited liability company (Plaintiff) et al.

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  • 10/22/2020
  • Docketat 08:30 AM in Department U, Theresa M. Traber, Presiding; Case Management Conference - Held - Continued

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  • 10/22/2020
  • DocketMinute Order ( (Case Management Conference)); Filed by Clerk

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  • 10/22/2020
  • DocketAnswer; Filed by Ahron Zilberstein (Plaintiff); 72 Van Nuys, LLC, a California limited liability company (Plaintiff); 6360 Van Nuys, LLC, a California limited liability company (Plaintiff) et al.

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  • 10/22/2020
  • DocketOrder Appointing Court Approved Reporter as Official Reporter Pro Tempore (Pam Myers #12940); Filed by Clerk

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155 More Docket Entries
  • 06/18/2019
  • DocketProof of Service by Substituted Service; Filed by Ahron Zilberstein (Plaintiff); 72 Van Nuys, LLC, a California limited liability company (Plaintiff); 6360 Van Nuys, LLC, a California limited liability company (Plaintiff) et al.

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  • 04/24/2019
  • DocketNotice of Lis Pendens; Filed by Ahron Zilberstein (Plaintiff); 72 Van Nuys, LLC, a California limited liability company (Plaintiff); 6360 Van Nuys, LLC, a California limited liability company (Plaintiff) et al.

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  • 04/24/2019
  • DocketNotice of Lis Pendens; Filed by Ahron Zilberstein (Plaintiff); 72 Van Nuys, LLC, a California limited liability company (Plaintiff); 6360 Van Nuys, LLC, a California limited liability company (Plaintiff) et al.

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  • 04/10/2019
  • DocketAmendment to Complaint (Fictitious/Incorrect Name); Filed by Ahron Zilberstein (Plaintiff); 72 Van Nuys, LLC, a California limited liability company (Plaintiff); 6360 Van Nuys, LLC, a California limited liability company (Plaintiff) et al.

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  • 03/29/2019
  • DocketRequest for Dismissal; Filed by Ahron Zilberstein (Plaintiff); 72 Van Nuys, LLC, a California limited liability company (Plaintiff); 6360 Van Nuys, LLC, a California limited liability company (Plaintiff) et al.

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  • 03/20/2019
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 03/19/2019
  • DocketCivil Case Cover Sheet; Filed by Ahron Zilberstein (Plaintiff); 72 Van Nuys, LLC, a California limited liability company (Plaintiff); 6360 Van Nuys, LLC, a California limited liability company (Plaintiff) et al.

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  • 03/19/2019
  • DocketComplaint; Filed by Ahron Zilberstein (Plaintiff); 72 Van Nuys, LLC, a California limited liability company (Plaintiff); 6360 Van Nuys, LLC, a California limited liability company (Plaintiff) et al.

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  • 03/19/2019
  • DocketNotice of Case Assignment - Unlimited Civil Case; Filed by Clerk

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  • 03/19/2019
  • DocketSummons (on Complaint); Filed by Ahron Zilberstein (Plaintiff); 72 Van Nuys, LLC, a California limited liability company (Plaintiff); 6360 Van Nuys, LLC, a California limited liability company (Plaintiff) et al.

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Tentative Rulings

Case Number: *******0375 Hearing Date: February 3, 2022 Dept: U

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT

AHRON ZILBERSTEIN, et al

Plaintiffs,

vs.

IRA LEIBOWITZ, et al.

Defendants.

[AND RELATED CROSS ACTION]

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CASE NO: *******0375

[TENTATIVE] ORDER RE: PLAINTIFFS’ MOTION TO VACATE ORDER FOR SUMMARY ADJUDICATION, WHICH IS A DISGUISED MOTION TO RECONSIDER

Dept. U

8:30 a.m.

January 21, 2022

I. BACKGROUND

This action is part of a business dispute between Plaintiffs Ahron Zilberstein (Zilberstein) and associated entities[1] and Defendants Ira Leibowitz (Leibowitz) and associated entities[2]. On March 30, 2020, Plaintiffs filed their now-operative second amended complaint (SAC), alleging ten causes of action: (1) breach of partnership agreement; (2) breach of fiduciary duty; (3) fraud; (4) conspiracy to commit breach of fiduciary duty; (5) accounting; (6) common count: goods & services rendered; (7) common count: open book account; (8) imposition of equitable lien; (9) judicial foreclosure or deed of trust; and (10) judicial foreclosure or deed of trust.

Previously, on July 25, 2019, Plaintiffs had filed their first amended complaint (FAC), which included causes of action akin to those later alleged in the SAC, as well as a cause of action for accounting. On March 23, 2021, the Court ruled in favor of Defendants’ motion for summary adjudication as to Plaintiffs’ accounting cause of action in the FAC. On March 30, 2020, Defendants filed the SAC, which included no cause of action for accounting.

On September 23, 2021, Plaintiffs filed the instant motion to vacate the Court’s order re summary adjudication entered on January 23, 2021 on the grounds that the order resulted from Plaintiffs’ or Plaintiffs’ counsel’s “mistake, inadvertence, surprise, or excusable neglect,” citing Code of Civil Procedure section 473 subdivision (b). Plaintiffs assert that they were unable to or did not obtain sufficient evidence to withstand Defendants’ motion to adjudicate the accounting cause of action in the SAC, that new evidence has recently been discovered, and that these circumstances amount to grounds for relief from the order adjudicating the accounting cause of action due to a Plaintiffs’ or Plaintiffs’ counsel’s mistake[3] under section 473[4].

Plaintiffs’ motion is accompanied by declarations from Zilberstein (Zilberstein dec.), Plaintiffs’ counsel Michael Kolodzi (Kolodzi dec.), and Plaintiffs’ counsel William Tanenbaum (Tanenbaum dec.). It is also accompanied by a proposed order granting the motion, as well as papers in opposition to the motion for summary judgment heard on March 23, 2020, which are being submitted as proposed replacement papers for those originally filed by Plaintiffs two years ago.

On January 5, 2022, Defendants filed their brief in opposition to Plaintiffs’ motion, which is accompanied by the declarations of defense counsel David Lake (Lake dec.). As of January 14, 2022, there were no papers filed in reply to Defendants’ opposition brief.

