This case was last updated from Los Angeles County Superior Courts on 07/28/2020 at 20:06:48 (UTC).

SCHLOMO SCHMUEL VS. CASPAR MANAGEMENT GROUP, LLC

Case Summary

On 12/20/2017 SCHLOMO SCHMUEL filed a Contract - Other Contract lawsuit against CASPAR MANAGEMENT GROUP, LLC. 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 and THERESA M. TRABER. The case status is Pending - Other Pending.
Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****6625

  • Filing Date:

    12/20/2017

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

SHIRLEY K. WATKINS

THERESA M. TRABER

 

Party Details

Plaintiffs

SCHMUEL SCHLOMO

SCHLOMO SCHMUEL D.P.M. INC. A CALIFORNIA CORPORATION

Defendant

CASPAR MANAGEMENT CO. LLC A CALIFORNIA LIMITED LIABILITY COMPANY

Attorney/Law Firm Details

Plaintiff Attorney

QUINTANA ANDRES FELIPE

Defendant Attorney

ISAACS BARAK

 

Court Documents

Proof of Service (not Summons and Complaint)

2/14/2020: Proof of Service (not Summons and Complaint)

Motion for Terminating Sanctions

2/14/2020: Motion for Terminating Sanctions

Request for Judicial Notice

2/14/2020: Request for Judicial Notice

Motion to Be Relieved as Counsel

2/19/2020: Motion to Be Relieved as Counsel

Declaration in Support of Attorney's Motion to Be Relieved as Counsel-Civil

2/19/2020: Declaration in Support of Attorney's Motion to Be Relieved as Counsel-Civil

Minute Order - MINUTE ORDER (STATUS CONFERENCE RE MEDIATION/ADR)

2/26/2020: Minute Order - MINUTE ORDER (STATUS CONFERENCE RE MEDIATION/ADR)

Notice - NOTICE OF CONTINUED HEARING DATE

2/27/2020: Notice - NOTICE OF CONTINUED HEARING DATE

Notice Re: Continuance of Hearing and Order

3/16/2020: Notice Re: Continuance of Hearing and Order

Notice Re: Continuance of Hearing and Order

3/16/2020: Notice Re: Continuance of Hearing and Order

Notice Re: Continuance of Hearing and Order

3/16/2020: Notice Re: Continuance of Hearing and Order

Opposition - OPPOSITION TO MOTION FOR TERMINATING SANCTIONS

3/16/2020: Opposition - OPPOSITION TO MOTION FOR TERMINATING SANCTIONS

Minute Order - MINUTE ORDER (COURT ORDER RE CONTINUANCE)

3/30/2020: Minute Order - MINUTE ORDER (COURT ORDER RE CONTINUANCE)

Certificate of Mailing for - CERTIFICATE OF MAILING FOR (COURT ORDER RE CONTINUANCE) OF 03/30/2020

3/30/2020: Certificate of Mailing for - CERTIFICATE OF MAILING FOR (COURT ORDER RE CONTINUANCE) OF 03/30/2020

Notice Re: Continuance of Hearing and Order

4/14/2020: Notice Re: Continuance of Hearing and Order

Notice Re: Continuance of Hearing and Order

4/14/2020: Notice Re: Continuance of Hearing and Order

Notice Re: Continuance of Hearing and Order

4/14/2020: Notice Re: Continuance of Hearing and Order

Notice Re: Continuance of Hearing and Order

4/14/2020: Notice Re: Continuance of Hearing and Order

Notice Re: Continuance of Hearing and Order

4/14/2020: Notice Re: Continuance of Hearing and Order

164 More Documents Available

 

Docket Entries

  • 10/27/2020
  • Hearing10/27/2020 at 08:30 AM in Department U at 6230 Sylmar Ave., Van Nuys, CA 91401; Hearing on Motion for Order DIrecting Compliance with Subpoena

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  • 09/03/2020
  • Hearing09/03/2020 at 08:30 AM in Department U at 6230 Sylmar Ave., Van Nuys, CA 91401; Trial Setting Conference

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  • 09/03/2020
  • Hearing09/03/2020 at 08:30 AM in Department U at 6230 Sylmar Ave., Van Nuys, CA 91401; Hearing on Motion for Sanctions

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  • 09/03/2020
  • Hearing09/03/2020 at 08:30 AM in Department U at 6230 Sylmar Ave., Van Nuys, CA 91401; Post-Mediation Status Conference

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  • 07/20/2020
  • DocketNotice (of Entry of Order); Filed by Schlomo Schmuel (Plaintiff); Schlomo Schmuel D.P.M., Inc., a California Corporation (Plaintiff)

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  • 07/16/2020
  • DocketSeparate Statement; Filed by Caspar Management Co., LLC, a California Limited Liability Company (Defendant)

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  • 07/16/2020
  • DocketMotion re: (DIrect Complaince with Subpoena); Filed by Caspar Management Co., LLC, a California Limited Liability Company (Defendant)

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  • 07/06/2020
  • DocketNotice Re: Continuance of Hearing and Order; Filed by Clerk

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  • 07/06/2020
  • DocketNotice Re: Continuance of Hearing and Order; Filed by Clerk

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  • 07/06/2020
  • DocketNotice Re: Continuance of Hearing and Order; Filed by Clerk

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293 More Docket Entries
  • 03/21/2018
  • DocketReply; Filed by Caspar Management Co., LLC, a California Limited Liability Company (Defendant)

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  • 03/20/2018
  • DocketNotice; Filed by Schlomo Schmuel (Plaintiff); Schlomo Schmuel D.P.M., Inc., a California Corporation (Plaintiff)

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  • 03/16/2018
  • DocketAmendment to Complaint (Fictitious/Incorrect Name); Filed by Plaintiff

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  • 03/13/2018
  • DocketResponse; Filed by Schlomo Schmuel (Plaintiff); Schlomo Schmuel D.P.M., Inc., a California Corporation (Plaintiff)

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  • 03/08/2018
  • DocketAnswer; Filed by Caspar Management Co., LLC, a California Limited Liability Company (Defendant)

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  • 03/08/2018
  • DocketNotice of Related Case; Filed by Caspar Management Co., LLC, a California Limited Liability Company (Defendant)

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  • 02/15/2018
  • DocketProof of Service of Summons and Complaint; Filed by Schlomo Schmuel (Plaintiff); Schlomo Schmuel D.P.M., Inc., a California Corporation (Plaintiff)

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  • 12/20/2017
  • DocketComplaint; Filed by Schlomo Schmuel (Plaintiff); Schlomo Schmuel D.P.M., Inc., a California Corporation (Plaintiff)

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  • 12/20/2017
  • DocketSummons-Issued

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  • 12/20/2017
  • DocketNotice of Case Management Conference; Filed by null

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Tentative Rulings

b"

Case Number: ****6625 Hearing Date: October 15, 2021 Dept: U

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT

SCHLOMO SCHMUEL, an individual; SCHLOMO SCHMUEL D.P.M., INC., a California corporation,

Plaintiff,

vs.

CASPAR MANAGEMENT CO., LLC, a California limited liability company; and DOES 1 through 10, inclusive,

Defendants.

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CASE NO: ****6625

[TENTATIVE] ORDER RE: PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, FOR SUMMARY ADJUDICATION

Dept. U

8:30 a.m.

October 15, 2021

I. BACKGROUND

This is an indemnification action wherein plaintiffs Schlomo Schmuel (Schmuel) and Schlomo Schmuel D.P.M., Inc. (DPM) allege defendant Caspar Management Co., LLC agreed to purchase from plaintiffs real property located at 2210 East Highland Ave., San Bernardino, CA 92404 (the Highland Property), but that defendant has failed to fairly share the financial burdens realized by plaintiff as a consequence of the parties’ alleged transaction. On March 24, 2021, plaintiffs field their initial complaint, and on July 6, 2021, plaintiffs filed their first amended complaint (FAC) against Caspar and Does 1 through 10, alleging (1) implied indemnity and (2) money lent, paid or extended.

On July 6, 2021, plaintiffs filed their motion for summary judgment in favor of plaintiffs on their claims made against defendant in the FAC or, in the alternative, an order granting summary adjudication in plaintiffs’ favor as to both causes of action contained in the FAC and on the issue that defendant owed a duty to plaintiff Schmuel to identify him regarding the Highland Property. Plaintiffs also filed a request for judicial notice (RJN).

On September 3, 2021, defendant filed its opposition to plaintiffs’ motion and RJN, and on September 15, 2021, plaintiffs filed reply.

II. LEGAL STANDARD

The purpose of a motion for summary judgment “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. Atl. Richfield Co. (2001) 25 Cal.4th 826, 843 (Aguilar).) Under Code of Civil Procedure section 437c(c), the trial judge is required “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.)

As to each claim as framed by the complaint, a plaintiff moving for summary judgment satisfies its burden of proof by presenting facts to prove each element of the cause of action entitling the party to judgment on the cause of action. (Code Civ. Proc. ; 437c(p)(1).) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.) Once the plaintiff has met its burden, the burden shifts to the defendant to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. (Code Civ. Proc. ; 347c(p)(1).)

To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence that would allow a reasonable trier of fact to find in their favor. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166 (Sangster).) Upon such a showing, summary judgment should be denied. (Aguilar, supra, 25 Cal.4th at p. 850.)

“When deciding whether to grant summary judgment, the court must consider all of the evidence set forth in the papers, except evidence to which the court has sustained an objection, as well as all reasonable inferences that may be drawn from that evidence, in the light most favorable to the party opposing summary judgment.” (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463, 467; Code Civ. Proc., ; 437c(c).)

III. OBJECTIONS

Plaintiff’s objections Nos. 1—27 are overruled.

IV. REQUESTS FOR JUDICIAL NOTICE

a. Plaintiffs’ RJN

On July 6, 2021, plaintiffs submitted RJN, asking that the Court take judicial notice pursuant to Evidence Code ;; 452 and 453 and California Rules of Court, Rules 3.1113(1) and 3.1306(c) of the following:

1. Exhibit 1: Acknowledgement of Satisfaction of Judgment filed in the Asante Action on May 4, 2011.

2. Exhibit 2: Complaint filed in the Los Angeles County Superior Court on August 14, 2018, in the case entitled Jeffrey A. Slott, APC v. Israel Basharel, Los Angeles County Superior Court, Case No. LC107666.

