Fraudster Runs Into Bad Standard of Review

In re Alpha Media Resort Inv. Cases, No. A150541 (D1d3 Sept. 16, 2019)

This case arises out of a $170 million fraud scheme for which the Defendant was criminally convicted. Defendant participated sporadically in the case, and failed to show at his deposition or at trial. In coordinated litigation, Plaintiffs here won about $10.5 in total judgments. Defendant argues (1) that his case should have been dismissed under Code of Civil Procedure § 583.310’s five-year rule, and (2) somewhat orthogonally, that his case should have been stayed pending the criminal case against him.

There’s no doubt that the case took a long time to get to trial. But the case was complicated and the Defendant recalcitrant. The trial court found that, for a significant portion of time, it was “impracticable” to bring the case to trial under § 583.340(c), and thus the 5-year limit had not lapsed. Given that such a determination is within the sound discretion of the superior court, the Court of Appeal won’t disturb it, so long as it has some basis in fact and reason. It did so here.

So far as staying the case due to the criminal charges, that too is a matter on which the trial court has a lot of discretion. The trial court didn’t abuse its discretion in denying a stay here. Among other things, Defendant had plead guilty before trial in a deal that the government wouldn’t bring additional charges. So Defendant’s Fifth Amendment concerns about giving testimony in the civil trial were speculative at the least.

Affirmed.

Tolling Accrues to the Diligent

Martinez v. Landry’s Restaurants, No. B278513 (D2d7 Aug. 28, 2018)

This wage and hour class action, filed in 2007, got dismissed under the five-year rule in Code of Civil Procedure § 583.310. Plaintiffs don’t argue that five years haven’t passed. But there’s potential tolling for four different periods. 

Can’t Wait for the Perfect When the 5-Year Rule Looms

Tanguilig v. Nieman Marcus Grp., No. A141383 (D1d4 Apr. 16, 2018)

Under Code of Civil Procedure § 583.310, a case must be dismissed with prejudice if it has not been brought to trial within five years of filing. The five years is subject to various kinds of tolling. Plaintiff in this case—a wage-and-hour class action combined with some PAGA claims that was filed in 2007—needs three different kinds of tolling to get within the five year window. 

Her key tolling argument here comes under § 583.340(c), which stops the clock during periods where it is “impossible, impracticable, or futile” to bring the case to trial. That section permits tolling due to circumstances, beyond the plaintiff’s control, that prevent her from expeditiously bringing her case to trial. 

Unlike most of Defendant’s employees, Plaintiff quit instead of signing an employment contract containing an arbitration clause with a class action waiver. That caused some typicality issues for her class action. So several years into the case, Plaintiff added an additional class rep who had signed the agreement. But that solution led to bigger problems. It resulted in the trial court compelling a significant part the new rep's case to mandatory non-class arbitration. Notably, almost a year later, the trial court reconsidered its stay and ultimately lifted it. (The reconsideration was ultimately affirmed on appeal almost three years ago.)

Now, Plaintiff seeks tolling under § 583.340(c) for the period in which the stay was in effect. But none of the stuff with the new rep prevented Plaintiff from proceeding to trial on her own (smaller) part of the class, which wasn’t stayed. The fact that Plaintiff preferred to go to trial with a bigger, better class didn’t mean that going to trial was “impossible, impracticable, or futile” under § 538.340(c).

Affirmed.