I. LEGAL STANDARD

a. Reconsideration

A motion for reconsideration of an order or judgment may brought under Code of Civil Procedure section 1008 and may be either mandatory or permissive; subdivision (b) of this section provides for permissive relief upon a moving party’s showing that new information which warrants reconsideration, and which could not, with reasonable diligence, have been discovered or produced at the prior order or judgment. (New York Times Co. v. Superior Court (2005) 135 Cal.App.4th 206, 212—213 [the moving party’s burden is substantial, comparable to the requirements for moving for a new trial on grounds that there now exists new evidence not available at the original trial.)

The 10-day filing requirement for a motion to reconsider is strictly construed, and even one day beyond this 10-day filing deadline is grounds for the trial court to decline to hear the motion on its merits. (Wiz Technology, Inc. v. Coopers & Lybrand (2003) 106 Cal.App.4th 1, 3 (Wiz Tech.) [trial court did not abuse its discretion in denying plaintiff's motion for reconsideration on eleventh day].)

b. Relief from Order Under 473 subd. (b)

Under section 473 subdivision (b), a party may apply for permissive relief “from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect.” (Code Civ. Proc. 473 subd. (b); see also Huens v. Tatum (197) 52 Cal.App.4th 259, 265 [“Mandatory relief is not available after a summary judgment or judgment after trial”].)

In order to claim permissive relief under this section, a party must show: (a) diligence in filing the motion, including that filing occurred within a reasonable time and not later than 6 months of the order being challenged; (b) requests for relief from order resulting from the party’s “mistake inadvertence, surprise, or excusable neglect”; and (c) a copy of the pleading or other document that is being proposed as a substitute filing for the challenged document[5]. (Code Civ. Proc. 473 subd. (b).)

It is essential that the moving party allege some mistake, surprise, inadvertence, or neglect, as motions alleging grounds for relief other than these four will be denied. (See, e.g., Huh v. Wang (2007) 158 Cal.App.4th 1406, 1414—1415 (Huh) [attorney's bare claim of being “overwhelmed and disorganized” was no grounds for section 473 motion because it alleged no mistake or inadvertent action].) It is also possible that a party alleges something to be a mistake, but the court finds it the alleged thing to be no mistake at all. (See, e.g., Austin v. Los Angeles Unified School Dist. (2016) 244 Cal.App.4th 918, 931 [party’s failure to sign her motion under penalty of perjury was a mistake within the meaning intended by section 473]; contra, Billings v. Edwards (1981) 120 Cal.App.3d 238, 244—245 (Billings) [party’s failure to respond to request for admissions and subsequent failure to move for relief within 30 days of notice of default and whose summary judgment was entered based on admissions was not a mistake, and the party could not claim his own nonresponse as an ‘error’].) And "[s]ection 473 cannot be used to remedy attorney mistakes, such as the failure to provide sufficient evidence in opposition to a summary judgment motion.” (Wiz Tech., supra, 106 Cal.App.4th at p. 17 [assumes that an attorney’s failure to gather sufficient evidence to oppose a summary judgment motion is going to be the product of mistake rather than, e.g., strategy].)

There is also a strict due diligence requirement to bring this motion, and the moving party carries the burden of showing a timely enough filing or attempt to file so as to amount to due diligence. (Huh, supra, 158 Cal.App.4th at p. 1420 [“moving party has a double burden: He must show a satisfactory excuse for his default, and he must show diligence in making the motion after discovery of the default”].) Whether a party has acted diligently is a factual question for the trial court. (Ibid.)

II. DISCUSSION

a. Plaintiffs’ can maintain no action for reconsideration, as the deadline for this procedure is long-passed and strictly construed.

On September 23, 2021, Plaintiffs filed papers seeking to vacate the Court’s order granting summary adjudication as to the accounting cause of action in Plaintiff’s FAC. This seeks to have the Court reconsider a prior order, which is more appropriately addressed by a motion to reconsider. As the relevant order was entered on March 23, 2020, and Plaintiffs’ motion seeking relief from adjudication was filed on September 23, 2021, Plaintiffs are outside the 10-day filing deadline for such a motion. This is presumably why Plaintiffs have instead filed a motion under section 473.

b. Plaintiffs’ motion to vacate adjudication is denied for lack of a ‘mistake’ and failure to show due diligence.

Here, Plaintiffs’ motion asserts that, at the time they filed their opposition papers to the motion for summary judgment scheduled to be heard on March 23, 2020, Defendants were “stone-walling” Plaintiffs from receiving relevant discovery. (Motion, p. 5, 1.) Plaintiffs assert that newly discovered deposition testimony provides sufficient evidentiary support for their opposition to summary judgment to have withstood the motion and would have, if only it had been obtained and employed in time. (Id. at p. 6, 1.) And Plaintiffs assert that this purported ‘mistake’ is excusable, as Plaintiffs’ legal counsel did not know until taking recent deposition testimony that these witnesses were sitting on such helpful, relevant evidence. (Ibid.) Plaintiffs argue they have been diligent in this process, as shown by the fact that the first transcript of either of the relevant depositions was not available until September 2, 2021, and that Plaintiffs filed their motion on September 23, 2021.[6] (Id. at p. 6, 5.)

These circumstances do not amount to grounds for the Court to consider Plaintiffs’ motion seeking relief under section 473 on the merits, because Plaintiffs do not even argue that sufficient grounds for the motion even exist. Most significantly, Plaintiffs have not alleged a ‘mistake,’ only that they were stymied by Defendants in obtaining relevant discovery. A party’s failure to obtain certain discovery, especially discovery of matters of which it claims it was previously unaware, is not a ‘mistake’ in the sense contemplated by section 473. (See, e.g., Huh, supra, 158 Cal.App.4th at pp. 1414—1415; see also, e.g., Billings, supra, 120 Cal.App.3d at pp. 244—245.) This alone is sufficient to warrant denying the motion.

Plaintiffs have also failed to meet their burden of showing due diligence. Plaintiffs assert that the timely of its filing the motion demonstrates due diligence, but the 1-month and approximately 20-day period between Plaintiffs alleged first knowledge of new, relevant evidence supporting this motion and the motion’s filing does not show diligence on its face and is not offered alongside other substantial evidence or argument to offer additional support in favor of finding diligence. Therefore, Plaintiffs have not met their burden of proving diligence, which is further grounds for denying the motion. (Huh, supra, 158 Cal.App.4th at p. 1420.)

c. Plaintiffs’ motion for sanctions is also denied.

As the Court has denied Plaintiffs’ motion for relief from adjudicating order under section 473, Plaintiffs’ motion for sanctions filed concurrently with their motion for 473 relief is also denied.

III. CONCLUSION

Plaintiffs’ motion for relief from order adjudicating the cause of action for accounting in the Plaintiffs’ FAC is DENIED.