3. Exhibit 3: Complaint, filed in Caspar Management Co., LLC v. Asante Family Agency, Inc., San Bernardino County Superior Court, Case No. UDDS900992, on February 24, 2009 (hereinafter referred to as the “Asante Action”).

4. Exhibit 4: Request for Entry of Default and for Court Judgment filed in the Asante Action on April 21, 2009.

5. Exhibit 5: Declaration of Israel Basharel filed in the Asante Action on April 21, 2009.

6. Exhibit 6: Judgment by Court entered in the Asante Action on April 28, 2009.

7. Exhibit 7: Writ of Execution (Money Judgment) issued in the Asante Action on June 1, 2010.

8. Exhibit 8: Affidavit in Support of Application for Order of Appearance of Judgment Debtor Entity in the Asante Action on May 26, 2010.

9. Exhibit 9: Affidavit in Support of Application for Order of Appearance of Judgment Debtor Entity in the Asante Action on August 25, 2010.

These documents being properly noticeable under Evidence Code ;; 452 and 453, California Rules of Court, Rules 3.1113(1) and 3.1306(c), and Code of Civil Procedure ; 450, et seq., the Court grants plaintiffs’ request for judicial notice of the documents but not the truths of facts contained therein.

b. Defendant’s RJN

On September 3, 2021, defendant submitted RJN, asking that the Court take judicial notice pursuant to Evidence Code ; 452(d) of the following:

1. Exhibit A: Complaint, filed in related case Schlomo Schmuel et al. v. Israel Basharel, et al., Superior County, County of Los Angeles, Case Number LCl 03145, dated July

10, 2015.

2. Exhibit B: First Amended Complaint, filed in related case entitled Schlomo Schmuel et al. v. Israel Basharel, et al., Superior County, County of Los Angeles, Case Number, LC103145 dated September 9, 2015.

3. Exhibit C: Second Amended Complaint, filed in related case entitled Schlomo Schmuel et al. v. Israel Basharel, et al., LC103145, Superior County, County of Los Angeles, Case Number LC103145 dated March 24, 2017.

4. Exhibit D: Unlawful Detainer Complaint, case number UDFS1509110 (San Bernardino) captioned Schlomo Schmuel DPM Inc. v. Dynasty Organic Inc. filed on November 19, 2015.

5. Exhibit E: Plaintiffs Trial Brief, case number UDFS1509110 (San Bernardino) captioned Schlomo Schmuel DPM Inc. v. Dynasty Organic Inc. filed on December 22, 2015.

6. Exhibit F: Judgment filed in Unlawful Detainer Complaint, case number UDFS1509110 (San Bernardino) captioned Schlomo Schmuel DPM Inc. v. Dynasty Organic Inc. filed on December 22, 2015.

7. Exhibit G: Complaint, case number CIVDS 1903 803 (San Bernardino), captioned Schlomo Schmuel, an individual v. American Power Security Services, Inc., a California Corporation filed on February 4, 2019.

8. Exhibit H: Complaint, case number BC618960 (Superior County, County of Los Angeles) captioned Schlomo Schmuel D.P.M., Inc. v. Bank of America, N.A., filed on May 3, 2016.

9. Exhibit I: Complaint, case number CIVDSl 711995 (San Bernardino), captioned Bank of America v. Schlomo Schmuel DPM, Inc. filed on June 28, 2017.

10. Exhibit J: Court order on Caspar Management Co. LLC's Motion for Summary Judgment/Summary Adjudication dated May 10, 2021, Superior County, County of Los Angeles, Case Number ****6625.

11. Exhibit K: Court order dismissing Plaintiffs' tenth (10th) cause of action in related action Superior County, County of Los Angeles case number LC101345, dated March 26, 2021.

These documents being properly noticeable under Evidence Code ; 452(d) and Code of Civil Procedure ; 450, et seq., the Court grants defendant’s request for judicial notice of the documents but not the truths of facts contained therein.

V. DISCUSSION

In order to satisfy their burden for their motion for summary judgment as to each claim as framed by the FAC, plaintiffs must present facts to prove each element of the cause of action entitling the party to judgment on the cause of action. (Code Civ. Proc. ; 437c(p)(1).) Once plaintiffs have done so, the burden shifts to defendant to show that a triable issue of one or more material facts exists as to the causes of action or defenses thereto (Code Civ. Proc. ; 347c(p)(1).) Defendant may do so by presenting substantial responsive evidence that would allow a reasonable trier of fact to find in its favor, and this shall be sufficient to deny plaintiffs’ motion. (See Sangster, supra, 68 Cal.App.4th at p. 166; see also Aguilar, supra, 25 Cal.4th at p. 850.)

a. Plaintiffs allege the following in the FAC.

Plaintiffs allege the following in the FAC; for plaintiffs’ motion for summary judgment to be granted, therefore, plaintiffs must present facts to prove each of the following statements, insofar as the statement is essential to plaintiffs’ causes of action.

The sole and equal members and managers of defendant Caspar were Schmuel and Israel Basharel (Basharel), each with a 50% membership interest. (FAC, ¶¶ 5, 9.) As equal members and managers, Schmuel and Basharel agreed that Caspar would purchase the Highland Property, and that Caspar would receive or bear the profits and losses of such purchase by Caspar. (Id., at ¶ 9.) “In furtherance of that agreement … the Highland Property was purchased on or about April 7, 2008, for the approximate purchase price of $3,900,000.” (Id., at ¶ 10.)

In order to purchase the Highland Property, plaintiffs obtained a $3,120,000.00 loan, and there remained after the loaned amount a down payment due of approximately $780,000.00. (Id., at ¶ 11.) “[A]lthough title to the Highland Property was supposed to be vested in Caspar, it was vested in [DPM] because the lender was apparently not satisfied with the financial situation of [Basharel] or Caspar and, thus, required Plaintiffs, and others, to personally guarantee the Highland Loan.” (Id., at ¶ 13.) Plaintiffs paid the sum of $302,500.00 to the seller, which represented plaintiffs’ share of the down payment due. (Id., at ¶ 14.)

But Basharel “lacked sufficient funds to contribute his portion of the down payment towards the purchase of the Highland Property,” so Schmuel “paid the additional sum of $302,500.00 for [Basharel’s] portion of [the] down payment.” (FAC, ¶ 15.) In “consideration” for this, Basharel executed and delivered to Schmuel a note in the sum of $302,500. (Ibid.) On May 31, 2012, Basharel executed and delivered to Schmuel another note in the sum of $302,500.00, “in consideration for [Schmuel’s] forbearance in connection with his claims pursuant to the First Highland Note.” (Id., at ¶ 16.)

Basharel managed the Highland Property from its acquisition until about April 29, 2015, upon which time an attorney purporting to represent Basharel and Caspar indicated that neither Caspar nor Basharel “would manage the Highland Property any longer.” (FAC, ¶¶ 18—19.) Basharel, “through mismanagement and negligence, caused the serious deterioration with condition of the Highland Property.” (Id., at ¶ 20.) “Faced with … Defendant Caspar’s refusal to participate in the management of the Highland Property, Plaintiffs were forced to bear those burdens themselves, and from approximately April of 2015 to August of 2017, Plaintiffs incurred costs and expenses related to the Highland Property, including but not limited to mortgage and insurance payments, management and maintenance costs, and other fees and costs which were supposed to be borne either [sic] directly by Defendant Caspar.” (Id., at ¶ 21.)

“On or about August 25, 2017, in order to minimize additional injury the Plaintiffs were likely to suffer, Plaintiffs sold the Highland Property to an unrelated third-party in an arms-length transaction for [$1,700,000.00], far less than the total indebtedness then secured by the Highland Property, or approximately [$2,140,000.00].” (FAC, ¶ 22.) On or about August 25, 2017, plaintiffs paid $612,456.79 “[i]n order to cover the shortfall, and all outstanding charges, fees, commissions and other charges related to the sale of the Highland Property.” (Id., at ¶ 23.) In total, “plaintiffs have incurred costs and expenses related to the maintenance, management, and ultimate sale of the Highland Property” in an amount exceeding [$912,456.79.00].” (Id., at ¶ 24.)

As to plaintiffs’ implied contractual indemnity cause of action, “[Caspar] failed to pay their [sic] share of the costs and expenses related to the purchase, management, and sale of the Highland Property, as required by the agreements with [plaintiffs].” (FAC, ¶ 26.) “[Caspar’s] conduct contributed as a substantial factor in causing the [plaintiffs] harm, specifically, in forcing Plaintiffs to pay the costs and expenses related to the maintenance, management, and ultimate sale of the Highland Property, in an amount in excess of $912,456.79.” (Id., at ¶ 27.)

As to plaintiffs’ cause of action for money lent, paid, or expended, “[Caspar] is indebted to plaintiffs in consideration for amounts that plaintiff incurred for the benefit of defendant and the Highland property, as well as for amounts paid, laid out, and expended for defendant and the Highland Property at defendant’s special insistence and request. (FAC, ¶¶ 29—30.) For these, plaintiffs “seek an award of at least $912,456.79, with the exact amount to be proven at trial.” (Id., at ¶ 31.)

b. Plaintiffs have shown facts sufficient to prove their first and second causes of action for implied contractual indemnity and money lent, paid, or expended.

The essential elements to a cause of action for implied contractual indemnity are: (1) the indemnitor's breach of contractual duty owed to the indemnitee; (2) the absence of any participation by the indemnitee in the wrong; and (3) foreseeable damages as a result. (West v. Sup. Ct. (1994) 27 Cal.App.4th 1625, 1633.)

The essential elements to a cause of action for money lent, paid, or expended are: (1) that defendant is indebted to plaintiff in a certain sum; and (2) for money lent, paid or expended to, or for, the defendant. (Moya v. Northrup (1970) 10 Cal.App.3d 276, 280.)

Plaintiffs put forward as essential to their causes of action the purportedly undisputed material fact that Schmuel and Basharel “agreed that [Caspar] would purchase [the Highland Property].” (Motion, Separate Statement (SS), ¶ 79.) Plaintiffs also put forward the purportedly undisputed material facts that: Schmuel was required to personally guarantee certain the mortgage loan (Id. at ¶ 84.); and that “plaintiffs have incurred costs and expenses related to the maintence, management, and ultimate sale of the Highland Property… in an amount in excess of $912,456.79” (Id. at ¶ 107.) These facts are supported by plaintiffs’ evidence, especially the sworn declaration of Schmuel at paragraphs 3, 7, and 8. (Motion, evidence, pp. 6—10.)