Accordingly, Plaintiffs’ motion for sanctions is DENIED.

DATED: January 21, 2022

Bernie C. LaForteza

Judge of the Superior Court


[1] There are three plaintiffs in this action in addition to Zilberstein: 72 Van Nuys, LLC; 6360 Van Nuys, LLC; and E&N Financial Services & Development, Inc. Each is a business entity owned or controlled by Zilberstein.

[2] There are several defendants in this action in addition to Liebowitz, several of which are business entities Liebowitz owns or controls, including those opposing the instant motion. Plaintiffs bring the instant motion against Defendants Leibowitz, Class Five Trading, LLC (DE), Class Five Trading, LLC (CA), Class Five Holdings, LLC (DE), Class Five Holdings, LLC (CA) and Seven Wells, LLC.

[3] This order sometimes uses the word “mistake” alone as shorthand for “mistake, inadvertence, surprise, or excusable neglect.” In each instance where “mistake” appears alone, what is meant is reference to all four grounds identified by section 473 subd. (b) as being sufficient to warrant the motion.

[4] Undesignated statutory references are to the Code of Civil Procedure.

[5] Here, the documents being proposed as substitute filings are an updated opposition brief and separate statement in support of Defendant’s opposition to Plaintiff’s motion for summary judgment.

[6] The frst deposition which Plaintiff purports to have revealed new, relevant evidence occurred on July 8, 2021, and only the transcript was not available until later.



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Case Number: *******0375 Hearing Date: September 15, 2021 Dept: U

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT

AHRON ZILBERSTEIN, et al.,

Plaintiff,

vs.

IRA LEIBOWITZ, et al.,

Defendants.

CASE NO: *******0375

[TENTATIVE] ORDER RE: PLAINTIFFS’ MOTION FOR PROTECTIVE ORDER AGAINST DEPOSITIONS

Dept. U

8:30 a.m.

September 15, 2021

I. BACKGROUND

This case arises from a series of financial transactions between entities owned and operated by plaintiff Ahron Zilberstein (“Plaintiffs”) and entities owned and operated by defendant Ira Leibowitz (“Defendants”). On March 19, 2019, Plaintiffs filed a Complaint against Defendants alleging: (1) breach of oral agreement; (2) breach of fiduciary duty; (3) fraud; (4) conspiracy to commit breach of fiduciary duty; (5) accounting; (6) common count: goods & services rendered; (7) quiet title; (8) imposition of equitable lien; (9) judicial foreclosure of deed of trust for the Corinthian Property; and (10) judicial foreclosure of deed of trust for the Neoline Property.

Defendants noticed the depositions of Alon Kaspi (“Kaspi”) and Tzali Vizel (“Vizel”) (collectively, “Deponents”) for April 14, 2021 and April 15, 2021.

On or about April 7, 2021, Plaintiffs’ counsel wrote Defendants’ counsel to state objection to the notices, asking Defendants’ counsel to take the notices off calendar. Defendants’ counsel did not.

On April 13, 2021, Plaintiffs filed a motion for protective order, asking that the Court quash notices of Deposition to Kaspi and Vizel.

On September 1, 2021, Defendants filed an opposition to the motion.

Plaintiffs have filed no reply.

II. LEGAL STANDARD

The court may issue a protective order to keep any party from unwarranted annoyance, embarrassment, oppression, burden, or expense. (Cal. Civ. Proc. ;2025.420(b).) Generally, the moving party must show that the resulting burden, expense, or intrusiveness of taking the deposition “clearly outweighs the likelihood that the information sought will lead to the discovery of admissible evidence.” (Emerson Elec. Co. v. Sup. Ct. (1997) 16 Cal.4th 1101, 1110.)

Where a party must resort to the courts, the burden is on the party seeking the protective order to show good cause for whatever order is sought. (Nativi v. Deutsche Bank National Trust Co. (2014) 223 Cal.App.4th 261, 318.) Such a motion may be properly denied where the declaration submitted in support of the motion lacks factual specificity (Ibid; See also People v. Superior Court (1967) 248 Cal.App.2d 276, 281-282 [declaration containing mere conclusions insufficient to establish good cause].)

III. MEET AND CONFER

Parties must “make a reasonable and good faith attempt at an informal resolution of each issue presented” by a request before filing a motion for a protective order. (Cal. Civ. Proc. ; 2030.090.) Here, the letter sent by Plaintiffs’ counsel to Defendants’ counsel on April 7, 2021, which is titled “Meet and Confer Letter,” is a reasonable and good faith attempt to seek resolution to the issues presented by this motion. (Motion, Ex. 1, PDF p. 9.) Plaintiffs’ counsel states, “…I send this letter as an attempt to meet and confer about resolving our disputes… I suggest we have a phone call to discuss options to get the information… you seek to obtain from the aforementioned deposition.” This is sufficient to satisfy the requirement under CCP ; 2030.090.

IV. DISCUSSION

Plaintiffs ask the Court for a protective order and that the Court quash notices of depositions of Kaspi and Vizel. In doing so, Plaintiffs carry the burden of showing that the harm of Deponents attending depositions clearly outweighs the likelihood that the information sought will lead to the discovery of admissible evidence. (Emerson, supra, 16 Cal.4th at 1110.) To meet this burden, Plaintiffs must show good cause with factual specificity. (Nativi, supra, 223 Cal.App.4th at 318.)

Here, Plaintiffs state the following grounds for their motion: (1) the requested depositions are not relevant to the subject action; and (2) the requested depositions violate rights of privacy and have been noticed to harass Plaintiffs. (Motion, p. 2, ¶ 2.) However, Plaintiffs have not stated any facts showing this is so.

Plaintiffs state that Defendants’ attempt to depose Kaspi and Vizel is “unreasonable and oppressive since both Kaspi and Vizel have no first-hand knowledge of any of the transactions between the parties in this case.” (Motion, p. 4, ¶ 2.) However, it does not follow from the allegation that the depositions are irrelevant that the depositions are also oppressive. Nowhere else in Plaintiffs’ motion do Plaintiffs state any other justification as to why the depositions are oppressive. Therefore, Plaintiffs have not stated facts showing good cause for their motion.

Furthermore, Plaintiffs have stated the conclusion that the depositions are irrelevant but have stated no reasons why this is so. For their part, however, Defendants have articulated a reason why the depositions are relevant and within the scope of discovery, which is to obtain information from Plaintiffs’ former business partners. (Opposition, p. 4, ¶ 2.)