Plaintiffs have hereby satisfied their initial burden for their motion for summary judgment, as plaintiffs have presented facts to prove the elements of their causes of action. (See Code Civ. Proc. ; 437c(p)(1).)

c. But defendant has satisfied its responsive burden of showing substantial responsive evidence that would allow a trier of fact to find in its favor.

Plaintiff’s having satisfied their burden, the burden shifts to defendants to show substantial responsive evidence that would allow a reasonable trier of fact to find in its favor.

In opposition to plaintiffs’ motion, defendant argues that a number of the purportedly undisputed facts are, in fact, disputed, especially that:

“Caspar did not own [the Highland Property], there was no agreement that Caspar was to be the purchaser of [the Highland Property] and [plaintiffs] did not incur any expenses ‘for Caspar’s benefit.’ Beginning in 2010, Highland was listed as an asset on DPM’s tax returns and [plaintiffs], not Caspar, began to realize all [tax benefits related to the Highland Property], including, but not limited to depreciation which was used to offset income DPM realized from other sources. At no time did [plaintiffs] reimburse any these tax benefits to Caspar … In June 2014, Basharel specifically asked Schmuel to transfer [the Highland Property] to Caspar and even had a deed drawn up for that purpose. Schmuel failed to sign the deed and avoided addressing the issue.” (Opposition, response to SS, ¶ 107.)

Defendant cites as evidence for these allegations the sworn declaration of Basharel, which states, inter alia, that: (a) DPM purchased the Highland Property (Basharel Dec., ¶ 4.); (b) Schmuel never informed Basharel and, therefore, never informed Caspar that extra loans were required to have been taken out by Schmuel due to Basharel or Caspar’s deficient financial situation (Id., at ¶ 5.); (c) Caspar was never asked to sign a promissory note in connection with any such loan (Id., at ¶ 6.); (d) Schmuel signed a deed of trust without Caspar’s knowledge where by Schmuel pledged the Highland Property as collateral for a multi-million dollar loan (Id., at ¶ 10.); and (e) Schmuel failed to ever sign a deed to transfer the Highland Property to Caspar (Id., at ¶ 11.).

This is substantial responsive evidence that would allow a reasonable trier of fact to find in defendant’s favor, especially as to: (a) the elements of breach of duty and absence of participation in the alleged indemnitee in the alleged wrong in plaintiff’s cause of action for implied contractual indemnity; and (b) the elements of indebtedness and that the debt was taken on for the benefit of the defendant in plaintiff’s cause of action for money lent, paid, or expended. It is also substantial responsive evidence that would allow a reasonable trier of fact to find in defendant’s favor on the issue that defendant owed a duty to plaintiff Schmuel to identify him regarding the Highland Property

Thus, this is sufficient to deny plaintiffs’ motion for summary judgment. (See Sangster, supra, 68 Cal.App.4th at p. 166; see also Aguilar, supra, 25 Cal.4th at p. 850.)

a. CONCLUSION

Plaintiffs’ Motion for Summary Judgment or, in the Alternative, for Summary Adjudication is DENIED.

Defendant ORDERED to give notice.

DATED: October 15, 2021

_____________________

Hon. Bernie C. LaForteza

Judge of the Superior Court

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b'

Case Number: ****6625 Hearing Date: September 20, 2021 Dept: U

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT

SCHLOMO SCHMUEL, an individual; SCHLOMO SCHMUEL D.P.M., INC., a California corporation,

Plaintiff,

vs.

CASPAR MANAGEMENT CO., LLC, a California limited liability company; and DOES 1 through 10, inclusive,

Defendants.

CASE NO: ****6625

[TENTATIVE] ORDER RE: DEFENDANT’S SEALING OF DECLARATIONS

Dept. U

8:30 a.m.

September 20, 2021

I. The protective order provides that parties may mark files “confidential” with fewer formal procedures, but parties might still seal a file under CRC Rule 2.551.

On September 5, 2018, the Court issued a protective order in this case, providing procedures by which the parties might designate materials filed with the Court as “confidential.” These procedures, as described in the protective order, are less formal than the procedures required when seeking a motion to seal. Notably, designating a document as confidential under the protective order does not require a noticed motion.

The protective order does not affect the parties’ abilities to seal files according to CRC Rule 2.551, and the protective order suggests that a party do so where the party feels their information should be considered not confidential but highly confidential. Nothing in the protective order affects the parties’ obligations to adhere to Rule 2.551 when filing a motion to seal.

An amendment to the protective order was issued on August 29, 2019 in order to expand the scope of the protective order as originally written and thereby account for this case being deemed related to Schmuel v. Basharel (Case No. 103145).

II. Defendant filed a sealed declaration without first filing a motion to seal.

On September 9, 2021, Defendant filed under seal a declaration of Barak Isaacs in support of Defendant’s opposition to Plaintiff’s motion for summary judgment.

As Defendant did not merely mark the declaration confidential according to the procedures laid out in the protective order but filed it under seal, all formal requirements of CRC Rule 2.551 apply to Defendant’s attempt to seal the declaration. These include that Defendant file a noticed motion, that Defendant serve the motion, that Defendant lodge his file under seal pending determination, and that Defendant provide redacted and unredacted versions of the document(s). The Court would then hold hearing on Defendant’s motion.

However, Defendant has not complied with these procedures, the most glaring of which is Defendant’s failure to file a motion before sealing the declaration.

III. The Court will continue hearing on the motion for summary judgment in order to hear motion and opposition on Defendant’s motion to seal.

For the foregoing reasons, hearing on Plaintiff’s motion for summary judgment is CONTINUED to October 15.

Defendant is ORDERED to resolve the issue of the improperly sealed declaration. The Court suggests Defendant do so by filing a motion to seal the declaration and complying with all relevant conditions of CRC Rule 2.551, upon which the Court will allow for new consideration of the issue.

DATED: September 20, 2021

_____________________

Bernie C. LaForteza

Judge of the Superior Court

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Case Number: ****6625    Hearing Date: May 10, 2021    Dept: U

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT

Schlomo Schmuel, et al.

Plaintiffs,

vs.

Caspar Management Group, LLC

Defendant.

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CASE NO: ****6625 (Related to Case LC103145)

[TENTATIVE] ORDER RE: DEFENDANT’S MOTION FOR SUMMARY JUDGMENT OR IN THE ALTERNATIVE SUMMARY ADJUDICAITON

Dept. U

8:30 a.m.

May 10, 2021

I. BACKGROUND

On December 20, 2017, Plaintiffs Schlomo Schmuel (“SS”) and Schlomo Schmuel D.P.M., Inc. (collectively “Plaintiffs”) filed a Complaint alleging causes of action for (1) express indemnity, (2) implied indemnity, (3) breach of implied-in-fact contract, (4) money lent, paid or expended, and (5) unjust enrichment/quasi-contract against Defendant Caspar Management Group, LLC (“Defendant”).

Defendant has two managers/owners/members, SS and Israel Basharel (“Israel”). (UMF 1.) SS and Israel agreed that Defendant would purchase, manage, and sell the commercial property located at 2210 E. Highland Avenue in San Bernardino, California (the “Property”). (Compl. ¶ 37.) Plaintiffs agreed to put down payment with one-half to be paid by SS and one-half to be paid by Plaintiffs on behalf of Israel, which was to be repaid. (Id.) In addition, Defendant was to manage the Property and Defendant would receive the profits and bear the losses related to the purchase, management and sale of the Property. (Id.) Defendant managed the Property from April 2008 until approximately April 29, 2015. (UMF 4.)

On or about April 29, 2015, an attorney, Jeffery Slott, purporting to represent both Israel and Defendant notified SS that neither Defendant nor Israel would manage the Property any longer. (Compl., ¶¶ 19, 21.) As a result of Defendant and Israel’s refusal to participate in management of the Property, Plaintiffs were forced to manage the Property from April 2015 to August 2017 and incur costs and expenses related to the Property totaling over $300,000. (Compl., ¶¶ 19, 21; UMF 6) Those costs and expenses included, but were not limited to, mortgage and insurance payments, management and maintenance costs, and other fees and costs which were supposed to be borne either directly by Defendant. (Id.) Defendant also failed to pay Plaintiffs the costs and expense incurred in relation to the purchase, management and sale of the Property. (Id. at 41.)

II. REQUEST FOR JUDICIAL NOTICE

Plaintiffs’ Request for Judicial Notice exhibits Nos. 1-8 are GRATNED, but not the truth asserted therein.

Defendant’s Requests for Judicial Notice of exhibits A-E are GRANTED, but not the truth asserted therein.

III. OBJECTIONS

Defendant’s Objections Nos. 33-51 are OVERRULED.

IV. 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.)  “Code of Civil Procedure section 437c, subdivision (c), requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inference 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, 119.)   

“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(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 fact exists as to the cause of action or a defense thereto.”  (Id.)  “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.)   

“When deciding whether to grant summary judgment, the court must consider all of the evidence set forth in the papers (except evidence to which the court has sustained an objection), as well as all reasonable inferences that may be drawn from that evidence, in the light most favorable to the party opposing summary judgment.”  (Id.; Code Civ. Proc. ; 437c(c).)  “An issue of fact can only be created by a conflict in the evidence.  It is not created by speculation, conjecture, imagination or guesswork.”  (Lyons v. Security Pacific National Bank (1995) 40 Cal.App.4th 1001, 1014 (citation omitted).)   

A party may move for summary adjudication as to one or more causes of action, affirmative defenses, claims for damages, or issues of duty if that party contends that there is no merit to the cause of action, defense, or claim for damages, or if the party contends that  there is no duty owed.  (See Code Civ. Proc. ; 437c(f)(1).)  “A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.”  (See id.)  A cause of action has no merit if: (1) one or more elements of the cause of action cannot be separately established, even if that element is separately pleaded, or (2) a defendant establishes an affirmative defense to that cause of action.  (See Code Civ. Proc. ; 437c(n); Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 583.)  Once the defendant has shown that a cause of action has no merit, the burden shifts to the plaintiff to show that a triable issue of material fact exists as to that cause of action.  (See Code Civ. Proc. ; 437c(o)(2); Union Bank 31 Cal.App.4th at 583.)   