Nowhere else in Plaintiffs’ motion do Plaintiffs advance their argument further than stating the conclusion that the depositions were noticed to “intimidate and harass” Plaintiffs. These are merely conclusions, and mere conclusions are insufficient to establish good cause. (People v. Superior Court, supra, 248 Cal.App.2d at 281-282.) As Plaintiffs have failed to show good cause for their motion through articulating supportive facts, Plaintiffs have failed to meet their burden under CCP ; 2030.090.

Therefore, Plaintiffs’ motion shall be denied.

V. CONCLUSION

For the foregoing reasons,

Plaintiffs’ Motion is DENIED.

Defendants are ORDERED to give notice of this ruling.

DATED: September 15, 2021

_____________________

Bernie C. LaForteza

Judge of the Superior Court

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Case Number: *******0375    Hearing Date: May 24, 2021    Dept: U

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT

AHRON ZILBERSTEIN, ET AL,

Plaintiffs,

vs.

IRA LEIBOWITZ, ET AL,

Defendants.

AND RELATED CROSS-COMPLAINT.

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CASE NO: *******0375

[TENTATIVE] ORDER RE: DEFENDANT’S MOTION TO COMPEL RESPONSES TO SPECIAL INTERROGATORIES (SET ONE) FROM PLAINTIFF AND REQUEST FOR MONETARY SANCTIONS

Dept. U

8:30 a.m.

May 25, 2021

Res. ID: 060895137060

I. BACKGROUND

This case arises out of an alleged breach of partnership. Plaintiffs filed the first Complaint on March 19, 2019, the First Amended Complaint on July 25, 2019, and the Second Amended Complaint on March 30, 2020. The Second Amended Complaint alleges seven causes of action and seeks the imposition of an equitable lien and judicial foreclosures of deed of trust.

On April 8, 2021, Defendant Ira Leibowitz (“Defendant”) filed four Motions to Compel Responses to Discovery. At issue here is Defendant’s Motion to Compel Responses to Special Interrogatories (Set One) from Plaintiff 6360 Van Nuys, LLC. (“Plaintiff”), Reservation ID 060895137060.

Defendant moves the Court to compel Plaintiff to respond to Special Interrogatories (Set One) and impose monetary sanctions against Plaintiff.

II. LEGAL STANDARD

a. Compel Initial Discovery – Interrogatories

The party to whom interrogatories are directed must respond within 30 days after service, or 35 days when served by mail. (Code Civ. Proc. (“CCP”) ; 2030.260(a).)

Section 2030.290(b) permits the propounding party to move for an order compelling response. The moving party must show that it served its discovery requests on the responding party; the time to respond has expired; and that the responding party has not served any responses. (Leach v. Sup. Ct. ;(1980) 111 ;Cal.App.3d ;902, 905-906.) The moving party is not required to file a Separate Statement when no response has been provided to the request of discovery. (Cal. Rules of the Court, rule 3.1345(b).)

If a party fails to respond to interrogatories, CCP section 2030.290 imposes a waiver of any objection to the demands unless the party satisfies both conditions in CCP section 2030.209(a).

b. Monetary Sanctions

Monetary sanctions are provided for under Chapter 7 of the CCP. That section authorizes the court to impose monetary sanctions on those who misuse the discovery process. Sanctions can include reasonable expenses, including attorney’s fees, incurred by any party as a result of that misuse. (CCP ; 2023.30(a).) If a monetary sanction is authorized, the court must impose the sanction unless it finds that the one to be sanctioned “acted with substantial justification or that other circumstances make the imposition of the sanction unjust.” (CCP ; 2023.030(a).)

Misuse of the discovery process includes failure to respond to an authorized method of discovery. (CCP ; 2023.010.) Sanctions are mandatory under CCP sections 2030.290(c) and 2031.300(c) for unsuccessfully making or opposing a motion to compel responses to interrogatories and requests for production, respectively. The court must impose these sanctions unless it finds that the party to be sanctioned “acted with substantial justification or that other circumstances make the imposition of the sanction unjust.” (CCP ;; 2030.290(c), 2031.300(c).)

III. DISCUSSION

a. Compelling Special Interrogatories (Set One)

Defendant asserts that the Special Interrogatories (Set One) (“SROG”) related to the Second Amended Complaint was propounded on Plaintiff on December 9, 2020. (Motion to Compel Responses to SROG, Lake Decl., Exh. A.) Accordingly, responses were due by January 11, 2021. On January 8, 2021, Plaintiff asked for a 30-day extension to provide the responses. (Lake Decl., Exh. B.) On February 8, 2021, Plaintiff received another 2-week extension. (Lake Decl., Exh. C.) Defendant asserts that Plaintiff did not provide any responses to SROG by the deadline of February 22, 2021.

On March 8, 2021, Defendant asked Plaintiff when responses would be sent. (Lake Decl., Exh. H.) Plaintiff stated that they would try to get the responses within 10 days. (Id.) Plaintiff’s then-counsel also explained that he was subbing out of the case and was focusing on handling the first deadlines before leaving.

On March 18, 2021, Defendant asserts that no responses had been sent. (Lake Decl., ¶ 7.) After the March 23, 2021 hearing, Defendant once again reached out to Plaintiff to ask that responses be provided by April 6, 2021. (Lake Decl., Exh. G.) Plaintiff’s counsel confirmed by email.

On April 1, William Tanenbaum was substituted as Plaintiff’s attorney.

Defendant’s counsel stated that as of the date of the filing of the motion, April 8, 2021, no responses had been received. (Lake Decl., ¶ 10.)

Plaintiff provided proof that Plaintiff served responses to SROG on April 8, 2021 (the same date the instant motion was filed). As such, Plaintiff argues that the motion is moot and must be denied.

The Court agrees that the motion to compel is moot.

b. Monetary Sanctions

Defendant asserts that Plaintiff should be ordered to pay monetary sanctions. Supporting this is Plaintiff’s history of failing to respond to discovery requests after several extensions. Defendant requests a total of $3,311.65 in sanctions. This amount includes, at $500 per hour, 2.5 hours preparing the instant motion, declaration, and exhibits; an additional anticipation of 2 hours reviewing the opposition to the motion and drafting a reply; an additional anticipation of 2 hours at the hearing; and the $61.65 filing fee of the motion.

Plaintiff asserts that they acted with substantial justification, because Plaintiff was in the process of changing attorneys when the responses were due. Further, Plaintiff argues that the two-day delay does not prejudice Defendant, especially considering that the trial date has not yet been set.