V. DISCUSSION

Defendant contends that Plaintiffs’ causes of action in the Complaint are not tenable or are barred by the applicable statute of limitations.

a. Express Indemnity Cause of Action

Parties may expressly contract for a duty to indemnify. (See Valley Crest Landscape Development, Inc. v. Mission Pools of Escondido, Inc. (2015) 238 Cal.App.4th 468, 479.) “Express indemnity generally is not subject to equitable considerations or a joint legal obligation to the injured party; rather, it is enforced in accordance with the terms of the contracting parties' agreement.” (Prince v. Pacific Gas & Electric Co. (2009) 45 Cal.4th 1151, 1158.)

Defendant contends that Plaintiffs’ cause of action for express indemnity is not covered under the Operation Agreement.

The Operation Agreement provides in relevant part:

“The Limited Liability Company shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending of completed action, suit, proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Limited Liability Company by reason of the fact that he/she is or was a Member or Manager of the Limited Liability Company or is or was serving at the request of the Limited Liability Company as a director, manager . . . against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him/her in connection with the defense or settlement of such action.” (Basharel Decl., Exh., A, Art. V, Sec. 1.)

“Any indemnification of Members, Manager(s), employees or agents pursuant this article V, unless ordered by a court, shall be made by the Limited Liability Company only as authorized in the specific case upon a determination that such indemnification is proper in the circumstances because such Member, Manager, employee or agent has met the applicable standard of conduct set forth by law. Such determination shall be made by the Members by a majority vote of quorum consisting of Members who were not a party to the action, suit, or proceeding, or if such a quorum is not obtainable, or even if obtainable a quorum of disinterested members so directs, by independent legal counsel in a written opinion.” (Basharel Decl., Exh., A, Art. V, Sec. 4.)

“The Limited Liability Company shall have the power to give any further indemnity, in addition to the indemnity authorized or contemplated under the Article V, to any person who is or was a Member, Manager, employee or agent or to any person who is or was serving at the request of the Limited Liability Company as a manager, director, officer, employee or agent of another limited liability company corporation, partnership, joint venture, trust or other enterprise . . .” (Basharel Decl., Exh., A, Art. V, Sec. 4.)

Plaintiffs’ cause of action for express indemnity arises from Plaintiffs incurring costs and expenses in mortgage and insurance payments, management and maintenance costs of the Property. (Compl., ¶¶ 19, 21; UMF 6.) The Operation Agreement provides that Defendant may indemnify any person who is involved in some type of proceeding for expenses, judgments, fines and amounts paid in settlement and reasonably incurred by that person in connection with the defense or settlement of such action. Defendant contends that Plaintiffs’ claim for express indemnity is not based on the threat of litigation or that Plaintiffs’ paid amounts related to defense or settlement of an action.

Accordingly, Defendant has presented sufficient evidence to meet its burden of showing that Plaintiffs’ cause of action for express indemnity is not covered under the Operation Agreement. This shifts the burden to Plaintiffs to offer evidence that their indemnity claim is covered under the Operation Agreement.

Plaintiffs contend that SS was designated as Defendant’s PMQ with regards to its Operating Agreement. (Quintana Decl., ¶¶5, 6, Exhs. A-B.) SS as Defendant’s PMQ, and as Defendant’s binding designee, stated that Defendant can, and is authorized to, indemnify and reimburse Plaintiffs for the expenses they incurred in relation to the Property under Article V Section 7 of the Operation Agreement. (Schmuel Decl., ¶ 12.)

Here, a review of Article V Section 7 of the Operation Agreement reveals that Defendant has the power to give any further indemnity, in addition to the indemnity authorized or contemplated under the Article V, to any person who is or was a Member, Manager, employee. However, while Article V Section 7 gives Defendant the authority to further indemnify persons, any indemnification, unless ordered by a court, shall be made upon the determination that indemnification is proper, by a majority vote of the members. (See Basharel Decl., Exh., A, Art. V, Sec. 4.) Plaintiffs have failed to provide any evidence that Defendant’s members voted and agreed to indemnify Plaintiffs. While, Plaintiffs, provide the SS’s declaration in support of Plaintiffs’ Opposition that state that he made a request to Defendant for indemnification and reimbursement, Plaintiff fails to provide any evidence in support that SS made that request or that he made any attempt to set up a vote to determine whether indemnification of Plaintiffs was proper.

As such, there is no triable issue of fact as to Plaintiffs’ cause of action for express indemnity because Plaintiffs’ cause of action does not fall under the Operation Agreement.

Thus, Defendant’s Motion for Adjudication as to Plaintiffs’ express indemnity cause of action is GRANTED.

b. Implied Indemnity Cause of Action

“Implied contractual indemnity is a type of equitable indemnity [citation], predicated on the indemnitor’s breach of contract with the indemnitee.” (Garlock Sealing Techs., LLC v. NAK Sealing Techs. Corp. (2007) 148 Cal.App.4th 937, 968.)  Implied contractual indemnity is available “when two parties in a contractual relationship were both responsible for injuring a third party.”  (Prince v. Pacific Gas & Electric Co. (2009) 45 Cal.4th 1151, 1159.)   

Breach of written contract claims are subject to a four-year statute of limitations. (See Code Civ. Proc., ; 337(1).) Breach of oral contract claims are subject to a two-year statute of limitations. (See Code Civ. Proc., ; 339(1).)  

Defendant contends that Plaintiffs’ second cause of action makes no reference to the Operating Agreement, as the contract under which implied indemnity is sought. Defendant further contends that the only contract that Plaintiffs could be referring to is the implied-in-fact agreement (third cause of action) or under a quasi-contract theory (fifth cause of action). This would subject this cause of action to a two-year statute of limitations. Given that Plaintiffs suffered injury in April 2015, their cause of action for implied indemnity, which was filed on December 20, 2017, is time-barred.

Accordingly, Defendant has presented sufficient evidence to meet its burden of showing that Plaintiffs’ cause of action for implied indemnity is time-barred. This shifts the burden to Plaintiffs to offer evidence that their implied indemnity cause of action is not time-barred.

Plaintiffs contends that their cause of action for implied indemnity incorporates by reference to the Operation Agreement in paragraph 32 of the Complaint. As such, the implied indemnity case of action is subject to the four-year statute of limitations of a written contract. In addition, to the extent the cause of action remains unclear Plaintiffs’ seek leave to amend the Complaint to clarify their cause of action.

Here, a review of the of the second cause of action reveals that it is for “Implied Contractual Indemnity.” Here, it is unclear whether Plaintiffs were referring to the Operation Agreement as they generally refer to the “required” “agreements” without specification. (See Compl., ¶ 33.) In addition, they incorporate by reference the allegations set forth in the proceeding paragraphs, which includes paragraphs 29 and 30, in the Complaint which make reference to the Operation Agreement. Here, the allegations contained in the implied contractual indemnity cause of action do not lean more one way or the other as being based on the Operation Agreement, the implied-in-fact contract, or quasi contract. The Court is left to speculate as to which specific “agreement” Plaintiffs were referring to.

As is well known, a court “may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading or proceeding by adding or striking out the name of any party, or by correcting a mistake in the name of a party, or a mistake in any other respect.” (Code Civ Proc ; 473(a)(1).) In addition, it is well established that “California courts have a policy of great liberality in allowing amendments at any stage of the proceeding so as to dispose of cases upon their substantial merits where the authorization does not prejudice the substantial rights of others. Indeed, it is a rare case in which a court will be justified in refusing a party leave to amend his or her pleading so that he or she may properly present his or her case.” (Board of Trustees v. Superior Court (2007) 149 Cal.App.4th 1154, 1163 (citations omitted).)

Plaintiffs have asked the Court for leave to amend the Complaint to clarify their initial intention, which was to make reference to the Operation Agreement.

As such, Plaintiffs shall be allowed to amend to the Complaint, but only as to the implied indemnity cause of action and limited only to make reference to the Operation Agreement.

Thus, Defendant’s Motion for Summary Adjudication as to Plaintiffs’ cause of action for implied indemnity is DENIED. Plaintiffs are granted leave to amend the Complaint, but only as to the implied indemnity cause of action, which is limited to make reference to the Operation Agreement.

c. Implied-in-Fact Contract Cause of Action

“A cause of action for breach of implied contract has the same elements as does a cause of action for breach of contract, except that the promise is not expressed in words but is implied from the promisor’s conduct.” (Yari v. Producers Guild of America, Inc. (2008) 161 Cal.App.4th 172, 182.) “The standard elements of a claim for breach of contract are: ‘(1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff therefrom.’” (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178.) The statute of limitations for a cause of action for breach of implied-in-fact contract is two years. (See Code Civ. Proc., ; 339(1); Barton v. New United Motor Manufacturing, Inc. The cause of action accrues when the breach occurs. (See Spear v. California State Automobile Association (1992) 2 Cal.4th 1035, 1042.)

Defendant contends that the implied-in-fact contract alleged by Plaintiffs centers around SS and Israel’s agreement that Defendant would purchase, manage, and sell the Property; Plaintiffs agreement to put the down payment with one-half to be paid by SS and one-half to be paid by Plaintiffs on behalf of Israel, which was to be repaid; and Defendant was to manage the Property and receive the profits and bear the losses related to the purchase, management and sale of the Property. (Compl., ¶ 37.) Defendant breached the implied agreement by refusing to manage the Property in April 2015 and by failing to pay Plaintiffs the costs and expenses incurred in relation to the purchase, management and sale of the Property. (Compl., ¶¶ 19, 21, 41; UMF 6.) As such, Defendant’s contends that the breach of the implied-in-fact contract occurred as early as April 2015 and Plaintiffs were required to file this cause of action by December 20, 2017.

     Accordingly, Defendant has presented sufficient evidence to meet its burden of showing that Plaintiffs’ cause of action for implied-in-fact contract is time-barred. This shifts the burden to Plaintiffs to offer evidence that their implied-in-fact cause of action is not time-barred.

Plaintiffs contend that they could not have been put on notice that Defendant was ceasing its management of the Property in Mr. Slott’s April 29, 2015 letter to Plaintiffs because Mr. Slott represented Israel and not Defendant. In addition, Plaintiffs contends that this cause of action was not complete until the Property was sold and Defendant failed and refused to pay Plaintiffs the expenses incurred in relation to the purchase, management, and sale of the Property on August 25, 2017.