Sanctions are mandatory under CCP sections 2030.290(c) and 2031.300(c) for unsuccessfully making or opposing a motion to compel responses to interrogatories and requests for production, respectively. The court must impose these sanctions unless it finds that the party to be sanctioned “acted with substantial justification or that other circumstances make the imposition of the sanction unjust.” (CCP ;; 2030.290(c), 2031.300(c).)

The Court finds that sanctions against only Plaintiff is appropriate here. While Plaintiff was in the process of substituting attorneys, the pattern in this case provides that Plaintiff was granted ample time to respond to discovery. From the date of service, Plaintiff had approximately four months to provide responses. It is not unjust in this case to impose sanctions.

IV. CONCLUSION

Defendants’ Motion to Compel Responses to Special Interrogatories (Set One) is moot, because Plaintiff provided such responses on April 8, 2021.

Plaintiff is sanctioned in the amount of $3,311.65.

Defense to give notice.

DATED: May 24, 2021

_____________________

Bernie C. LaForteza

Judge of the Superior Court



Case Number: *******0375    Hearing Date: March 23, 2021    Dept: U

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

AHRON ZILBERSTEIN, et al.,

Plaintiffs,

vs.

IRA LEIBOWITZ, et al.,

Defendants.

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CASE NO: *******0375

[TENTATIVE] ORDER RE: CLASS 5 ENTITIES’ MOTION SUMMARY ADJUDICATION ON PLAINTIFFS’ FIFTH CAUSE OF ACTION IN THE SECOND AMENDED COMPLAINT

Dept. U

8:30 a.m.

March 23, 2021

I. BACKGROUND

This is a fraud and breach of fiduciary duty action arising out of allegations involving a breach of partnership.

On March 19, 2019, Plaintiffs Ahron Zilberstein (“Zilberstein”), 72 Van Nuys, LLC (“72 Van Nuys”), 6360 Van Nuys, LLC (“6360 Van Nuys”), E&N Financial Services & Development, Inc., a/k/a E.N. Financial Services and Development, Inc. (“E&N”) (collectively “Plaintiffs”) filed their initial complaint Defendants Ira Leibowitz (“Ira”), Amy Leibowitz (“Amy”), Toby Kirsch (“Kirsch”), Stephen Schwarz (“Schwarz”), Chaim Raskin (“Raskin”), Division Six Sport, Inc. (“Division Six”), Class Five Trading, LLC – California (“CA CFT”), Class Five Trading, LLC – Delaware (“DE CFT”), Class Five Holdings, LLC – California (“CA CFH”), Class Five Holdings, LLC – Delaware (“DE CFH”), Seven Wells, LLC (“Seven Wells”), all persons known or unknown claiming any legal or equitable interest in property (collectively “Defendants”), and Does 1 through 200. The initial complaint contained 10 causes of action.

On July 25, 2019, Plaintiffs filed their first amended complaint (“FAC”).

On February 28, 2020, the Court sustained in part and overruled in part demurrers to the FAC.

On March 30, 2020, Plaintiffs filed their operative second amended complaint (“SAC”), alleging claims for: (1) breach of partnership agreement; (2) breach of fiduciary duty; (3) fraud; (4) conspiracy to commit breach of fiduciary duty; (5) accounting; (6) common count – goods and services rendered; (7) common count – open book account; (8) imposition of equitable lien; (9) judicial foreclosure of deed of trust; and (10) judicial foreclosure of deed of trust.

On September 2, 2020, the Court sustained in part and overruled in part demurrers to the SAC.

Relevant for the purposes of this motion, the only remaining claim against CA CFT, DE CFT, CA CFH, and DE CFH (collectively “Class 5 Entities”) is the fifth cause of action for accounting. (See SAC ¶¶ 86-94.)

Class 5 Entities now move for summary adjudication on Plaintiffs’ fifth cause of action against them on the grounds that the requisite relationship to state an accounting claim against them does not exist.

Plaintiffs oppose, arguing that the motion is procedurally defective and the Court should not reward Class 5 Entities for their dilatory discovery conduct.

Class 5 Entities filed a reply.

As set forth further below, the Court grants Class 5 Entities’ motion.

II. LEGAL STANDARD

The purpose of a motion for summary judgment or summary adjudication “is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 (Aguilar).) “Code of Civil Procedure section 437c, subdivision (c), requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.)

“In ruling on the motion, the court must consider all of the evidence and all of the inferences reasonably drawn therefrom [citation] and must view such evidence [citations] and such inferences [citations] in the light most favorable to the opposing party.” (Aguilar, supra, 25 Cal.4th at pp. 844-845, quotation marks omitted.)

“On a motion for summary judgment, the initial burden is always on the moving party to make a prima facie showing that there are no triable issues of material fact.” (Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519.)

A defendant moving for summary judgment or summary adjudication “has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action . . . cannot be established, or that there is a complete defense to the cause of action.” (Code Civ. Proc., ; 437c, subd. (p)(2).) “Once the defendant . . . has met that burden, the burden shifts to the plaintiff . . . to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.” (Ibid.) “If the plaintiff cannot do so, summary judgment should be granted.” (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463, 467.)

III. DISCUSSION

a. Evidentiary objections

Only Plaintiffs assert evidentiary objections, which are procedurally defective.

Although Plaintiffs do file a proposed order that is required, Plaintiffs did not file a separate document of objections, i.e., two documents. (Cal. Rules of Court, rule 3.1354(b)-(c).) Accordingly, the Court does not rule on Plaintiffs’ improper objections. (Hodjat v. State Farm Mutual Automobile Ins. Co. (2012) 211 Cal.App.4th 1, 9 [trial court not required to give a second chance at filing properly formatted papers].) In any event, had Plaintiffs filed the objections properly, the Court would have overruled them all. The declarants have the necessary knowledge to state facts about Class 5 Entities’ formation and operations and their own interest in the various entities. Plaintiffs’ objections are otherwise unexplained.

b. The motion does not violate Code of Civil Procedure section 437c, subdivision (t)

Plaintiffs argue that this motion is procedurally defective under Code of Civil Procedure section 437c, subdivision (t).

If special statutory conditions are met, pursuant to the stipulation of the parties, the court may summarily adjudicate any legal issue or a claim for damages (other than punitive damages) that does not completely dispose of a cause of action, an affirmative defense, or an issue of duty. (Code of Civ. Proc. 437c, subd. (t).)