Here, Plaintiffs’ contention that they were not put on notice that Defendant was ceasing its management of the property is contradicted by the allegations in the Complaint that Defendant refused to participate in the management of the Property in April 2015 and that Plaintiffs were forced to incur costs staring in April 2015, which included mortgage and insurance payments, management and maintenance costs. (Compl., ¶ 21, 41; UMF 6.) As such, Defendant was in breach of their agreement as of April 2015. (Id.) Plaintiffs’ contention that this cause of action was not complete until the sale of the Property is without merit, as the breach of the agreement had already taken place and Plaintiffs were selling the property to “minimize additional injury.” (Compl., ¶ 22.) Plaintiffs were on notice of the breach and were injured in April 2015 as they were forced to incur costs starting in April 2015. As such, Plaintiffs’ had two years from April 2015 to file their cause of action for implied-in-fact contract. Plaintiffs did not file their cause of action for implied-in-fact contract until December 20, 2017.

As such, Plaintiffs’ cause of action for implied-in-fact contract is time-barred.

Thus, Defendant’s Motions for Adjudication as to Plaintiffs’ cause of action for implied-in-fact contract is GRANTED.

d. Money Lent, Paid, or Expended

This cause of action is a common count. A “common count is not a specific cause of action, however; rather, it is a simplified form of pleading normally used to aver the existence of various forms of monetary indebtedness, including that arising from an alleged duty to make restitution under an assumpsit theory.” (McBride v. Boughton (2004) 123 Cal.App.4th 379, 394.) When “a common count is used as an alternative way of seeking the same recovery demanded in a specific cause of action and is based on the same facts,” it does not survive if the underlying claim does not survive. (See Id., Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 459-460; Zumbrun v. University of Southern California (1972) 25 Cal.App.3d 1, 14.)

As discussed above, Plaintiffs will be allowed to amend the Complaint as to their implied indemnity cause of action. As such, Plaintiffs may maintain this cause of action.

Thus, Defendant’s Motion for Summary Adjudication as to Plaintiffs’ cause of action for money lent, paid, or expended is DENIED.

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e. Unjust Enrichment/Quasi-Contract

In California, there is no cause of action for unjust enrichment. (See Rutherford Holdings LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 231; Levine v. Blue Shield of California (2010) 189 Cal.App.4th 1117, 1138.)

There is no cause of action for unjust enrichment, as such Plaintiffs’ cause of action will be subject to a two-year statute of limitations pursuant to Code of Civil Procedure section 339(1) (oral contracts). (See Barton, supra, 43 Cal.App.4th at 1206.)

Plaintiffs’ cause of action for quasi-contract is based on the same conduct giving rise to their implied-in-fact cause of action. As discussed above, as of April 2015, Plaintiffs were aware that Defendant was in breach of the implied agreement and had two years from that time to file that cause of action. Plaintiffs did not file their cause of action for unjust enrichment/ quasi-contract until December 20, 2017. As such, Plaintiffs’ cause of action is time-barred.

Thus, Defendant’s Motion for Summary Adjudication as to Plaintiffs’ unjust enrichment/quasi-contract cause of action is GRANTED.

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VI. CONCLUSION

Defendant’s Motion for Adjudication as to Plaintiffs’ causes of action for express indemnity, implied-in-fact-contact, and unjust enrichment/quasi-contract is GRANTED.

Defendant’s Motion for Summary Adjudication as to Plaintiffs’ causes of action for implied indemnity and money lent, paid, or expended is DENIED. Plaintiffs are granted leave to amend the Complaint, but only as to the implied indemnity cause of action, which is limited to make reference to the Operation Agreement.



Case Number: ****6625    Hearing Date: March 17, 2021    Dept: U

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT

SCHLOMO SCHMUEL, et al.,

Plaintiffs,

vs.

CASPAR MANAGEMENT CO., LLC., et al.

Defendants.

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[TENTATIVE] ORDER RE: PLAINTIFFS’ MOTION FOR CLARIFICATION REGARDING IMPOSITION OF MONETARY SANCTIONS

Dept. U

8:30 a.m.

March 17, 2021

I. BACKGROUND

Plaintiffs Schlomo Schmuel (“Schmuel”) and Schlomo Schmuel, D.P .M., Inc. (“Plaintiffs”) allege that Defendant Caspar Management Co., LLC (“Defendant”), and non-party, but defendant in other actions Avrahem Basharel (“Basharel”), own equal shares in Defendant Edgebrook, Plaza LLC. (“Edgebrook”). Edgebrook owns certain real property in Texas. Plaintiff Schmuel alleges a 50% ownership interest in Defendant with Basharel owning the other 50%.

In other actions, Plaintiffs allege Edgebrook and Basharel are improperly diverting income funds from the Texas property to Basharel.

The instant action is related to Schlomo Schmuel, D.P.M., Inc. v. Israel Basharel, et al. LASC No. LC103145, which is also deemed related to Schmuel v. Edgebrook Plaza, et al. LASC No. LC104352.

The Court previously granted monetary sanctions in connection with discovery motions filed by Plaintiffs.

On November 23, 2020, in the Court’s order denying without prejudice Plaintiffs’ motion for terminating sanctions, the Court ruled in pertinent part that “[Defendant] had tendered a $11,400 check to Plaintiffs on August 14, 2020 as compensation for daily sanctions.” (November 23, 2020 order p. 3.)

Plaintiffs now move for clarification of those monetary sanctions, namely who should be responsible for paying those sanctions when the lawsuit involves a two-member limited liability company where one member is suing the limited liability company and the decisions of the limited liability company are coordinated by the other member.

In other words, Plaintiffs argue that Schmuel should not be penalized to pay half of the monetary sanctions by nature of his association of the company because the company’s misconduct that led to these sanctions was not because of his own actions. Accordingly, Plaintiffs argue that the Court should find the party responsible for paying the monetary sanctions should be: (1) Basharel personally; (2) Defendant’s counsel of record; or (3) Basharel or Defendant’s counsel of record jointly and severally.

Defendant opposes, arguing that: (1) the Court always had imposed monetary sanctions against Defendant, not its counsel; (2) Plaintiffs’ motion is procedurally defective; (3) Defendant argues that is not the proper forum for this issue; and (4) this motion is an improper motion for reconsideration.

Plaintiffs filed a reply.

II. LEGAL STANDARD

“Every court shall have the power to do all of the following: . . . To amend and control its process and orders so as to make them conform to law and justice.” (Code Civ. Proc., ; 128, subd. (a)(8).)

“The court may, upon motion of the injured party, or its own motion, correct clerical mistakes in its judgment or orders as entered, so as to conform to the judgment or order directed, and may, on motion of either party after notice to the other party, set aside any void judgment or order.” (Id., ; 473, subd. (d).)

III. DISCUSSION

a. Request for judicial notice

Plaintiffs request judicial notice of 15 exhibits, which involve court filings in this action and the companion action.

Defendant does not oppose.

“Judicial notice may not be taken of any matter unless authorized or required by law.” (Evid. Code, ; 450.) Evidence Code section 452 lists matters that are subject to judicial notice.

In regard to the documents for which the Court grants judicial notice, the Court is not mandated to accept the truth of its their contents or the parties’ interpretation of those contents. (Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.)

The Court grants judicial notice of Plaintiffs’ unopposed request. Here, all the documents are court filings.

b. Merits

Following motion practice in a companion action, the parties had negotiated and entered into a preliminary injunction whereby Defendant created a blocked bank account to hold amounts derived from Defendant’s ownership interest in specific property in Texas and to pay bills incurred by Defendant when approved by the parties and excess funds to Defendant’s owners. (RJN Ex. 13.) Plaintiffs contend that any payment out of this account to satisfy the monetary sanctions is not authorized because the monetary sanctions are to be a penalty and Defendant made this decision without Schmuel’s consent. Accordingly, in the interests of justice, Plaintiffs request that the Court use its equitable powers to impose a monetary sanction that would be effective and not otherwise penalize Schmuel because he happens to have a financial interest in Defendant.

The Court disagrees.

As a preliminary matter, Defendant correctly argues that the instant motion for clarification is procedurally defective. “A request for a sanction shall, in the notice of motion, identify every person, party, and attorney against whom the sanction is sought, and specify the type of sanction sought. . . . .” (Code Civ. Proc., ; 2023.040.) Plaintiffs’ motion seeks clarification of a previous court order. However, the notice of motion fails to identify key details: (1) which order(s); (2) how much in monetary sanctions; and (3) what this clarification entails, which here is a new order imposing monetary sanctions on Defendant’s counsel and/or a different fund source of Defendant. Defendant and its counsel did not have proper notice.

Even if the Court did proceed to the merits, the Court would deny the motion. The underlying discovery motions always sought monetary sanctions against Defendant and its counsel. Plaintiffs should have been more careful in their request for monetary sanctions if they would have an issue if the sanctions were awarded against Defendant only. Further, there is no indication that Plaintiffs raised this issue when the Court ordered previous monetary sanctions or when Defendant tendered payment of the monetary sanctions in August 2020.

In their reply, Plaintiffs contend that they raised this issue at the November 2020 hearing on the motion for terminating sanctions and the presiding judge (Hon. Theresa Traber) agreed. The Court disagrees. Judge Traber indicated that she had the authority to impose the sanction on Basharel individually, but she did not end up doing so. Whether she was inclined to rule in that way (at the original hearing or after Plaintiffs filed a new motion) is immaterial because she did not do so. Whether Judge Traber gave authorization for Plaintiffs to file a motion for clarification does not require this Court to grant a motion changing the imposition of the monetary sanction, especially considering the procedural defects noted above.

IV. CONCLUSION

The Court denies Plaintiffs’ motion for clarification of for monetary sanctions.

Plaintiffs to give notice of this ruling unless waived.


Case Number: ****6625    Hearing Date: November 23, 2020    Dept: U

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT

SCHLOMO SCHMUEL, an individual; SCHLOMO SCHMUEL D.P.M., INC., a California corporation,

Plaintiffs,

vs.

CASPAR MANAGEMENT GROUP, LLC, a California limited liability company; and DOES 1-10, inclusive,

Defendants.