Plaintiffs’ argument is without merit. The motion completely disposes a cause of action against Class 5 Entities. Whether Plaintiffs can continue their claim against other named defendants does not mean that Class 5 Entities needed to invoke the special procedure under Code of Civil Procedure section 437c, subdivision (t). If Plaintiffs’ argument had merit, then that would mean that a plaintiff can escape summary adjudication by strategically asserting the same cause of action against multiple defendants with at least one unable to defeat it on motion practice before trial. That is not how Code of Civil Procedure section 437c operates.

c. There is no triable issue of fact

Class 5 Entities argue that Plaintiffs’ accounting claim against them fails because there is no requisite relationship to state a claim.

“A cause of action for accounting requires a showing of a relationship between the plaintiff and the defendant, such as a fiduciary relationship, that requires an accounting or a showing that the accounts are so complicated they cannot be determined through an ordinary action at law.” (Fleet v. Bank of America N.A. (2014) 229 Cal.App.4th 1403, 1413.)

Here, Class 5 Entities proffer sufficient evidence to meet their initial burden. In short, Class 5 Entities do not have any relationship with Zilberstein, who does not claim to be a partner in these entities. (See Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 910.) Even if Plaintiffs’ allegations are true that Division Six sold all or substantially all of its assets to the Class 5 Entities for less than fair market value, this sounds in a claim for fraudulent transfer or conveyance, not accounting.

Plaintiffs do not rebut the shifted burden. Plaintiffs’ disputes to the separate statement is unpersuasive. The undisputed material facts are sufficiently supported by declarations, which are based on sufficient personal knowledge. The fact that there is no supporting articles of incorporation is immaterial. In any event, Plaintiffs do not proffer any evidence of their own to show a triable issue of fact. Plaintiffs cannot otherwise cite to their pleadings of a claimed equitable ownership interest to do so. (See Roman v. BRE Properties, Inc. (2015) 237 Cal.App.4th 1040, 1054 [“Citation to their own pleading is meaningless: It is fundamental that to defeat summary judgment a plaintiff must show ‘specific facts’ and cannot rely on allegations of the complaint.”].)

Because there is no triable issue of material fact, summary adjudication is appropriate.

d. A continuance is not warranted

Plaintiffs contend that summary adjudication is inappropriate because there is outstanding discovery due to Class 5 Entities’ dilatory discovery conduct. Although Plaintiffs ask the Court to deny the motion on this basis, this argument sounds more as a request for a continuance.

There is a special procedure for a continuance of a hearing on a motion for summary judgment or adjudication and this procedure requires a declaration showing facts to justify opposition may exist. (See Code Civ. Proc., ; 437c, subd. (h).)

The Court denies Plaintiffs’ generic request. Simply put, Plaintiffs do not meet their burden to show how an allowance of extra time would change any of the facts necessary to defeat this motion. Plaintiffs’ declaration does not even attach some of the outstanding discovery requests, and instead merely includes a cover email. Additionally, although the Court acknowledges some pauses in discovery because of a protective order and motion practice, Plaintiffs waited multiple months before making certain discovery requests and there is no reasonable justification for this delay because the discovery requests are largely duplicative of previous discovery requests. (See Rodriguez v. Oto (2013) 212 Cal.App.4th 1020, 1038.)

IV. CONCLUSION

The Court grants Class 5 Entities’ motion for summary adjudication.

Moving parties are ordered to give notice of the Court’s ruling.

DATED: March 23, 2021 

_____________________ 

Hon. Bernie C. LaForteza

Judge of the Superior Court 



Case Number: *******0375    Hearing Date: February 18, 2021    Dept: U

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

AHRON ZILBERSTEIN, et al.,

Plaintiff,

vs.

IRA LEIBOWITZ, et al.,

Defendant(s).

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CASE NO: *******0375

[TENTATIVE] ORDER RE: DEFENDANTS’ MOTION FOR EQUITABLE RELIEF FROM ZILBERSTEIN’S NDA’S

Dept. U

8:30 a.m.

February 18, 2021

I. BACKGROUND

Ahron Zilberstein (Zilberstein), 72 Van Nuys, LLC (72 Van Nuys), 6360 Van Nuys, LLC, E&N Financial Services & Development, Inc., a/k/a E.N. Financial Services and Development, Inc. (E&N), (collectively, Plaintiff) initiated this action against Ira Leibowitz (Ira), Amy Leibowitz, Toby Kirsch (Kirsch), Stephen Schwarz, Chaim Raskin, Division Six Sport, Inc. (Division Six), Class Five Trading, LLC - California, Class Five Trading, LLC – Delaware, Class Five Holdings, LLC – California, Class Five Holdings, LLC – Delaware, Seven Wells, LLC, all persons known or unknown claiming any legal or equitable interest in property (collectively, Defendants), and Does 1 through 220, on March 19, 2019.

On March 30, 2020, Plaintiff filed their operative second amended complaint (SAC), alleging claims for: (1) breach of partnership agreement; (2) breach of fiduciary duty; (3) fraud; (4) conspiracy to commit breach of fiduciary duty; (5) accounting; (6) common count – goods and services rendered; (7) common count – open book account; (8) imposition of equitable lien; (9) judicial foreclosure of deed of trust; and (10) judicial foreclosure of deed of trust.

On September 17, 2020, Ira and Kirsch filed a cross-complaint against Plaintiffs and Roes 1 through 25, alleging claims for: (1) breach of partnership agreement; (2) partnership contribution; (3) conversion; (4) breach of fiduciary duty; (5) breach of oral agreement; (6) accounting; (7) breach of written contract; and (8) violation of Civil Code sections 2941 and 2943.

On January 26, 2021, Defendants filed this motion for equitable relief from the non-disclosure agreements (NDA’s) between Zilberstein and third-parties pursuant to Code of Civil Procedure section 526(a)(1)(2) and (6). Defendants move on the grounds that these NDA’s are preventing them from properly and fully investigating and gathering evidence in furtherance of their defense.

II. LEGAL STANDARD & DISCUSSION

a. Request for Judicial Notice

Defendants request judicial notice be taken of: (1) the search results from the Los Angeles (LA) Superior Court’s webpage for “Ahron Zilberstein”; (2) search results from the LA Superior Court’s webpage for “E&N Financial”; (3) the February 14, 2013 complaint filed in Orange County Superior Court in case number 30-2013-00630523-CU-FR-CJC; (4) the June 10, 2015 Notice of Application and Application for Authority to Compromise Controversy between Deborah and Eric Chen and Zilberstein, including exhibits, in case number 1:14-bk-15412-VK; (5) Lexis search results for Cohen v. Zilberstein in LA Superior Court case number 211077; and (6) the March 26, 2013 complaint filed in LA Superior Court case number BC503885.