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CASE NO: ****6625

[TENTATIVE] ORDER RE: CASPAR’S MOTION FOR LEAVE TO FILE AN AMENDED ANSWER

Dept. U

8:30 a.m.

November 23, 2020

I. BACKGROUND

Schlomo Schmuel and Schlomo Schmuel D.P.M., Inc. (collectively, Plaintiffs) filed a complaint against Caspar Management Group, LLC (Caspar) and Does 1 through 10 requesting indemnification for losses purportedly sustained in relation to real property located at 2210 E. Highland Avenue, San Bernardino, California (the Highland property).

On August 4, 2020, Caspar filed this motion for leave to amend its answer pursuant to Code of Civil Procedure section 473(a)(1) in order to plead offset as an additional affirmative defense. Caspar filed an amendment to its request on September 24, 2020 moving to plead the statute of frauds as an affirmative defense as well.

II. LEGAL STANDARD & DISCUSSION

A. Procedural Requirements

California Rules of Court, rule 3.1324 requires a motion seeking leave to amend to include a copy of the proposed pleadings, to identify the amendments, and to be accompanied by a declaration including the following facts:

1) The effect of the amendment;

2) Why the amendment is necessary and proper;

3) When the facts giving rise to the amended allegations were discovered; and

4) The reasons why the request for amendment was not made earlier.

Here, Caspar attached a copy of its proposed amended answer to both its original and amended motion. (Exhibit A.) Caspar identifies the amendments as pleading offset and statute of frauds as additional affirmative defenses. Offset would be Caspar’s sixteenth affirmative defense and the statute of frauds its eleventh affirmative defense.

Caspar submits the declaration of its attorney, Barak Isaacs (Isaacs), in support of its motion. Barak does not directly state the effect of the amendment, but the Court can presume it would be to plead offset and the statute of frauds as additional affirmative defenses against the complaint.

Caspar deposed both Plaintiffs during June and July of 2020. Through their deposition testimony Caspar learned that Plaintiffs received benefits of property ownership in the Highland property, including depreciation and other expenses off their federal and state tax returns. (Isaacs declaration, ¶ 3.) Schmuel disclaimed any knowledge of such benefits, but Caspar also received Plaintiffs’ 2016 and 2017 tax returns evidencing such benefits.

If continued discovery reveals that Caspar is the true owner of the Highland property, it would be entitled to the monetary benefits received by Plaintiff. Caspar would be able to offset this amount owed to it against Plaintiffs’ monetary claims. (Id., ¶ 4.) Isaacs’ declaration has demonstrated that this amendment is necessary and proper.

As to the statute of frauds affirmative defense, Caspar argues this amendment is necessary and proper because, throughout discovery, Plaintiffs have continually taken the position that Caspar, rather than Plaintiffs, are the true owners of the Highland property. However, there is no signed agreement demonstrating Caspar’s ownership of the Highland property, thus, Caspar reasons that the statute of frauds applies because real estate transactions must be evidenced in writing. (Id., ¶ 3.)

Plaintiffs argue Caspar’s statute of frauds amendment is not timely because this action was initiated over two years ago and Caspar has known, at least, from the outset, that there is no writing evidencing its ownership of the Highland property.

Plaintiffs argue Caspar’s offset amendment is untimely as well because Caspar has known about these purported benefits since 2018. Plaintiffs submit evidence that Caspar raised this earlier in prior discovery requests and at a November 12, 2018 meet and confer. (Quitana declaration, ¶ 4, exhibit C.)

Caspar replies that Schmuel did not confirm until June 18, 2020 at his deposition that he was unaware of another written agreement showing Caspar was intended to be the true owner of the Highland property. Moreover, Caspar shows that it was not until October 28, 2020 when it received Plaintiffs’ tax returns that it was confirmed that they received tax benefits from the Highland property in 2016 and 2017.

Although it is questionable how long Caspar knew of the facts giving rise to its offset and statute of frauds affirmative defenses, the Court finds these amendments timely in the interest of disposing of all claims between the parties in a single action.

B. Substantive Requirements

The Court may grant leave to amend the pleadings at any stage of the action. A party may discover the need to amend after all pleadings are completed and new information requires a change in the nature of the claims or defenses previously pleaded. Such changes usually cannot be made on ex parte procedure. Rather, a formal motion to amend must be served and filed. (Dye v. Caterpillar, Inc. (2011) 195 Cal.App.4th 1366, 1380.) Motions for leave to amend the pleadings are directed to the sound discretion of the judge. “The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading . . . .” (Code Civ. Proc. ; 473(a)(1) & ; 576.)

Judicial policy favors resolution of all disputed matters between the parties in the same lawsuit. Thus, the court's discretion will usually be exercised liberally to permit amendment of the pleadings. (Nestle v. Santa Monica (1972) 6 Cal.3d 920, 939; Mabie v. Hyatt (1998) 61 Cal.App.4th 581, 596; Howard v. County of San Diego (2010) 184 Cal.App.4th 1422, 1428.) This judicial policy is so strong that denial of leave to amend is rarely justified.

“If the motion to amend is timely made and the granting of the motion will not prejudice the opposing party, it is error to refuse permission to amend and where the refusal also results in a party being deprived of the right to assert a meritorious cause of action or a meritorious defense, it is not only error but an abuse of discretion.” (Morgan v. Super. Ct. (1959) 172 Cal.App.2d 527, 530; Mabie v. Hyatt, supra, 61 Cal.App.4th at 596; Bettencourt v. Hennessy Industries, Inc. (2012) 205 Cal.App.4th 1103, 1111 [abuse of discretion to deny leave to amend when there is a “reasonable possibility” that defect can be cured].) Prejudice exists where the amendment would result in a delay of trial, along with loss of critical evidence, added costs of preparation, increased burden of discovery, etc. (Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 486-488.) The fact that the amendment involves a change in legal theory that would make admissible evidence damaging to the opposing party is not the kind of prejudice the court will consider. (Hirsa v. Super. Ct. (1981) 118 Cal.App.3d 486, 490.)

This Court has discretion to permit any type of amendment. The amendment does not need to relate to the claims or defenses originally pleaded. Thus, amended pleadings may set forth entirely different claims, add new parties, or seek a different or greater remedy. However, the Court has discretion to deny leave to amend where a proposed amendment fails to state a valid cause of action or defense. (California Casualty Gen. Insurance Co. v. Super. Ct. (1985) 173 Cal.App.3d 274, 280-281, disapproved on other grounds.)

Here, as discussed above, this motion has been timely made. Caspar contends Plaintiffs would not be prejudiced by this amendment because no trial date has been set and discovery remains ongoing. (Isaacs declaration, ¶ 5.)

Plaintiffs assert they would be prejudiced by these amendments because they deposed a representative Caspar during May, June, and July of this year prior to these additional affirmative defenses being proposed. If the Court is inclined to grant this motion, Plaintiffs reason they should be given the opportunity to further depose Caspar about the offset and statute of frauds affirmative defenses.

While these amendments may slightly increase Plaintiffs’ discovery burden, the Court finds Plaintiffs will not be prejudiced by Caspar pleading these additional affirmative defenses. The Court will grant leave, if desired, to conduct brief follow-up depositions of Caspar on these narrow additional defenses.

III. CONCLUSION

For the foregoing reasons, Caspar’s motion for leave to amend its answer is GRANTED.

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

DATED: November 23, 2020

_____________________

Hon. Theresa M. Traber

Judge of the Superior Court

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT

SCHLOMO SCHMUEL, an individual; SCHLOMO SCHMUEL D.P.M., INC., a California corporation,

CASPAR MANAGEMENT GROUP, LLC, a California limited liability company; and DOES 1-10, inclusive,

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[TENTATIVE] ORDER RE: PLAINTIFFS’ APPLICATION TO FILE MOTION EXHIBITS UNDER SEAL  

Dept. U

8:30 a.m.

November 23, 2020

I. BACKGROUND

Schlomo Schmuel and Schlomo Schmuel D.P.M., Inc. (collectively, Plaintiffs) filed a complaint against Caspar Management Group, LLC (Caspar) and Does 1 through 10 requesting indemnification for losses purportedly sustained in relation to real property located at 2210 E. Highland Avenue, San Bernardino, California (the Highland property). 

On August 26, 2020, Plaintiffs filed this application for an order to file motion exhibits under seal pursuant to California Rules of Court, rule 2.551.

II. LEGAL STANDARD

California Rules of Court, rule 2.550, subdivision (c) states: “[u]nless confidentiality is required by law, court records are presumed to be open.” Nevertheless, a party may move to seal records pursuant to California Rule of Court, rules 2.550 and 2.551. California Rules of Court, rule 2.551, subdivision (b)(1) states: “[a] party requesting that a record be filed under seal must file a motion or an application for an order sealing the record. The motion or application must be accompanied by a memorandum and a declaration containing facts sufficient to justify the sealing.” 

The procedures set forth in California Rules of Court, rules 2.550 and 2.551 “do not apply to discovery motions and records filed or lodged in connection with discovery motions or proceedings. However, the rules do apply to discovery materials that are used at trial or submitted as a basis for adjudication of matters other than discovery motions or proceedings.” 

California Rules of Court, rule 2.550, subdivision (d) states: “[t]he court may order that a record be filed under seal only if it expressly finds facts that establish:

(1) There exists an overriding interest that overcomes the right of public access to the record;

(2) The overriding interest supports sealing the record;

(3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed;

(4) The proposed sealing is narrowly tailored; and

(5) No less restrictive means exist to achieve the overriding interest.”

The procedure set forth in California Rules of Court, rules 2.550 and 2.551, codified the standards announced by the California Supreme Court in NBC Subsidiary (KNBC-TV) v. Superior Court (1999) 20 Cal.4th 1178. In that case, the Supreme Court recognized the public’s constitutional right to access court proceedings. The rationales for such a right were described as follows: “public access plays an important and specific structural role in the conduct of such proceedings. Public access to civil proceedings serves to (i) demonstrate that justice is meted out fairly, thereby promoting public confidence in such governmental proceedings; (ii) provide a means by which citizens scrutinize and check the use and possible abuse of judicial power; and (iii) enhance the truthfinding function of the proceeding.” (Id. at p. 1219).

A reasoned decision about whether to seal public court records cannot be made without submissions “(1) identifying the specific information claimed to be entitled to such treatment; (2) identifying the nature of the harm threatened by disclosure; and (3) identifying and accounting for countervailing considerations.” (HB Fuller Co. v. Doe (2007) 151 Cal.App.4th 879, 894). The party seeking a sealing order must shoulder the burden of presenting information on the first two steps as he “is presumptively in the best position to know what disclosures will harm him and how.” (Ibid.). “This means at a minimum that the party seeking to seal documents . . . must come forward with a specific enumeration of the facts sought to be withheld and the specific reasons for withholding them.” (Ibid.).

An agreement to keep certain documents or information confidential or to file them under seal is insufficient to establish an interest overriding the constitutional right of access to court documents. (McNair v. National Collegiate Athletic Ass’n (2015) 234 Cal.App.4th 25, 35-36). While a “contractual obligation not to disclose can constitute an overriding interest,” a party seeking to file documents under seal pursuant to such an obligation must demonstrate that “there is a substantial probability that it will be prejudiced absent . . . sealing.” (Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, 1283). There must be a specific showing of a serious injury that would be inflicted in the absence of a sealing order. (Id. at p. 1282; McNair v. National Collegiate Athletic Ass’n, supra, 234 Cal.App.4th at p. 35). A “trial court cannot rely solely on an agreement or stipulation of the parties as a basis for permitting records to be filed under seal.” (Savaglio v. Wal-Mart Stores, Inc. (2007) 149 Cal.App.4th 588, 600 (citing California Rules of Court, rule 2.551, subd. (a).)

III. DISCUSSION

Plaintiffs move the Court for an order to file Exhibits H and I to the supplemental declaration of Andres Quintana in support of Plaintiffs’ reply to its motion for terminating sanctions. Both exhibits are certified deposition transcripts of Caspar’s most knowledgeable person, Mr. Basheral. Caspar marked both deposition transcripts, taken on May 26, 2020 and June 16, 2020, “confidential.” Plaintiffs lodged copies of these exhibits with the court clerk. Plaintiffs reasons the exhibits are necessary to its pending motion for terminating sanctions because both are addressed throughout Caspar’s opposition and in their own reply.

IV. CONCLUSION

For the foregoing reasons, Plaintiffs’ motion to file documents under seal is DENIED.

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

DATED: November 23, 2020 

_____________________ 

Hon. Theresa M. Traber 

Judge of the Superior Court 

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT

SCHLOMO SCHMUEL, an individual; SCHLOMO SCHMUEL D.P.M., INC., a California corporation,

CASPAR MANAGEMENT GROUP, LLC, a California limited liability company; and DOES 1-10, inclusive,

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[TENTATIVE] ORDER RE: PLAINTIFFS’ MOTION FOR TERMINATING SANCTIONS  

Dept. U

8:30 a.m.

November 23, 2020

I. BACKGROUND

Schlomo Schmuel and Schlomo Schmuel D.P.M., Inc. (collectively, Plaintiffs) filed a complaint against Caspar Management Group, LLC (Caspar) and Does 1 through 10 requesting indemnification for losses purportedly sustained in relation to real property located at 2210 E. Highland Avenue, San Bernardino, California (the Highland property). 

On February 14, 2020, Plaintiffs filed this motion for terminating sanctions on the grounds that Caspar failed to obey two Court orders directing it to comply with Plaintiffs’ discovery requests.

II. LEGAL STANDARD

Where a party willfully disobeys a discovery order, courts have discretion to impose terminating, issue, evidentiary, or monetary sanctions. (Code Civ. Proc., ;; 2023.010(g), 2030.290©; R.S. Creative, Inc. v. Creative Cotton, Ltd. (1999) 75 Cal.App.4th 486, 495.) Ultimate discovery sanctions are justified where there is a willful discovery order violation, a history of abuse, and evidence showing that less severe sanctions would not produce compliance with discovery rules. (Van Sickle v. Gilbert (2011) 196 Cal.App.4th 1495, 1516.) “[A] penalty as severe as dismissal or default is not authorized where noncompliance with discovery is caused by an inability to comply rather than willfulness or bad faith.” (Brown v. Superior Court (1986) 180 Cal.App.3d 701, 707.) 

The following factors may be relevant in deciding whether and which sanctions to impose for disobedience to discovery orders:

(1) The time that has elapsed since the discovery was served;

(2) Whether the party received extensions of time to answer or respond;

(3) The number of discovery requests and the burden of replying;

(4) The importance of the information sought;

(5) Whether the answering party acted in good faith and with reasonable diligence—i.e., whether he or she was aware of the duty to furnish the requested information and had the ability to do so;

(6) Whether the answers supplied were evasive or incomplete;

(7) The number of questions remaining unanswered;

(8) Whether the unanswered questions sought information that was difficult to obtain;

(9) The existence of prior court orders compelling discovery and the answering party’s compliance therewith (Manzetti v. Sup.Ct. (Fitzgerald) (1993) 21 Cal.App.4th 373, 379.);

(10) Whether the party was unable to comply with previous discovery orders;

(11) Whether an order allowing more time to respond would enable the    responding party to supply the necessary information; and

(12) Whether some sanction short of dismissal or default would be appropriate to the dereliction.

(Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 796.)

Pursuant to Code of Civil Procedure section 2023.030(d), the court may impose a terminating sanction by one of the following orders:

(1) An order striking out the pleadings or parts of the pleadings of any party engaging in the misuse of the discovery process.

(2) An order staying further proceedings by that party until an order for discovery is obeyed.

(3) An order dismissing the action, or any part of the action, of that party.

(4) An order rendering a judgment by default against that party.

The court may order that designated facts “shall be taken as established” by the party adversely affected by the discovery misuse or it may prohibit the party who committed such misuse from supporting or opposing designated claims or defenses. (Code Civ. Proc., ; 2023.030(b).) The court may also prohibit the party, or party-affiliated witness, who disobeyed the court order from introducing designated matters in evidence. (Code Civ. Proc., ; 2023.030(c); Waicis v. Sup.Ct. (Schwartz) (1990) 226 Cal.App.3d 283, 287.)

III. DISCUSSION

Plaintiffs requests discovery sanctions be ordered against Caspar for its failure to comply with the Court’s January 14, 2020 and October 18, 2019 orders. The January 14, 2020 order directed Caspar to comply with the Court’s October 18, 2019 by: (1) providing deposition dates; (2) producing documents requested for inspection; and 3) provide full and complete responses to Plaintiffs’ requests for admissions. The Court also ordered Caspar to pay $150 per day starting February 14, 2020 for each day it was not in full compliance with the Court’s order. At the time of the filing of this motion, Caspar had not complied with either of the Court’s orders.

Since the filing of this motion, Caspar produced Basheral as its person most qualified who was deposed by Plaintiffs on May 26, 2020, June 16, 2020, and July 8, 2020. (Issacs declaration, p. 2.) As to the requests for inspection, Caspar argues the proverbial ball is in Plaintiffs’ court because their counsel acknowledged that he would communicate with defense counsel about the next steps to set up the inspection and has not done so. (Id., p. 4.) Caspar tendered a $11,400 check to Plaintiffs on August 14, 2020 as compensation for the daily sanctions. On May 1, 2020, Caspar served supplemental responses to Plaintiffs’ request for admissions, set four, and form interrogatory 17.1. (Id., p. 4.)

IV. CONCLUSION

For the foregoing reasons, Plaintiffs’ motion for terminating sanctions is DENIED.

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

DATED: November 23, 2020 

_____________________ 

Hon. Theresa M. Traber 

Judge of the Superior Court 



Case Number: ****6625    Hearing Date: November 04, 2020    Dept: U

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT

SCHLOMO SCHMUEL, et al.,

Plaintiffs,

vs.

CASPAR MANAGEMENT GROUP, LLC,

Defendant.

CASE NO: ****6625

[TENTATIVE] ORDER RE:

DEFENDANT CASPAR MANAGEMENT CO., LLC’S MOTION TO COMPEL COMPLIANCE WITH DEPOSITION SUBPOENA

Dept. U

8:30 a.m.

November 4, 2020

I. BACKGROUND

Plaintiffs Schlomo Schmuel and Schmuel D.P.M., Inc. allege that defendant Caspar Management Company, LLC and non-party, but defendant in other actions Avrahem Bashrael own equal shares in Defendant Edgebrook Plaza, LLC. Edgebrook Plaza owns certain real property in Texas. Schmuel alleges a 50% ownership interest in Caspar Management with third party, Israel Bashrael owning the other 50%.

In the other actions, Plaintiffs allege Edgebrook Plaza and Avrahem Bashrael are improperly diverting income funds from the Texas property to Israel Bashrael.

The instant action is related to Schlomo Schmuel, D.P.M., Inc. v. Israel Basharel, et al. (LC103145). Additionally, Schlomo Schmuel, D.P.M., Inc. v. Israel Basharel, et al. (LC103145) and Schmuel v. Edgebrook Plaza, et al. (LC 104352) have been deemed related.

On July 16, 2020, Defendant Caspar Management Co., LLC filed a Motion for an Order Compelling Compliance with a Deposition Subpoena for Business Records.

II. LEGAL STANDARD

A party seeking discovery from a person who is not a party to the action may obtain discovery by oral deposition, written deposition, or deposition subpoena for production of business records. (Code Civ. Proc., ; 2020.010.) A deposition subpoena may command: (1) only the attendance and testimony of the deponent, (2) only the production of business records for copying, or (3) the attendance and testimony of the deponent, as well as the production of business records, other documents, electronically stored information, and tangible things. (Code Civ. Proc., ; 2020.020.)

A service of a deposition subpoena shall be effected a sufficient time in advance of the deposition to provide the deponent a reasonable opportunity to locate and produce any designated documents and, where personal attendance is commanded, a reasonable time to travel to the place of deposition. (Code Civ. Proc., ; 2020.220, subd. (a).) Personal service of any deposition subpoena is effective to require a deponent who is a resident of California to: personally appear and testify, if the subpoena so specifies; to produce any specified documents; and to appear at a court session if the subpoena so specifies. (Code Civ. Proc., ; 2020.220, subd. (c).) A deponent who disobeys a deposition subpoena may be punished for contempt without the necessity of a prior order of the court directing compliance by the witness. (Code Civ. Proc., ; 2020.240.)