Evidence Code section 452(d) authorizes judicial notice of “[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States.” Thus, as court records of the state of California, judicial notice is taken of items one through four and six.

Evidence Code section 452(h) authorizes judicial notice of “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” Thus, as the search results are readily verifiable from Lexis, which is a source of reasonably indisputable accuracy, judicial notice is taken of number six.

b. Equitable Relief

Code of Civil Procedure section 526(a)(1)(2) and (6) provides:

(a) An injunction may be granted in the following cases:

(1) When it appears by the complaint that the plaintiff is entitled to the relief demanded, and the relief, or any part thereof, consists in restraining the commission or continuance of the act complained of, either for a limited period or perpetually.

(2) When it appears by the complaint or affidavits that the commission or continuance of some act during the litigation would produce waste, or great or irreparable injury, to a party to the action.

(6) Where the restraint is necessary to prevent a multiplicity of judicial proceedings.

Defendants seek information from Zilberstein’s former business associates, partners, and victims to prove how Zilberstein conducts business. Defendants argue this information is relevant as admissible evidence of Zilberstein’s habits, routines, course of dealing, or for impeachment. Defendants contend this information will reveal Zilberstein’s other similar transactions and, thus, are within the scope of discovery under Code of Civil Procedure section 2017.010.

A search of the LA Superior Court’s website has identified 35 individuals who might have knowledge of Zilberstein’s business practices that are relevant to Plaintiffs’ third cause of action for fraud. Defendants want to interview 19 of the 35 individuals in furtherance of their defense, but these individuals are subject to NDA’s preventing them from disclosing information about Zilberstein and any documents they retained. Consequently, Defendants seek an injunction from the Court preventing Zilberstein from suing these 19 individuals if they breach their NDA’s with him by being interviewed by Defendants.

Defendants reason Zilberstein is likely to file suit against anyone subject to a NDA with him based on his historically litigious nature. Defendants have not seen the NDA’s nor has Zilberstein explained why Defendants cannot speak with those subject to them.

Despite Defendants’ arguments, they have not provided any legal authority supporting the use of Code of Civil Procedure section 525(a)(1)(2) and (6) to protect a party to a NDA from litigation if in breach. While Defendants argue that the contents of contracts are not privileged, they have failed to state specifically what type of information they expect to gather from the 19 witnesses and how it would further their defense. Nor do Defendants explain why they suspect the 19 specific witnesses have the information they seek.

Therefore, the Court does not find Defendants’ motion persuasive.

III. CONCLUSION

For the foregoing reasons, Defendants’ motion for equitable relief from Zilberstein’s NDA’s with third-parties is DENIED.

Zilberstein is ordered to give notice of the Court’s ruling.

DATED: February 17, 2021 

_____________________ 

Hon. Bernie C. LaForteza

Judge of the Superior Court 



Case Number: *******0375    Hearing Date: September 01, 2020    Dept: U

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

AHRON ZILBERSTEIN, et al.,

Plaintiff,

vs.

IRA LEIBOWITZ, et al.,

Defendant(s).

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CASE NO: *******0375

[TENTATIVE] ORDER RE: DEFENDANTS’ DEMURRER TO THE SECOND AMENDED COMPLAINT’S FOURTH, NINTH, AND TENTH CAUSES OF ACTION

Dept. U

8:30 a.m.

September 1, 2020

I. BACKGROUND

Ahron Zilberstein (Zilberstein), 72 Van Nuys, LLC (72 Van Nuys), 6360 Van Nuys, LLC, E&N Financial Services & Development, Inc., a/k/a E.N. Financial Services and Development, Inc. (E&N), (collectively, Plaintiff) initiated this action against Ira Leibowitz (Ira), Amy Leibowitz, Toby Kirsch, Stephen Schwarz, Chaim Raskin, Division Six Sport, Inc. (Division Six), Class Five Trading, LLC - California, Class Five Trading, LLC – Delaware, Class Five Holdings, LLC – California, Class Five Holdings, LLC – Delaware, Seven Wells, LLC, all persons known or unknown claiming any legal or equitable interest in property (collectively, Defendants), and Does 1 through 220, on March 19, 2019.

On February 28, 2020, the Court heard Defendants’ demurrer to Plaintiffs’ first amended complaint (FAC). The Court overruled the demurrer as to the first, second, third, fifth, sixth, and seventh causes of action, sustained the demurrer with leave to amend as to the fourth, ninth, tenth, and eleventh causes of action, and sustained the demurrer without leave to amend as to the eighth cause of action.

On March 30, 2020, Plaintiff filed their second amended complaint (SAC), alleging claims for: (1) breach of partnership agreement; (2) breach of fiduciary duty; (3) fraud; (4) conspiracy to commit breach of fiduciary duty; (5) accounting; (6) common count – goods and services rendered; (7) common count – open book account; (8) imposition of equitable lien; (9) judicial foreclosure of deed of trust; and (10) judicial foreclosure of deed of trust.

On April 29, 2020, Defendants filed this demurrer to the SAC’s fourth, ninth, and tenth causes of action pursuant to Code of Civil Procedure section 430.10(e). Defendants move on the grounds that the fourth cause of action fails to plead facts constituting conspiracy and the ninth and tenth causes of action are barred by the statute of limitations.

II. LEGAL STANDARD

a. Demurrer

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice. (Code Civ. Proc., ; 430.30(a).) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Ibid.) The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action. (Hahn v. Mirda, supra, at p. 747.)

b. Leave to Amend

“Where the defect raised by a motion to strike or by demurrer is reasonably capable of cure, leave to amend is routinely and liberally granted to give the plaintiff a chance to cure the defect in question.” (CLD Construction, Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1146.)

III. DISCUSSION

a. Meet & Confer Requirement

Before filing a demurrer or motion to strike, the moving party is required to meet and confer with the party who filed the pleading for the purposes of determining whether an agreement can be reached through the filing of an amended pleading that would resolve the objections to be raised in the demurrer. (Code Civ. Proc., ;; 430.41 & 435.5.) Defendants satisfied this requirement.

b. Fourth Cause of Action – Conspiracy to Commit Breach of Fiduciary Duty

Conspiracy is not an independent, tortious cause of action. (Favila v. Katten Muchin Rosenmann LLP (2010) 188 Cal.App.4th 189, 206.) Conspiracy accompanies another tort to impose liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration. (Patrick v. Alacer Corp. (2008) 167 Cal.App.4th 995, 1016, fn. 11.) It must be shown that Defendants “had knowledge of and agreed to both the objective and the course of action that resulted in injury, that there was a wrongful act committed pursuant to that agreement, and that there was resulting damage.” (Berg & Berg Enterprises, LLC v. Sherwood Partners, Inc. (2005) 131 Cal.App.4th 802, 823.)

Here, Plaintiffs allege that Defendants knew Zilberstein was Ira’s partner in Division 6, thereby, entitling him to the benefits of the partnership, and that it was Ira pursued his intent, desire, and goal to breach his fiduciary duty to Zilberstein by selling Division 6’s assets to Class 5 for little to no consideration. (FAC, ¶ 82.) These facts show that Defendants had knowledge of Ira’s objective and planned course of action in breaching his fiduciary duty to Zilberstein.

Next, Plaintiffs pled that Defendants “agreed and conspired with IRA to sell the assets of Division 6 and deprive Zilberstein of the benefits of his partnership right through the vehicle of the sale of the Division 6 assets to Class 5.” (Ibid.) This allegation asserts that Defendants not only knew of, but agreed to, Ira’s planned breach of his fiduciary duty to Zilberstein. The wrongful act committed pursuant to this agreement was the sale of Division 6’s assets to Class 5 and the injury was Zilberstein’s loss of his interest totaling more than $9,571,101.02. (Id., ¶ 84.) Therefore, Plaintiffs have pled adequate facts constituting this cause of action.

Defendants’ contention that Plaintiffs provide no factual support for Defendants being officer, directors, shareholders, or independent contracts of Division 6 is inconsequential because this allegation is not used to establish the required elements of conspiracy. Moreover, simply because Zilberstein was a “silent partner” in Division 6, does not necessarily mean the Defendants were ignorant of his investment in the company. A silent partner usually invests money into a company without participating in the company’s management operations. Simply because Zilberstein was not actively participating in Division 6’s operations does not equate to Defendants being ignorant of his investment.

Demurrer to this cause of action is overruled.

c. Ninth Cause of Action – Judicial Foreclosure of Deed of Trust – Corinthian Property

A cause of action for judicial foreclosure of a mortgage or deed of trust is subject to the four-year statute of limitations set forth in Code of Civil Procedure section 337(c). (Flack v. Boland (1938) 11 Cal.2d 103, 106.) A court may equitably toll the statute of limitations if three elements are satisfied: (1) timely notice to the defendant in filing the first claim; (2) lack of prejudice to defendant in gathering evidence to defend against the second claim; and, (3) good faith and reasonable conduct by the plaintiff in filing the second claim.” (Collier v. City of Pasadena (1983) 142 Cal.App.3d 917, 924.) In California, equitable tolling has been recognized only in the following limited situations: (1) while the plaintiff is pursuing an alternative remedy in another forum; (2) under narrow circumstances while the plaintiff is pursuing the same remedy in the same forum; (3) while the defendant fraudulently conceals the cause of action; and (4) in certain actions against an insurer. (Turner & Banke, Cal. Practice Guide: Civil Procedure Before Trial Statute of Limitations (The Rutter Group 2017), ¶ 6:5.)

To invoke delayed discovery or fraudulent concealment, Plaintiff must allege “(1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 808; Baker v. Beech Aircraft Corp. (1974) 39 Cal.App.3d 315, 321.)

Here, E&N alleged Ira breached the Personal Guaranty Agreement by failing to make the payment of $275,000 on or before September 7, 2014. (SAC ¶125.) E&N did not file the instant action until March 19, 2019, more than four years later. However, Plaintiffs also allege that Zilberstein and Ira agreed that the Personal Guaranty Agreement would be included in the accounting of the debits and credits between the parties. (Id., ¶119.) Zilberstein claims he relied on this representation in choosing not to pursue his claim under the promissory note and Deed of Trust sooner. Thereby, it was Ira’s continual delaying of the accounting that concealed Plaintiffs’ need to foreclose on the Deed of Trust because of Ira’s representations that it was destined to be resolved in the eventual accounting.

Plaintiffs plead that it was in September 2017 that Ira and Zilberstein met at a restaurant for a scheduled inspection of the books and records pertaining their partnership agreement. It was at this meeting that Ira affirmatively refused the accounting and disavowed their partnership. (SAC, ¶ 34.) Consequently, if it was Ira’s continual delay of the accounting, of which the Deed of Trust was said to be a part, that concealed Ira’s wrongful conduct, then the statute of limitations would have begun to run in September 2017 when Zilberstein discovered that Ira was not going to honor the Deed of Trust. This action was initiated in 2019, within four years of September 2017, when the statute of limitations began to run. Plaintiffs have pled sufficient facts showing that the statute of limitations was tolled from September 2014 to September 2017 because of Ira’s misrepresentations.

Demurrer to this cause of action is overruled.

d. Tenth Cause of Action – Judicial Foreclosure of Deed of Trust – Noeline Property

The same legal standards apply to the timeliness of Plaintiff’s claim with respect to foreclosure on the Noeline Property. 72 Van Nuys alleged that Ira breached the Personal Guaranty Agreement by failing to make the payment of $1,200,000 by September 20, 2014, and $1,000,000 by December 31, 2014. (SAC ¶142.) 72 Van Nuys did not file the instant action until March 19, 2019, more than four years later.

As with the Deed of Trust for the Corinthian Property, Plaintiffs have successfully pled that there was a tolling of the four-year limitations period from September 1924 through September 2017 while Zilberstein reasonably relied on Ira’s misrepresentation that the Deed of Trust would be resolved through the accounting. When he learned otherwise in September 2017, Zilberstein initiated his action within less than four years thereafter, thus asserting his claims within the relevant statute of limitations. Again, Plaintiffs have pled enough facts to show that the statute of limitations was tolled from September 2014 to September 2017 because of Ira’s misrepresentations.

For the same reasons as are explained above, Defendants’ demurrer to this cause of action is overruled.

IV. CONCLUSION

For the foregoing reasons, Defendants’ demurrer to the fourth, ninth, and tenth causes of action of Plaintiffs’ SAC is OVERRULED.

Plaintiffs are ordered to give notice of the Court’s ruling.

DATED: September 1, 2020

_____________________

Hon. Theresa M. Traber

Judge of the Superior Court



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