The court may, on motion or on the court’s own motion after giving notice and an opportunity to be heard, make an order quashing the subpoena entirely, modifying it, or directing compliance with it upon those terms and conditions as the court shall declare, including protective orders. (Code of Civ. Proc. ; 1987.1, subd. (a).)

III. DISCUSSION

The Court notes that Defendants’ counsel attempted to meet and confer with Plaintiffs’ counsel on June 30, 2020, and July 14, 2020. (Isaacs Decl. ¶¶ 5-6.) However, Plaintiffs’ counsel failed to respond. (Id.)

Defendant Caspar Management Co. (“Defendant”) served the deposition subpoena on Fidelity National Title Company (“Fidelity”) on May 26, 2020. (Id. ¶ 2, Exh. A-B.) On June 30, 2020, Fidelity informed Defendant that it would not be producing documents responsive to the deposition subpoena as Plaintiff had raised objections thereto. (Id. Exhs. C-D.)

On September 30, 2020, Plaintiffs filed qualified opposition papers to this motion. Specifically, Plaintiffs label the opposition an “opposition to request for sanctions,” and assert the basis for their opposition as follows:

First, on July 17, 2020, Plaintiffs' counsel withdrew their objections. (Declaration of Andres Quintana, 1|2, Exh. "A".) Second, Plaintiffs' counsel emailed a copy of his July 17, 2020 letter to Fidelity National, to attorney Barak Isaacs, Caspar Management's counsel, on that same date. {Id., 1|3, Exh. "B".) Finally, as Mr. Isaacs confirmed to this Court on September 3, 2020, Fidelity National has complied with the subpoena.

(Opp. 1:1-17.)

Attached to the declaration of Plaintiff’s counsel is a July 17, 2020, letter from counsel to Fidelity stating that Plaintiffs have decided to withdraw their objections to production of the documents. (Quintana Decl. ¶ 2, Exh. A.) The July 17, 2020, letter was forwarded to Defense counsel. (Id. Exh. B.) Further, Plaintiffs state that Fidelity has since produced the documents, which Defendant confirms in its reply papers.

Thus, there presently no issue as to the production of documents responsive to the deposition subpoena. However, the parties maintain arguments as to the imposition of sanctions.

Defendant seeks sanctions for misuse of the discovery process pursuant to Code of Civil Procedure ; 2023.030. Defendant argues that “the sole reason that Fidelity failed to comply with the subpoena was due to the meritless objections filed by Plaintiffs (via Mr. Quintana). Mr. Quintana withdrew the objection the day after he received the instant motion to compel which resulted in Fidelity promptly producing the records.” (Reply 3:4-8.) In the moving papers, Defendant sought sanctions pursuant to Code of Civil Procedure ; 1987.2(a), which provides that “the court may in its discretion award the amount of the reasonable expenses incurred in making or opposing the motion, including reasonable attorney's fees, if the court finds the motion was made or opposed in bad faith or without substantial justification or that one or more of the requirements of the subpoena was oppressive.”

Here, Plaintiff withdrew did not withdraw objections to the deposition subpoena until the day after being served with the present motion. Additionally, Plaintiffs failed to meet and confer regarding the objections prior to the filing of the motion. Since it is apparent that the objections were withdrawn in response to the filing of this motion, it is likely that the dispute could have been resolved had Plaintiffs’ counsel responded to meet and confer efforts.

Nevertheless, these are not grounds to impose monetary sanctions. Pursuant to Code Civ. Proc. ; 1987.2(a), “the court may in its discretion award the amount of the reasonable expenses incurred in making or opposing the motion, including reasonable attorney's fees, if the court finds the motion was made or opposed in bad faith or without substantial justification or that one or more of the requirements of the subpoena was oppressive.” First, the issue is discretionary. Second, there was no substantive opposition made in “bad faith or without substantial justification.” The Court concludes that no sanctions should be imposed under Code of Civil Procedure ; 1987.2(a).

As to Defendant’s argument raised in reply that Plaintiff’s conduct constitutes a misuse of the discovery process under section 2023.030, Defendant identifies “(e) making, without substantial justification, an unmeritorious objection to discovery,” and “(i) failing to confer in person, by telephone, or by letter with an opposing party or attorney in a reasonable and good faith attempt to resolve informally any dispute concerning discovery, if the section governing a particular discovery motion requires the filing of a declaration stating facts showing that an attempt at informal resolution has been made” as grounds for imposition of sanctions. In this case, however, the objections have been withdrawn, and Code Civ. Proc. ; 1987.1 under which Defendant moves for compliance with the deposition subpoena does not require meet and confer efforts before bringing a discovery motion, rendering subsection (i) inapplicable.

IV. CONCLUSION

Defendant’s Motion to Compel Compliance with Deposition Subpoena is DENIED as moot.

Defendant’s request for Sanctions is DENIED.

DATED: November 4, 2020

_____________________

Hon. Theresa M. Traber

Judge of the Superior Court



Case Number: ****6625    Hearing Date: October 13, 2020    Dept: U

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT

SCHLOMO SCHMUEL, an individual; SCHLOMO SCHMUEL D.P.M., INC., a California corporation,

Plaintiffs,

vs.

CASPAR MANAGEMENT GROUP, LLC, a California limited liability company; and DOES 1-10, inclusive,

Defendants.

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CASE NO: ****6625

[TENTATIVE] ORDER RE: DEFENDANT CASPAR MANAGEMENT GROUP’S MOTION FOR AN ORDER COMPELLING NOVALK LLC’S COMPLIANCE WITH DEPOSITION SUBPOENA AND FOR MONETARY SANCTIONS

Dept. U

8:30 a.m.

October 13, 2020

I. BACKGROUND

Schlomo Schmuel and Schlomo Schmuel D.P.M., Inc. (collectively, Plaintiffs) filed a complaint against Caspar Management Group, LLC (Caspar) and Does 1 through 10 requesting indemnification for losses purportedly sustained in relation to real property located at 2210 E. Highland Avenue, San Bernardino, California (the Highland property).

On August 6, 2020, Caspar filed this motion for an order compelling third-party Novalk LLC’s compliance with a deposition subpoena for personal appearance and production of documents. Caspar also requests monetary sanctions against Novalk.

II. LEGAL STANDARD & DISCUSSION

In relevant part, Code of Civil Procedure section 1987.1(a) provides:

If a subpoena requires the attendance of a witness or the production of books, documents, electronically stored information, or other things . . . at the taking of a deposition, the court, upon motion . . . may make an order quashing the subpoena entirely, modifying it, or directing compliance with it upon those terms or conditions as the court shall declare, including protective orders. In addition, the court may make any other order as may be appropriate to protect the person from unreasonable or oppressive demands, including unreasonable violations of the right of privacy of the person.

Code of Civil Procedure section 1987.2(a) provides “the court may in its discretion award the amount of the reasonable expenses incurred in making or opposing the motion, including reasonable attorney's fees, if the court finds the motion was made or opposed in bad faith or without substantial justification . . . .” As used here, “substantial justification,” allowing sanctions to be incurred in opposing a motion made in bad faith or without substantial justification, means that a justification is clearly reasonable because it is well grounded in both law and fact. (Evilsizor v. Sweeney (2014) 230 Cal.App.4th 1304, 1312.) Code of Civil Procedure section 2025.480(j) provides a similar standard for the imposition of sanctions, directing that monetary sanctions be awarded unless the opposing party acted with substantial justification or other circumstances make the imposition of the sanction unjust.

Here, Caspar served Novalk with a Deposition Subpoena for Personal Appearance of Novalk’s Person Most Knowledgeable and Production of Documents and Things on June 23, 2020. The subpoena set the deposition for July 24, 2020 at 1:00 p.m. in Agora Hills, California. (Isaacs declaration, p. 2, Exhibit A.) Novalk was served through Andrew Rauch, its agent for service of process. (Id., p. 3.) Rauch telephoned Caspar’s counsel, Barak Isaac (Isaac) after being served with the subpoena to discuss the matter. (Id., p. 4.) After that initial conversation, Isaac tried several times to confirm with Rauch Novalk’s appearance and production at the deposition. However, Isaac received no response. (Ibid.) Novalk did not serve any objections to the deposition subpoena, but, nevertheless, it did not appear at the scheduled deposition. (Id., p. 6.)

Caspar served this subpoena on Novalk because the Highland property was sold by Plaintiffs to Novalk in August 2018. During discovery, Caspar obtained documents showing that Plaintiffs provided Novalk with a $22,233.33 credit at the close of escrow. (Id., p. 7.) Plaintiffs have not explained the reason for this extension of credit. (Ibid.) Novalk purchased the Highland property via short sale, so there are questions about how Novalk first learned about the property and whether its principals had a preexisting relationship with Plaintiffs or anyone associated with them.

Review of the subpoena shows Caspar seeks the deposition testimony of Novalk’s person most knowledge about the purchase of the Highland property and any communications between Novalk and Plaintiffs. Caspar also seeks productions of any documents concerning the same topic.

Isaac’s declaration adequately explains the relevance of and need for Novalk’s testimony and the documents requested. He also explains his attempts to ensure Novalk’s appearance and production prior to the date of the deposition, and Novalk’s failure to appear. The Court finds that there is good cause to subpoena the desired testimony and documents and grants the motion to compel.

The Court also finds that Caspar is entitled to sanctions because Novalk has provided no justification for its failure to appear for the noticed deposition nor any opposition to the motion before the Court. Thus, there is no substantial justification for its resistance to discovery which forced Caspar to successfully pursue this motion to compel. While sanctions are warranted, the Court finds that the amount of $4,116 is excessive. Based on the straight-forward and short character of the moving papers and the absence of opposition or reply, the Court finds it is reasonable to award a total of $2,166 in monetary sanctions, that includes a total of six hours of time at $300 per hour, or $1,800, plus costs of $366 to cover the non-appearance certificate and the motion filing fees.

III. CONCLUSION

For the foregoing reasons, Caspar’s motion to compel Novalk’s compliance with the Deposition Subpoena and request for sanctions are GRANTED.

Novalk LLC is ordered to present its designated representative(s) for deposition and produce all documents sought within two weeks of this ruling. Novalk LLC is also ordered to pay $2,166 in monetary sanctions to Caspar within 30 days of this ruling.

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

DATED: October 13, 2020

_____________________

Hon. Theresa M. Traber

Judge of the Superior Court



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